Annual Reports and
Financial Statements
2017
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RELX Group is a global provider of information and
analytics for professional and business customers
across industries.
We help scientists make new discoveries, lawyers
win cases, doctors save lives and insurance
companies offer customers lower prices. We save
taxpayers and consumers money by preventing fraud
and help executives forge commercial relationships
with their clients.
In short, we enable our customers to make better
decisions, get better results and be more productive.
RELX PLC is a London listed holding company which owns 52.9% of RELX Group.
RELX NV is an Amsterdam listed holding company which owns 47.1% of RELX Group.
Forward-looking statements
The Reports and Financial Statements 2017 contains forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E
of the US Securities Exchange Act of 1934, as amended. These statements are subject to a number of risks and uncertainties that could cause actual results or outcomes to
differ materially from those currently being anticipated. The terms “outlook”, “estimate”, “project”, “plan”, “intend”, “expect”, “should be”, “will be”, “believe”, “trends” and
similar expressions identify forward-looking statements. Factors which may cause future outcomes to differ from those foreseen in forward-looking statements include,
but are not limited to: current and future economic, political and market forces; changes in law and legal interpretations affecting the RELX Group intellectual property rights;
regulatory and other changes regarding the collection, transfer or use of third party content and data; demand for the RELX Group products and services; competitive factors
in the industries in which the RELX Group operates; compromises of our data security systems and interruptions in our information technology systems; legislative, fiscal,
tax and regulatory developments and political risks; exchange rate fluctuations; and other risks referenced from time to time in the filings of RELX PLC and RELX N.V. with
the US Securities and Exchange Commission.
Overview RELX Group
1
Contents
Get more information online
A pdf of the full Annual Report and further
information about the Group and our
businesses can be found online at our
website: www.relx.com
2017 Financial highlights
Overview*
2
3 Chairman’s statement
4 Chief Executive Officer’s report
Business review*
8 RELX Group business overview
14 Scientific, Technical & Medical
20 Risk & Business Analytics
28 Legal
34 Exhibitions
41 Corporate Responsibility
Financial review*
54 Chief Financial Officer’s report
60 Principal risks
Governance
66 Board Directors
68 RELX Group Business Leaders
70 Chairman’s introduction to Corporate Governance
71 Corporate Governance review
81 Report of the Nominations Committee
83 Directors’ Remuneration Report
103 Report of the Audit Committees
Financial statements
and other information
106 Independent auditors’ report
117 Consolidated Financial Statements
167 RELX PLC Annual Report and Financial Statements
175 RELX NV Annual Report and Financial Statements
184 Summary financial information in euros
185 Summary financial information in US dollars
186 Reconciliation of adjusted to GAAP measures
187 Shareholder information
191 2018 financial calendar
* Comprises the Strategic Report in accordance with The (UK)
Companies Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013.
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RELX Group Annual reports and financial statements 2017
2017 Financial highlights
§ Underlying revenue up 4%
§ Underlying adjusted operating profit up 6%
§ Adjusted EPS up 12% to 81.0p (72.2p); up 5% to €0.923 (€0.880); up 7% constant currency
§ Reported EPS 82.2p (56.3p) for RELX PLC; €0.936 (€0.687) for RELX NV
§ Full-year dividend up 10% to 39.4p for RELX PLC and up 6% to €0.448 for RELX NV
§ Strong financial position and cash flow; leverage 2.2x EBITDA pensions and lease adjusted
(1.9x unadjusted)
RELX Group
REVENUE
ADJUSTED OPERATING PROFIT
£m
€m
£m
€m
Underlying growth +4%
Underlying growth +6%
6,895
7,355
8,412
8,385
2,114
2,284
2,579
2,604
2016
2017
2016
2017
2016
2017
2016
2017
Parent companies
RELX PLC
Adjusted EPS
pence
Growth +12%
72.2
81.0
Dividend
pence
Growth +10%
RELX NV
Adjusted EPS
€
Growth +5%
0.880
0.923
Dividend
€
Growth +6%
35.95
39.4
0.423
0.448
2016
2017
2016
2017
2016
2017
2016
2017
RELX Group encompasses RELX PLC, RELX NV, RELX Group plc and its subsidiaries, associates and joint ventures. The corporate structure is set out on page 71.
RELX Group uses adjusted and underlying figures as additional performance measures. Adjusted figures primarily exclude the amortisation of acquired intangible assets and
other items related to acquisitions and disposals, and the associated deferred tax movements. In 2017, we have excluded the exceptional tax credit arising as a result of the US Tax
Cuts and Jobs Act. Reconciliations between the reported and adjusted figures are set out on page 186. Underlying growth rates are calculated at constant currencies, and exclude
the results of acquisitions and disposals made in both the year and prior year and of assets held for sale. Underlying revenue growth rates also exclude the effects of exhibition
cycling. Constant currency growth rates are based on 2016 full-year average and hedge exchange rates.
Overview Chairman’s statement
3
Chairman’s statement
as last year, and, on an unadjusted basis was 1.9x, compared with
1.8x last year. Adjusted cash flow conversion was 96%, compared
with 95% in 2016, with capital expenditure at 5% of revenues.
Share buybacks
In 2017, we deployed £700m on share buybacks. In 2018, we intend
to deploy a total of £700m. By February, £100m of this year’s total
had already been completed, leaving a further £600m to be
deployed during the year.
The Boards
We continue to refresh the Boards. In September 2017, we welcomed
Suzanne Wood to the boards as a non-executive director. Suzanne is
Group Finance Director at Ashtead Group plc and brings extensive
board experience on both sides of the Atlantic. In 2018, Adrian Hennah
will become Chairman of the Audit Committees, replacing Ben van der
Veer, who will have been on the Boards for nine years in September
2018 and has been Chairman of the Audit Committees since 2010.
Parent company structure
We are proposing a set of measures that will further simplify our
corporate structure into a single parent company. We believe this
is a natural next step for RELX Group, removing complexity and
increasing transparency. The changes will be cost and profit neutral
on an ongoing basis and will not impact the economic interests of any
shareholder. RELX NV shareholders will receive one new RELX PLC
share in exchange for each RELX NV share held and will, following
the additional listing of RELX PLC shares on Euronext Amsterdam,
have the option of trading new RELX PLC shares on Euronext
Amsterdam, priced in euros, and receive dividend payments in
euros. RELX PLC will continue to have a premium listing on the
London Stock Exchange and we will be applying for an additional
listing of RELX PLC on Euronext Amsterdam. RELX NV ADRs will be
converted one-for-one to RELX PLC ADRs which will continue to be
listed on the New York Stock Exchange. There will be no changes to
the locations, activities or staffing levels of RELX Group or its four
business areas. The simplification is subject to the approval of both
RELX PLC and RELX NV shareholders. We expect a circular to be
sent to shareholders in Q2 2018, with implementation in Q3 2018.
Corporate responsibility
We prioritise excellence in corporate governance across RELX
Group. In 2017, we advanced a more structured approach to
compliance training for employees in higher-risk roles and
locations by creating a resource library with presentations on
competition law, anti-bribery, anti-harassment, trade sanctions
and fostering a culture of compliance. Over 2,400 colleagues
received advanced in-person compliance training.
Diversity and inclusion remain critical to our business to ensure we
reflect the diversity of our customers and communities. Over 44%
of non-executive directors on the Board are women. In the year, we
expanded our women in technology mentor pilot to include mentees
in the US and China as well as the UK, and developed a new mentor
programme for high potential women.
We focus on our unique contributions to society, such as fostering
communities, applying our expertise, and using our convening
power, to address key challenges across our market sectors.
We discuss our efforts to avoid human trafficking and slavery in
our direct employment and our supply chain in our Modern Slavery
Act Statement, approved by the Board, and available on the RELX
Group homepage.
Anthony Habgood
Chairman
Sir Anthony Habgood
Chairman
We achieved good underlying
revenue growth in 2017, and
continued to generate underlying
adjusted operating profit growth
ahead of revenue growth. We are
proposing a set of measures that
will further simplify our corporate
structure into a single parent
company.
RELX Group continued to execute well on its strategic priorities
aimed at achieving more predictable revenues, a higher growth
profile and improving returns. As a result, growth of underlying
revenues was again +4%. Underlying adjusted operating profits
grew +6%, as we continued to grow revenues ahead of costs.
Adjusted earnings per share in constant currencies grew +7%.
Adjusted EPS expressed in sterling was 81.0p (+12%) or in euros
€0.923 (+5%). Reported earnings per share expressed in sterling
was 82.2p (56.3p) and expressed in euros was €0.936 (€0.687).
The difference in growth rates between the sterling and euro EPS
reflects the movement in exchange rates.
Dividends
We are proposing a full year dividend increase of 10% to 39.4p
for RELX PLC and 6% to €0.448 for RELX NV. The difference in
growth rates between the two dividends reflects movement
in the sterling/euro exchange rate since the payments a year
earlier. The long-term dividend policy is unchanged.
Balance sheet
With the majority of our debts dollar denominated, net debt was
£4.7bn/€5.3bn on 31 December 2017, compared with £4.7bn/€5.5bn
last year, with the difference between the sterling and euro increases
reflecting movements in exchange rates. Net debt/EBITDA on a
pensions and lease adjusted basis for 2017 was 2.2x, the same level
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RELX Group Annual reports and financial statements 2017
Chief Executive Officer’s report
Strategic direction
Our number one strategic priority is the organic development
of increasingly sophisticated information-based analytics and
decision tools that deliver enhanced value to professional and
business customers across the industries that we serve.
Our goal is to help our customers make better decisions, get better
results and be more productive. We do this by leveraging a deep
understanding of our customers to create innovative solutions
which combine content and data with analytics and technology
in global platforms. These solutions often account for about 1%
of our customers’ total cost base but can have a significant and
positive impact on the economics of the remaining 99%.
We aim to build leading positions in long-term global growth
markets and leverage our skills, assets and resources across
RELX Group, both to build solutions for our customers and to
pursue cost efficiencies.
We are systematically migrating all of our information solutions
across RELX Group towards higher value-add decision tools,
adding broader datasets, embedding more sophisticated analytics
and leveraging more powerful technology, primarily through
organic development.
We are transforming our core business, building out new products
and expanding into higher growth adjacencies and geographies.
We are supplementing this organic development with selective
acquisitions of targeted data sets and analytics, and assets in
high-growth markets that support our organic growth strategies,
and are natural additions to our existing businesses.
By focusing on evolving the fundamentals of our business we
believe that, over time, we are improving our business profile
and the quality of our earnings. This is leading to more predictable
revenues through a better asset mix and geographic balance;
a higher growth profile by expanding in higher growth segments,
exiting from structurally challenged businesses and gradually
reducing the drag from print format declines; and improved returns
by focusing on organic development with strong cash generation.
Erik Engstrom
Chief Executive Officer
Our number one priority is
the organic development of
increasingly sophisticated
information-based analytics
and decision tools that deliver
enhanced value to our customers.
UNDERLYING REVENUE GROWTH
UNDERLYING ADJUSTED OPERATING PROFIT GROWTH
+3%
+3%
+3%
+4%
+4%
+5%
+5%
+5%
+6%
+6%
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
Overview Chief Executive Officer’s report
5
2017 progress
We achieved good underlying revenue growth in 2017, and
continued to generate underlying adjusted operating profit
growth ahead of revenue growth. The underlying growth rate
reflects good growth in electronic and face-to-face revenues
(89% of the total), and the further development of our analytics
and decision tools.
With a strong balance sheet and an inherently cash-generative
business, the strategic priority order for using our cash is
unchanged. First, to invest in the organic development of our
businesses to drive underlying revenue growth; second to
support our organic growth strategy with targeted acquisitions;
third to grow dividends predictably, broadly in line with EPS
growth; fourth to maintain our leverage in a comfortable range;
and finally use any remaining cash to buy back shares. As part
of this we bought back shares for £700m in 2017, and announced
£700m in buy backs for 2018.
We continued to focus our acquisitions on select, targeted data
sets and analytics, and assets in high growth markets that
support our organic growth strategies. We completed eight
acquisitions of small content, data analytics and exhibition
assets for a total consideration of £123m, and disposed of 17
assets for a total of £87m. Since the year end, we have entered
into an agreement to acquire ThreatMetrix, a leader in the global
risk-based authentication sector, for £580m.
Financial performance
Our positive financial performance continued throughout 2017,
with underlying revenue and operating profit growth across
all four business areas. Underlying revenue growth was 4%.
Underlying operating profit growth was 6%, and adjusted
earnings per share grew 7% at constant currencies.
Key business trends in our Scientific, Technical & Medical
business remained positive, with underlying profit growth
slightly exceeding underlying revenue growth.
Underlying revenue growth remained strong across all key
segments at Risk & Business Analytics. Underlying profit
growth broadly matched underlying revenue growth.
Underlying revenue growth in Legal was in line with the prior
year with continued efficiency gains driving strong underlying
operating profit growth.
Exhibitions achieved strong underlying revenue growth, slightly
ahead of the prior year, with underlying operating profit growth
reflecting cycling-out effects.
ADJUSTED EARNINGS PER SHARE GROWTH
Constant currency
RETURN ON INVESTED CAPITAL
+10%
+7%
+8%
+8%
+7%
12.1%
12.8%
12.7%
13.0%
13.1%
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
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RELX Group Annual reports and financial statements 2017
Corporate responsibility
In 2017, we undertook a corporate responsibility stakeholder
survey to understand the issues employees, customers,
investors, suppliers, peers and others feel are important to RELX
Group. They identified data privacy and security and having the
right people as having the biggest potential impact on RELX Group,
and RELX Group’s unique contributions – universal, sustainable
access to information, advance of science and health, protection
of society, promotion of the rule of law and access to justice and
fostering communities – as our biggest impact on society.
We advanced corresponding objectives in the year, including
expanding fraud prevention and progressing cyber security
awareness. We continued to tighten technology controls, and
provided training, including through employee simulations,
to reduce susceptibility to phishing attacks.
Outlook
Key business trends in the early part of 2018 are consistent with
2017, and we are confident that, by continuing to execute on our
strategy, we will deliver another year of underlying growth in
revenue and in adjusted operating profit, together with growth
in adjusted earnings per share on a constant currency basis.
Erik Engstrom
Chief Executive Officer
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
REVENUE BY TYPE
£7,355m
11%
15%
Electronic
Face-to-face
Print/Other
74%
£7,355m
22%
£7,355m
1%
North America
Europe
Rest of world
47%
23%
55%
Subscriptions
Transactional
Advertising
52%
Revenue by format
Electronic
Face-to-face
Print
27%
25%
33%
37%
22%
21%
19%
18%
15%
13%
15%
15%
11%
15%
60%
58%
56%
64%
64%
52%
51%
15%
15%
15%
16%
14%
14%
17%
15%
48%
50%
13%
12%
12%
12%
12%
30%
32%
28%
35%
37%
14%
14%
22%
22%
61%
59%
63%
64%
66%
66%
72%
74%
70%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Business review
7
Business
review
In this section
8
RELX Group business overview
14 Scientific, Technical & Medical
20 Risk & Business Analytics
28 Legal
34 Exhibitions
41 Corporate Responsibility
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RELX Group business overview
RELX Group is a global provider
of information and analytics
for professional and business
customers across industries.
The Group serves customers in more than 180 countries
and has offices in about 40 countries. It employs about
30,000 people of whom almost half are in North America.
RELX Group financial summary
REPORTED FIGURES
For the year ended 31 December
Revenue
Operating profit
Profit before tax
Net profit attributable to RELX PLC
and RELX NV shareholders
Net margin
Net borrowings
ADJUSTED FIGURES
For the year ended 31 December
Operating profit
Operating margin
Profit before tax
Net profit attributable to RELX PLC
and RELX NV shareholders
Net margin
Cash flow
Cash flow conversion
Return on invested capital
RELX PLC and RELX NV
Adjusted earnings per share
Reported earnings per share
Ordinary dividend per share
2017
£m
7,355
1,905
1,734
1,659
22.6%
4,732
2017
£m
2,284
31.1%
2,118
1,635
22.2%
2,192
96%
13.1%
£
2016
£m
6,895
1,708
1,473
1,161
16.8%
4,700
£
2016
£m
2,114
30.7%
1,934
1,488
21.6%
2,016
95%
13.0%
Change
+7%
+12%
+18%
Change
+8%
+10%
+10%
+9%
2017
€m
8,385
2,172
1,977
1,891
22.6%
5,300
2017
€m
2,604
31.1%
2,415
1,864
22.2%
2,500
96%
13.1%
€
2016
€m
8,412
2,084
1,797
1,416
16.8%
5,499
€
2016
€m
2,579
30.7%
2,359
1,815
21.6%
2,460
95%
13.0%
Change at
constant
currencies
Change
underlying
+2%
+4%
Change
0%
+4%
+10%
Change
underlying
+6%
Change at
constant
currencies
+3%
+4%
+5%
+3%
Change
+1%
+2%
+3%
+2%
RELX PLC
RELX NV
2017
81.0p
82.2p
39.4p
2016
Change
2017
2016
Change
72.2p
56.3p
35.95p
+12%
+46%
+10%
€0.923
€0.936
€0.448
€0.880
€0.687
€0.423
+5%
+36%
+6%
Change at
constant
currencies
+7%
RELX PLC and RELX NV are separate, publicly held entities. RELX PLC’s ordinary shares are listed in London and New York, and RELX NV’s ordinary shares are listed in
Amsterdam and New York. In New York the listings are in the form of American Depositary Shares (ADSs), evidenced by American Depositary Receipts (ADRs). RELX PLC and
RELX NV jointly own RELX Group plc.One RELX PLC ordinary share confers an equivalent economic interest to one RELX NV ordinary share. RELX PLC, RELX NV, RELX Group
plc and its subsidiaries, joint ventures and associates are together known as “the Group”.
RELX Group Annual reports and financial statements 2017 Business review RELX Group business overview
9
Market segments*
Scientific, Technical & Medical is a global information analytics business that helps institutions
and professionals advance healthcare, open science, and improve performance for the benefit
of humanity.
Segment position
Global #1
Risk & Business Analytics provides customers with solutions and decision tools that combine
public and industry specific content with advanced technology and analytics to assist them in
evaluating and predicting risk and enhancing operational efficiency.
Key verticals #1
Legal is a leading global provider of legal, regulatory and business information and analytics that
helps customers increase productivity, improve decision-making and outcomes and advance the
rule of law around the world.
US #2
Outside US #1 or 2
Exhibitions is the world’s leading events business, enhancing the power of face-to-face through data
and digital tools at over 500 events, in 30 countries, attracting more than 7m participants.
Global #1
*For additional information regarding revenue from our business activities and geographical markets, see market segments section starting on page 13.
Financial summary by market segment
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
Unallocated items
Revenue
Adjusted operating profit
2017
£m
2,478
2,076
1,692
1,109
7,355
Change
underlying*
+2%
+8%
+2%
+6%
+4%
2017
£m
913
759
332
285
(5)
2,284
Change
underlying*
+3%
+8%
+11%
+2%
+6%
* RELX Group uses adjusted and underlying figures as additional performance measures. These measures are used by management, alongside the comparable GAAP measures,
in evaluating the business performance. Adjusted figures primarily exclude the amortisation of acquired intangible assets and other items related to acquisitions and disposals,
and the associated deferred tax movements. In 2017, we have excluded the exceptional tax credit arising as a result of the US Tax Cuts and Jobs Act. Reconciliations between the
reported and adjusted figures are set out on page 186. Underlying growth rates are calculated at constant currencies, and exclude the results of all acquisitions and disposals
made in both the year and prior year and of assets held for sale. Underlying revenue growth rates also exclude exhibition cycling. Constant currency growth rates are based on
2016 full year average and hedge exchange rates.
REVENUE
£7,355m
15%
34%
23%
Scientific,
Technical
& Medical
Risk &
Business
Analytics
Legal
Exhibitions
ADJUSTED OPERATING PROFIT
£2,284m
12%
15%
40%
28%
33%
Scientific,
Technical
& Medical
Risk &
Business
Analytics
Legal
Exhibitions
OverviewBusiness reviewFinancial reviewGovernanceFinancial statements and other information 10
RELX Group Annual reports and financial statements 2017
Harnessing big data
across RELX Group:
HPCC Systems
HPCC Systems (High Performance Computing Cluster) is RELX Group’s
open source big data technology. It is used to analyse structured and
unstructured data, giving our customers the information and insight they
need. Each of our market segments benefits from this technology, allowing
our customers around the world to make better decisions, get better
results and be more productive.
State of Florida fights
public benefits fraud
with LexisNexis Risk
Solutions
Florida’s Department of Children and Families provides a
range of programmes, including food assistance to low-income
families. With nearly 93% of all Florida public assistance benefit
applications received electronically, there is a risk for abuse
by identity fraudsters. Additionally, the state has the largest
percentage of elderly residents in the US, who are attractive
targets for fraud schemes. The population is also highly
transient and many do not have conventional bank accounts,
rendering most identity management solutions useless.
To combat this threat, in 2013 the state of Florida selected
LexisNexis Risk Solutions to support its Customer Authentication
Program to verify food assistance applicants’ identities. When
a person goes online to Florida’s integrated eligibility system
to apply for benefits, the state is able to quickly authenticate the
applicant’s identity via Identity Management solutions powered
by HPCC Systems. The applicant answers a series of questions
that only the owner of the identity would be able to answer.
By the end of 2013, just five months after state-wide
implementation of the Customer Authentication Program,
the state estimated it had saved nearly $15m by preventing
fraud and improving efficiencies, and received the Governor’s
Savings Award. Since then, the total cost avoidance associated
with the programme is over $840m in taxpayer benefits not
issued due to suspected fraud. That amounts to a 194 to 1 return
on investment.
These Identity Management solutions
help us to achieve our goal, which is to
safeguard the integrity of public assistance
benefits to ensure benefits only go to
Floridians who truly are in need.
Andrew McClenahan
Director, Office of Public Benefits Integrity
Florida Department of Children and Families
$840m+
more than $840m saved
by the state of Florida since
2013 using LexisNexis Risk
Solutions technology
Business review RELX Group business overview
11
Cook County, Illinois
and LexisNexis Risk
Solutions
Residential property tax fraud, also called homestead exemption
fraud, occurs in US counties when taxpayers wrongly receive
residential property tax breaks on homes they don’t live in as
their primary residence or receive tax exemptions for which they
otherwise don’t qualify, such as those for senior citizens.
This type of fraud costs US counties millions each year, which has
a significant impact on funding for public services, including schools,
public safety and other local needs. In the state of Illinois, the Cook
County Assessor’s Office needed an investigative tool to help detect
these fraudulent tax filings, so it implemented the LexisNexis
Homestead Exemption Fraud Detection Solution. Powered by
HPCC Systems, the solution examines the homestead exemption
filings of the county’s more than 1.4m residential properties to
ensure compliance with State of Illinois tax laws. Over the last
four years LexisNexis Risk Solutions has helped the county bill
more than $47 million in lost revenue.
With recovered revenue returned directly
to school districts and other community
taxing bodies, the program has already
had a huge impact. And, this is not a
one-time recovery of revenue; the savings
continue because erroneous exemptions
remain eliminated from future years.
The solution is helping us recover millions
of dollars for taxpayers at a time when
Cook County schools and municipalities
struggle with budget issues. We respect
honest taxpayers while continuing our
commitment to aggressively detect and
pursue tax cheats.
Joseph Berrios
Cook County Assessor
$47m+
more than $47m billed by
Cook County using LexisNexis
Risk Solutions technology
12
RELX Group Annual reports and financial statements 2017
Business review
13
Market
segments
In this section
14 Scientific, Technical & Medical
20 Risk & Business Analytics
28 Legal
34 Exhibitions
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Scientific, Technical & Medical
We help researchers make new discoveries, collaborate with
their colleagues and give them the knowledge they need to
find funding. We help governments and universities evaluate
and improve their research strategies. We help doctors save
lives, providing insight for physicians to find the right clinical
answers and we support nurses and other healthcare
professionals throughout their careers. Our goal is to expand
the boundaries of knowledge for the benefit of humanity.
§§ We enhance the quality of research output by organising
the review, editing and dissemination of 17% of the world’s
scientific articles
§§ ScienceDirect, the world’s largest database of
peer-reviewed primary scientific and medical research,
has 14m monthly unique visitors
§§ Scopus is the leading abstract and citation database
of research literature, with over 70m publications and
1.4bn citation records from 5,000 publishers
§§ SciVal offers insights into the research performance
of over 9,000 research institutions
§§ ClinicalKey, the flagship clinical reference platform,
is accessed by more than 4,400 institutions
§§ Elsevier journals have at some point featured articles
by 173 of 174 science and economics Nobel prize winners
since 2000
Business overview
Scientific, Technical & Medical is a global information analytics
business that helps institutions and professionals advance
healthcare, open science, and improve performance for the
benefit of humanity.
Elsevier is headquartered in Amsterdam, with further principal
operations in Boston, New York, Philadelphia, St. Louis and
Berkeley in North America, London, Oxford, Frankfurt, Munich,
Madrid and Paris in Europe, Bejing, Chennai, Delhi, Singapore and
Tokyo in Asia Pacific and Rio de Janeiro in South America. It has
7,500 employees and serves customers in over 180 countries.
Revenues for the year ended 31 December 2017 were £2,478m,
compared with £2,320m in 2016 and £2,070m in 2015. In 2017,
42% of revenue by geographical market was derived from North
America, 25% from Europe and the remaining 33% from the
rest of the world. Subscription sales generated 72% of revenue,
transactional sales 26% and advertising 2%.
Elsevier serves the needs of scientific, technical and medical
markets by organising the review, editing and disseminating of
primary research, reference and professional education content,
as well as by providing a range of database and decision tools.
Elsevier’s customers are scientists, academic institutions,
research leaders and administrators, medical researchers,
doctors, nurses, allied health professionals and students, as well
as hospitals, research institutions, health insurers, managed
healthcare organisations, research-intensive corporations and
governments. All these customers rely on Elsevier to provide
high-quality content and critical information for making scientific
and medical decisions and create innovative tools to help focus
research strategies, increase research effectiveness, improve
medical outcomes, and enhance the efficiency of healthcare and
healthcare education.
In the primary research market during 2017, 1.6m research
papers were submitted to Elsevier. More than 20,000 editors
managed the peer review and selection of these papers, resulting
in the publication of over 430,000 articles in about 2,500 journals,
many of which are the foremost publications in their field and a
primary point of reference for new research. This content was
accessed by about 14m unique visitors on average per month, with
over 900m full-text article downloads last year. In 2017, Elsevier
launched 26 new subscription and open access journals, including
Materials Today Physics, Joule from Cell Press and The Lancet
Planetary Health.
ScienceDirect, the world’s largest database of peer-reviewed
primary scientific and medical research, hosts over 15m pieces
of content and 38,000 e-books. Flagship journals include Cell
and The Lancet family of titles.
Elsevier is also a global leader in scientific, technical and
medical reference markets, providing authoritative and current
professional reference content. Flagship titles include works
such as Gray’s Anatomy, Nelson’s Pediatrics and Netter’s Atlas
of Human Anatomy.
RELX Group Annual reports and financial statements 2017 Business review Scientific, Technical & Medical
15
For academic and corporate researchers, significant products
include Scopus, Reaxys and Knovel. Scopus, the leading abstract
and citation database of peer-reviewed literature with over 70m
publications from more than 22,500 active journals and 5,000
international publishers, allows researchers to track, analyse
and visualise the world’s research output. Reaxys enables the
shortest path to chemistry research answers, supporting the
early stages of drug development in the pharmaceutical industry,
exploratory chemistry research in academia, and product
development in industries such as chemicals and oil & gas.
Knovel is a decision support tool for engineers that helps them
to select the right materials, a mission-critical use case in
product development across chemicals, oil & gas and other
engineering-focused industries.
Elsevier serves academic and government research administrators
through its Research Intelligence suite of products. Leveraging
bibliometric data from Scopus and other data types such as patent
citations and usage data, SciVal is a decision tool that helps
institutions to establish, execute and evaluate research strategies.
Pure is an enterprise research management solution that
aggregates an organisation’s research information from
numerous internal and external sources into a single platform
and ensures the data that drives strategic decisions is trusted,
comprehensive and accessible in one place. Our Analytical
Services team provides accurate, unbiased analysis on research
performance by combining high-quality data sources with
technical and research metrics expertise. Expert LookUp is an
online tool that helps funding bodies find the best peer reviewers
for evaluating grant applications.
Elsevier’s flagship clinical reference platform, ClinicalKey,
provides physicians, nurses, and pharmacists with access to
leading Elsevier and third-party reference and evidence-based
medical content in a single, fully integrated site. ClinicalKey
is growing well, and is currently accessed by more than
4,400 institutions.
In medical education, Elsevier serves students of medicine,
nursing and allied health professions in a number of formats
including electronic books and electronic solutions. For example,
Sherpath, an adaptive teaching and learning solution for nursing
and health education, provided highly focused, personalised
and adaptive learning paths for over 33,000 users at over 400
institutions in 2017.
For healthcare professionals, Elsevier develops products to
deliver patient-specific solutions at the point of care to improve
patient outcomes. Its clinical solutions include Interactive Patient
Education, which provides patient education and discharge
information, and Care Planning, which provides a data-driven
framework to support nurses in undertaking procedures.
Arezzo, an active clinical decision support engine integrated
with clinical care systems, matches evidence-based guidelines
with patient and disease information and dynamically evaluates
best-practice treatment options.
The leading abstract and citation database of
peer-reviewed literature features tools to track,
analyse and visualise scholarly research
Ready-to-use tools to analyse the world of
research, and establish, execute and evaluate
the best strategies for research organisations
The world’s largest database of scientific
and medical research articles
Premier life sciences journal with the
highest impact factor in biochemistry
and molecular biology
One of the world’s leading medical journals
since 1823
This chemical compound and reaction
synthesis database enables the shortest path
to chemistry research answers, supporting
drug discovery, chemical R&D and education
Combines leading reference and evidence-
based medical content into its fully integrated
clinical insight engine specialised for doctors,
nurses, or pharmacists
An innovative research management and
social collaboration platform
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RELX Group Annual reports and financial statements 2017
In every market, Elsevier is applying advanced machine learning
(ML) and natural language processing (NLP) techniques to help
researchers, engineers and clinicians perform their work better.
For example, in research, NLP and ML techniques classify scientific
content and organise it thematically, enabling the users to get
faster access to relevant results and related scientific topics.
In parallel, advanced information extraction and NLP techniques
are applied to extract the most important information for scientific
concepts in concise summaries. Elsevier also applies advanced
ML techniques that detect trending topics per domain, helping
researchers decide where to focus their research. Coupled with
the automated profiling and extraction of funding body information
from scientific articles, this process supports the whole
researcher journey; from planning, to execution and funding.
In health, Elsevier uses machine learning to enable clinicians
to search for both images and text, improving the success rates
in the retrieval of the right content with sufficient associated
sources. This helps health professionals perform their work
better, get the latest high quality information on best practices
and state-of-the-art care, and save more human lives.
Market opportunities
Scientific, technical and medical information markets have good
long-term growth characteristics. The importance of research
and development to economic performance and competitive
positioning is well understood by governments, academic
institutions and corporations. This is reflected in the long-term
growth in research and development spending and in the number
of researchers worldwide. Growth in health markets is driven
by ageing populations in developed markets, rising prosperity
in developing markets and the increasing focus on improving
medical outcomes and efficiency. Given that a significant
proportion of scientific research and healthcare is funded
directly or indirectly by governments, spending is influenced
by governmental budgetary considerations. The commitment
to research and health provision does, however, remain high,
even in more difficult budgetary environments.
Strategic priorities
Elsevier’s strategic goal is to lead the way in providing information
solutions that advance science, technology and health. To achieve
this, Elsevier creates solutions that reflect deep insight into the
way its users work and the outcomes they are seeking to achieve;
strives for excellence in content, service and execution; constantly
adapts and revitalises its products, business models and
technology; and leverages its institutional skills, assets and
resources to promote innovation and efficiency.
Elsevier’s strategic priorities are to: continue to increase
content volume and quality; expand content coverage, building
out integrated solutions and decision tools combining Elsevier,
third-party and customer data; increase content utility, using
“Smart Content” to enable new e-solutions; combine content
with analytics and technology, focused on measurably improving
productivity and outcomes for customers; and continue to drive
operational efficiency and effectiveness.
In the primary research market, Elsevier aims to grow volume
through new journal launches, expansion of author-pays journals
and growth from emerging markets; enhance quality by building
on our premium brands; and add value to core platforms by
implementing new capabilities such as advanced recommendations
on ScienceDirect and social collaboration through Mendeley.
In clinical reference markets, priorities are to expand content
coverage and ensure consistent and seamless linking of content
assets across products.
Business model, distribution channels and competition
Science and medical research is principally disseminated on
a paid subscription basis to the research facilities of academic
institutions, governments and corporations and, in the case
of medical and healthcare journals, to individual practitioners
and medical society members. For the past decade content
has been provided free or at very low cost in over 100 countries
and territories in the developing world through Research4Life,
a United Nations partnership initiative. For a number of journals,
advertising and promotional income represents a small
proportion of revenues, predominantly from pharmaceutical
companies in healthcare titles.
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
REVENUE BY TYPE
£2,478m
Print 19%
£2,478m
Rest of
world
33%
Advertising
2%
£2,478m
Transactional
26%
North
America
42%
Electronic
81%
Europe 25%
Subscription
72%
Business review Scientific, Technical & Medical
17
Over the past 15 years, alternative models for the dissemination of
research have emerged. While it is expected that paid subscription
will remain the primary distribution model, Elsevier has long
invested in alternative business models to address the needs of
customers and researchers. Open access journals are one such
example. In 2017, we published over 27,000 open access articles,
a double-digit growth on the previous year, making us the second
largest open access publisher in the world. Over 1,890 of
Elsevier’s journals now offer the option of funding publication
and distribution via a sponsored article fee.
Next to subscription and open access journals, Elsevier has also
invested in other models to address the needs of the research
community. SSRN for example is an open-access online preprint
community where researchers post early-stage research, prior
to publication in academic journals. Mendeley data enables
researchers to make their research data publicly available by
providing an open research data repository. Bepress, which
joined Elsevier in 2017, helps academic libraries showcase and
share their institutions’ research via institutional repositories
for greatest impact.
Electronic products, such as ScienceDirect, Scopus and ClinicalKey,
are generally sold direct to customers through a dedicated sales
force that has offices around the world. Subscription agents
sometimes facilitate the sales and administrative process for
remaining print sales. Reference and educational content is sold
directly to institutions and individuals and accessed on Elsevier
platforms. Sometimes it is still sold in printed book form through
retailers, wholesalers or directly to end users.
Competition within science and medical reference content
is generally on a title-by-title and product-by-product basis.
Competition in research and reference products is typically
with learned societies and professional information providers,
such as Springer Nature, Clarivate Analytics and Wolters Kluwer.
Decision tools face similar competition, as well as from software
companies and internal solutions developed by customers.
2017 financial performance
Revenue
Adjusted operating profit
2017
£m
2,478
913
2016
£m
2,320
853
Underlying
growth
+2%
+3%
Acquisitions/
disposals
0%
-1%
Currency
effects
+5%
+5%
Total
growth
+7%
+7%
Key business trends remained positive in 2017, with underlying
profit growth slightly exceeding underlying revenue growth.
Underlying revenue growth was +2%. The difference between the
reported and underlying growth rates primarily reflects the impact
of exchange rate movements and portfolio changes, including the
acquisitions of Plum Analytics and bepress, and the disposal of
certain international pharma promotion assets.
Underlying adjusted operating profit growth of +3% was slightly
ahead of revenue growth, with an underlying margin improvement
offset by portfolio effects.
Electronic revenues saw continued good growth, partially offset
by further print declines. In primary research we continued to
enhance customer value by providing broader content sets across
our research offering, increasing the sophistication of our
analytics, and evolving our technology platforms. Databases &
tools continued to drive growth across market segments through
the launch of enhanced functionality and content development.
Print books, which now represent around 10% of divisional
revenues, saw continued sales declines with return rates at
historical levels, following higher than average return rates in the
prior year. The decline in print pharma promotion revenues, which
represent less than 5% of the divisional total, returned to historical
rates of decline after a stronger prior year.
2018 outlook
Our customer environment remains largely unchanged. Overall
we expect another year of modest underlying revenue growth, with
underlying operating profit growth continuing to exceed underlying
revenue growth.
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
Underlying growth +2%
2,320
2,478
Underlying growth +3%
853
913
2016
2017
2016
2017
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RELX Group Annual reports and financial statements 2017
SciVal is a very powerful tool for us as it allows
individual researchers and academic leaders to
evaluate their place in the world and put their
performance story in their own hands. As we
continue to grow as a university, the ability to
track our progress using SciVal presents exciting
opportunities for our institution.
Keith Webster
Dean of University Libraries,
Carnegie Mellon University
9,000+
author profiles from
Carnegie Mellon
University are listed
in SciVal
Business review Scientific, Technical & Medical
19
SciVal:
helping Carnegie Mellon
University evaluate its
place in the world
Founded in 1900, Carnegie Mellon University (CMU) is a global research
university known for its world-class, interdisciplinary programmes in
arts, business, computing, engineering, humanities, policy and science.
CMU is based in Pittsburgh, Pennsylvania and has over 13,900 students
representing 109 countries with 1,391 faculty from 42 countries.
Given the focus of interdisciplinary research at CMU, it is
particularly critical for the university to provide individual faculty
members with an understanding of the impact of their research
and how it compares with competitor institutions. SciVal has
proved to be a powerful tool to demonstrate not just output but
also interdisciplinary impact. By using SciVal’s sophisticated
analytics, CMU is able to showcase and curate university research
output as well as help researchers to identify the best places
to publish their research, manage their information products,
find potential funding sources and collaborate with external
academics. The university’s strategic direction will focus on
the evolving scholarly record and a recognition that a scholar’s
contribution to their field is not solely in the form of traditional
research output. CMU hopes to work with SciVal to understand
this transition and how researchers might best showcase their
work in the global scholarly record.
Keith Webster of Carnegie Mellon University
About SciVal
SciVal offers quick, easy access to the
research performance of over 9,000
research institutions. This easy-to-use
research and analysis solution has
unparalleled power and flexibility. It
enables customers to visualise research
performance, benchmark relative to
peers, develop collaborative partnerships
and analyse research trends. Using
advanced data analytics super-computer
technology, SciVal allows users to instantly
process an enormous amount of
information to generate powerful data
visualisations in seconds. SciVal is
powered by the Scopus database which
covers records from over 22,500 active
journals of 5,000 publishers worldwide and
is the data source of choice for world class
ranking and assessment exercises. RELX
Group’s HPCC Systems big data technology
provides the SciVal analysis ‘‘engine’’.
20
RELX Group Annual reports and financial statements 2017
Risk & Business Analytics
We use the power of data and advanced analytics to help our
customers make better, timelier decisions. Our innovative
solutions enable organisations to manage risks like identity
theft, fraud, money laundering and terrorism, and prevent
financial crimes, and insurance and government benefit
scams. We help those without traditional credit histories
obtain access to funds, assist agencies to find uncollected
revenue, and research ways to improve business outcomes for
healthcare companies. We also work with law enforcement to
solve crimes. We advise farmers with their efforts in precision
agriculture and work with airlines to improve their operations
and services for passengers. We help customers in the
petrochemicals, energy and fertiliser industries to make
better trading and planning decisions. By bringing clarity
to information, we ultimately help make communities safer,
insurance rates more accurate, commerce more transparent,
business decisions easier and processes more efficient.
§ LexisNexis Risk Solutions maintains over 78bn records
§ Since 2013, the Florida Department of Children and Families
has used our identity management solutions to prevent food
stamp fraud, achieving a total cost avoidance of over $840m
in taxpayer benefits not issued due to suspected fraud
§ LexisNexis Risk Solutions performs over 100m identity
verification checks and over 100bn customer and
transaction screening requests annually, supporting
industries such as banking, fintech and e-commerce
§ LexisNexis Risk Solutions works with more than 75%
of Fortune 500 companies, eight out of 10 of the world’s
top banks and 95 out of the top 100 personal lines
insurance companies
§ Accuity has information on 22,000 banks and 95 of
the world’s largest 100 banks use its data
§ FlightGlobal analyses 2.5bn travel segments every year
worth about $385bn and tracks 100,000 commercial
flights daily, or more than 35m a year
Business overview
Risk & Business Analytics provides customers with solutions and
decision tools that combine public and industry specific content
with advanced technology and analytics to assist them in evaluating
and predicting risk and enhancing operational efficiency.
Risk & Business Analytics is headquartered in Alpharetta
(Georgia), with further principal operations in Florida, Illinois
and Ohio in North America, London and Amsterdam in Europe
and Shanghai in Asia Pacific. It has 8,100 employees and serves
customers in more than 170 countries.
Revenues for the year ended 31 December 2017 were £2,076m,
compared with £1,906m in 2016 and £1,601m in 2015. In 2017,
80% of revenue came from North America, 15% from Europe
and the remaining 5% from the rest of the world. Subscription
sales generated 35% of revenues, transactional sales 63%
and advertising 2%.
The business is organised around market-facing industry/sector
groups: Insurance Solutions, Business Services, Government
Solutions, Health Care Solutions, as well as Data Services
(including banking, energy and chemicals, aviation, agriculture
and human resources).
Insurance Solutions, the largest segment, provides comprehensive
data, analytics and decision tools for personal, commercial and
life insurance carriers in the US to improve critical aspects of their
business. Information solutions, including the most comprehensive
US personal loss history database, C.L.U.E., help insurers assess
risks and provide important inputs to pricing and underwriting
insurance policies. Additional key products include LexisNexis
Data Prefill, which provides information on customers directly into
the insurance workstream and LexisNexis Current Carrier, which
identifies insurance coverage details and any lapses in coverage.
In the US, we are focused on delivering innovative decision tools
through a single point of access within an insurer’s infrastructure.
LexisNexis Active Insights, our solution for active risk management,
connects proprietary linking algorithms with vast amounts of
data to proactively inform insurers of key events impacting their
policyholders. We are advancing our strategy to drive more
consistency and efficiency in claims through our solution suite,
Claims Compass. Our Risk Classifier solution, which uses public
and motor vehicle records and predictive modelling, is used
by more than 20% of the top 50 life insurers to better understand
risk and improve underwriting efficiency.
We continue to make progress outside the US. In the UK,
contributory solutions including No Claims Discount module,
which automates verification of claims history, and new offering
Policy Insights, a predictor of motor claims loss, are being
integrated into the LexisNexis Informed Quotes platform to
deliver data in real-time into the quoting process of an insurance
transaction. In China, the Genilex joint venture is delivering key
vehicle data to auto insurers and is looking to add more analytics
solutions. In India, our Intelligence Exchange contributory
platform and Risk Insights solution are used by life insurers to
predict, better assess and manage risk within the underwriting
and claims management processes.
Business review Risk & Business Analytics
21
Business Services provides organisations with state-of-the-art
risk management, including: financial crime compliance, fraud
and identity management, consumer and business credit risk
assessment, and collections. These include solutions for
watch-list screening, due diligence, identify verification and
authentication, credit scoring and skip tracing. Our big data
technology (HPCC Systems), vast alternative data repository
and analytic linking capabilities provide valuable information
and analytics that are used to help solve complex global issues,
like financial inclusion and financial transparency.
The investments we made in business risk over the past few years
continue to bear fruit with the launch of additional products in
2017. We brought to market the latest version of our Business
Instant ID offering and broadened data coverage in our business
risk suite. The launch of our Risk Defense Platform has proven
successful with the delivery of holistic fraud prevention solutions
for large enterprise customers. Global expansion continues to
accelerate Business Services growth with increasing adoption
of our products by leading and innovative global companies.
In January 2018, RELX Group announced it had agreed to acquire
ThreatMetrix, a leader in the global risk-based authentication
sector, headquartered in San Jose, California. ThreatMetrix’s
technology analyses connections among devices, locations,
anonymised identity information and threat intelligence, and
combines this data with behavioural analytics to identify high-risk
digital behaviour and transactions in real time.
Government Solutions provides identity intelligence to US
federal, state and local law enforcement and government
agencies to help solve criminal cases and identify fraud, waste
and abuse in government programmes. In addition to providing
identity theft solutions for tax agencies to help ensure legitimate
taxpayers receive tax refunds, the group began providing business
intelligence solutions allowing government agencies to find
additional fraud and property tax.
The Public Safety Data Exchange (PSDEX) is a contributory
database of more than 1,300 law enforcement agencies. The
PSDEX compiles data from law enforcement agencies across
the US to help them solve crimes, identify threats and anticipate
future threats. It is also linked to public records data and served
back to agencies to accelerate criminal investigations through
key solutions, such as Accurint Virtual Crime Center.
In the healthcare sector, Government Solutions gained momentum
in educating government healthcare agencies on the value of using
robust, accurate data and analytics to identify relationships and
patterns among healthcare providers, pharmacies and patients
to pinpoint illegal distribution of opioids. Government Solutions
continued to grow its contributory database footprint in the health,
human services; tax and revenue; and public safety markets.
Health Care Solutions utilises socioeconomic, consumer,
provider and medical claims data to deliver leading identity,
fraud, compliance and health risk analytics solutions across key
stages of healthcare to enable intelligent decision-making for
payers, providers, life sciences organisations and pharmacies.
In 2017, we enhanced our LexisNexis Socioeconomic Health
Score and Attributes to patients’ health risk based on their
socioeconomic profile.
Data and analytics for the global commercial
aviation and travel industry
Global provider of news, price benchmarks,
data and research to the energy, chemical
and fertiliser industries
LexisNexis Active Insights
VerifyHCP
World Compliance
An active risk management solution that
provides timely alerts of recent changes
occurring in the household to help insurers
enhance customer relationships with
better service
Claims Compass
Data analytics suite with LexisNexis Claims
Datafill, LexisNexis Police Records through
Claims Compass, LexisNexis Claims Medical
Discovery and LexisNexis Claims Analyzer
that improves the claims process from first
notice of loss, triage, investigation and
resolution through recovery
The most comprehensive collection of watch
lists in the industry, including sanctions,
enforcements, politically exposed persons
(PEPs), state-owned enterprises (SOE),
adverse media and special collections
Risk Defense Platform
An innovative fraud prevention and identity
management platform that seamlessly
delivers the broadest of solutions including the
latest in machine learning that adapts to ever-
changing fraud schemes, simplifying efforts
to detect and prevent risks associated with the
merging of digital and physical identities
The VerifyHCP solution provides a proven
approach to help payers keep their provider
directories current and improve compliance
with US state and federal regulations
Innovative solutions for payments and compliance
professionals, from comprehensive data and
software to manage risk and compliance, to
flexible tools to optimise payments pathways
Accurint® Virtual Crime Center
Policing platform used for analytics, crime
analysis and investigations linking public
records to national law enforcement data
for a complete picture across jurisdictions
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RELX Group Annual reports and financial statements 2017
Data Services include: Accuity, a provider of services and
solutions to the banking and corporate sectors focused on
payment efficiency, Know Your Customer (KYC), Anti-Money
Laundering (AML) and compliance; ICIS, an information and
data service in chemicals, energy and fertilisers; XpertHR, an
online service providing regulatory guidance, best practices and
tools for human resource professionals; Nextens, a provider of
tools and services for tax professionals; FlightGlobal, a leading
provider of data and analytics for the global commercial aviation
and travel industry; Proagrica, a provider of software, connectivity
solutions, data, analytics and media streams for the global
agriculture sector; and EG, which delivers a mix of high-quality
data, decision tools and high-value news and information to the
UK’s commercial real estate market.
In 2017, we continued to reshape our portfolio, exiting areas not
core to our strategy. A number of media titles and brands were
divested, including New Scientist, Personnel Today, Community
Care and Landleven.
Market opportunities
We operate in markets with strong long-term growth in demand
for high-quality advanced analytics based on industry information
and insight, including: insurance underwriting transactions;
insurance acquisition, retention and claims handling; healthcare,
tax and public benefits fraud; financial crime compliance; business
risk; fraud and identity solutions; due diligence requirements
surrounding customer enrolment; security and privacy
considerations; and data and advanced analytics for the banking,
energy and chemicals, human resources and aviation sectors.
In the insurance segment, growth is supported by increasing
transactional activity in the auto, property and life insurance
markets and the increasing adoption by insurance carriers
of more sophisticated data and analytics in the prospecting,
underwriting and claims evaluation processes, to assess
underwriting risk, increase competitiveness and improve
operating cost efficiency. Transactional activity is driven by
growth in insurance quoting and policy switching, as consumers
seek better policy terms.
This activity is stimulated by competition among insurance
companies, high levels of carrier advertising and rising levels
of internet quoting and policy binding. As a result, we continue
to expand our services to make it easier for the consumer to
transact with an insurer throughout the insurance process.
A number of factors support growth in banking and financial
services markets, including cross-border payments and
trade finance levels. Escalating anti-money laundering fines,
high-profile anti-bribery and corruption cases, growth through
consumer and business credit expansion, increased fraud losses
and heightened regulatory scrutiny impact growth opportunities
for us with all entities, including financial institutions, e-commerce,
retail, communications, mobile and media companies. The rise
in fintech and alternative lending also positively influences our
trajectory. In collections, demand is driven mainly by the elevated
levels of consumer debt and the prospect of recovering that debt.
Growth in government markets is driven by the increasing
demand for our contributory solutions to combat criminal activity,
fraud and tax evasion. The level and timing of demand in this
market is influenced by government funding and revenue
considerations. In healthcare, there are numerous growth drivers
for identity and fraud analytic solutions including the expansion
of compliance requirements driven by new regulations.
Growth in the global energy and chemicals markets is driven
by increasing trade and demand for more sophisticated
information solutions. Aviation information markets are being
driven by increases in air traffic and in the number of aircraft
transactions. Growth in agriculture markets is being driven
by adoption of technology and data solutions plus increasing
supply chain connectivity.
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
REVENUE BY TYPE
£2,076m
Face-to-face
2%
Print 3%
£2,076m
Europe
15%
Rest of world
5%
£2,076m
Advertising
2%
Subscription
35%
Electronic
95%
North
America
80%
Transactional
63%
Business review Risk & Business Analytics
23
Strategic priorities
Our strategic goal is to help businesses and governments achieve
better outcomes with information and decision support in their
individual markets through better understanding of the risks
and opportunities associated with individuals, other businesses,
transactions and regulations. By providing the highest quality
industry data and decision tools, we assist customers in
understanding their markets and managing risks efficiently
and cost effectively. To achieve this, we are focused on:
delivering innovative new products; expanding the range of risk
management solutions across adjacent markets; addressing
international opportunities in selected markets to meet
local needs; further growing our data services businesses;
and continuing to strengthen our content, technology and
analytical capabilities.
Business model, distribution channels and competition
Our products are for the most part sold directly, typically on
a subscription or transactional basis. Pricing is predominantly
on a transactional basis for insurance carriers and corporations,
and primarily on a subscription basis for government entities.
In the insurance sector, our competitor Verisk sells data and
analytics solutions to insurance carriers but largely addresses
different activities to ours. Principal competitors in Business
Services and government segments include Thomson Reuters
and major credit bureaus, which in many cases address different
activities in these segments as well.
Data Services competes with a number of information
providers on a service and title-by-title basis including: Platts,
Thomson Reuters and IHS as well as many niche and privately
owned competitors.
2017 financial performance
Revenue
Adjusted operating profit
2017
£m
2,076
759
2016
£m
1,906
686
Underlying
growth
Acquisitions/
disposals
+8%
+8%
-4%
-2%
Currency
effects
+5%
+5%
Total
growth
+9%
+11%
Underlying revenue growth remained strong across all key
segments in 2017. Underlying profit growth broadly matched
underlying revenue growth.
Underlying revenue growth was +8%. The difference between
the reported and underlying growth rates primarily reflects
the impact of exchange rate movements and portfolio changes
including the disposal of New Scientist and other magazines,
and the sale of our majority stake in a property title services joint
venture to our partner.
Underlying adjusted operating profit growth broadly matched
underlying revenue growth as we continued to pursue our
organic development strategy. The margin improvement reflects
a positive effect from portfolio changes.
In Insurance we continued to drive growth through enhanced
analytics, the extension of datasets, and by further expansion
in adjacent verticals. The US market environment returned to
historical trends in the fourth quarter, having been not quite as
favourable earlier in the year. The international initiatives
continued to progress well.
In Business Services, further development of analytics that help
our customers to detect and prevent fraud and to manage risk
across the financial and corporate sectors continued to drive
growth, in a positive US and international market environment.
Growth in the government and healthcare segments was driven by
continued development of sophisticated analytics, and other Data
Services continued to drive growth through organic development.
2018 outlook
The fundamental growth drivers of Risk & Business Analytics
remain strong, and we expect underlying operating profit growth
to continue to broadly match underlying revenue growth.
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
Underlying growth +8%
1,906
2,076
Underlying growth +8%
686
759
2016
2017
2016
2017
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RELX Group Annual reports and financial statements 2017
LexisNexis Risk Classifier:
helping people protect their
family’s financial future
Legal & General America is a wholly owned subsidiary of Legal & General
Group Plc, the London-based company which has been in business for
over 180 years, helping people protect against unforeseen circumstances
in their lives and save for a better financial future.
Troy Thompson of Legal & General America and team
About LexisNexis Risk Classifier
Using RELX Group’s HPCC Systems
super-computing power, LexisNexis
Risk Classifier assesses a proposed
insured’s risk profile and distills
it into a numeric score. Improving
the underwriting and consumer
experience, the Risk Classifier score
is delivered in real time without the
need for an invasive medical
examination or blood and urine tests.
Legal & General America has been in business for over 68 years
and has more than 1m current customers. In 2016 alone, the insurer
helped over 94,000 families obtain life insurance, with a combined
coverage of more than $55bn. In the event of a tragedy, life insurance
proceeds can help pay the bills, continue a business, finance future
needs including children’s education or pay for funeral costs.
Traditionally, the time to process fully underwritten life insurance
policies averages 30 days and includes an invasive medical
examination. However the expectations, needs and purchasing
habits of today’s consumers have changed. As a result, many
consumers drop out of the application process. Legal & General
America understood this and wanted to meet those needs.
The insurer selected LexisNexis Risk Solutions and its Fair Credit
Reporting Act (FCRA) governed advanced risk assessment solution,
LexisNexis Risk Classifier, to help individuals obtain life insurance
more easily, quickly and underwritten at a fair value. The underwriter
can now price policies in a matter of hours rather than days and
attract more customers, limit their reviews to more complex cases
that require their valuable expertise and lower underwriting
expenses by properly classifying applications up front and avoiding
more costly and invasive procedures.
Business review Risk & Business Analytics
25
Our mission is to protect people and ultimately
close the life insurance gap. The number of un-
insured and under-insured families is staggering.
We want our customers to be satisfied, and we
want to be able to offer life insurance simply.
By speeding up the process, LexisNexis Risk
Classifier appeals to consumers of all ages and
increased our output.
Troy Thompson
Senior Vice President and Chief Actuary,
Legal & General America
30
from 30 days to hours
– reducing the time it
takes to underwrite a
life insurance policy
26
Rolls-Royce’s business is about service, and
keeping aircraft flying with our engines on
them. To do that successfully, we want to avoid
surprises for customers while managing costs.
We wanted an experienced partner to help
further develop our data collection capabilities.
We needed a completely autonomous data set
and the independence of FlightGlobal’s data was
the attraction. At Rolls-Royce, we are keen to
pioneer novel uses of data, and we are delighted
this is an industry first.
Nick Ward
Head of Solution Management,
Digital OEM Solutions, Rolls-Royce
14,000
number of Rolls-Royce
civil aero engines in
service around the world
RELX Group Annual reports and financial statements 2017 Business review Risk & Business Analytics
27
FlightGlobal:
helping to keep jet
aero engines flying
Rolls-Royce, which has its Civil Aerospace headquarters in Derby
in the UK, is a world-leader in engineering and propulsion systems.
Its aero engines power the fleets of more than 250 airlines and
thousands of individual business jet operators.
Nick Ward of Rolls-Royce
About FlightGlobal
FlightGlobal is an industry-leading data provider
with one of the world’s most comprehensive data
stores on virtually every aspect of the global air
transport industry. That includes deep data on over
28,000 aircraft in the world airline fleet, the schedule
plans for 900 airlines and live tracking of 100,000 daily
flights. Linking these datasets is a data integration
challenge but generates significant value.
Rolls-Royce makes most of its aerospace revenues from
providing aftermarket services. Knowing how its engines
are performing as close to real time as possible is vital so
it can support its customers speedily and efficiently.
Like others in the industry, Rolls-Royce has relied on one
satellite- or airband radio-based digital datalink called
the Aircraft Communications Addressing and Reporting
System (ACARS) to report data on its engines. However,
as a services innovator Rolls-Royce has continued to look
for improvements in reliability and efficiency.
FlightGlobal’s Tracked Utilisation solution generates data
per aircraft equipped with Rolls-Royce engines within
three days of each tracked flight, meaning the company
can now rely on an independent record of its customers’
experience that identifies any gaps in ACARS. Tracked
Utilisation also allows the company to release
highly-skilled staff to focus on their core jobs – solving
problems and creating value for customers. Rolls-Royce
is the first in the industry to deploy Tracked Utilisation
and, following a successful trial period, has been rolling
out the product during 2017.
28
RELX Group Annual reports and financial statements 2017
Legal
We help lawyers win cases, manage their work more
efficiently, serve their clients better and grow their practices.
We assist corporations in better understanding their markets
and preventing bribery and corruption within their supply
chains. We partner with leading global associations and
customers to help collect evidence against war criminals
and provide tools to combat human trafficking. We endeavour
to advance the rule of law across the world.
§ The LexisNexis legal and news database contains 81bn
documents and records
§ 1.5m new legal documents are added daily to the database
from 54,000 sources, generating 20bn connections. In all,
20m legal documents are processed daily
§ Nexis news and business content includes 40,000 premium
sources in 30 languages, covering more than 150 countries.
It has data including 320m company profiles with a content
archive that dates back 40 years
§ The LexisNexis database includes more than 220m court
dockets and documents, 110m patent documents, 1.9m
State Trial Orders and 1.2m Jury verdict and settlement
documents
§ LexisNexis is committed to advancing the rule of law
through operations and solutions that provide transparency
into the law in more than 130 countries
Business overview
Legal is a leading global provider of legal, regulatory and business
information and analytics that helps customers increase productivity,
improve decision-making and outcomes and advance the rule of law
around the world.
LexisNexis Legal & Professional is headquartered in New York
and has further principal operations in Ohio, North Carolina
and Toronto in North America, London and Paris in Europe,
and cities in several other countries in Africa and Asia Pacific.
It has 10,600 employees worldwide and serves customers in
more than 130 countries.
Revenues for the year ended 31 December 2017 were £1,692m,
compared with £1,622m in 2016 and £1,443m in 2015. By
geographical market, 68% of revenue in 2017 was derived
from North America, 20% from Europe and the remaining 12%
from the rest of the world. In 2017, 77% of revenue came from
subscription sales and 23% from transactional sales.
LexisNexis Legal & Professional is organised in market-facing
groups. These are supported by global shared services
organisations providing platform and product development,
operational and distribution services, and other support
functions.
In North America, electronic reference, decision tools and
analytics help legal and business professionals make better
informed decisions in the practice of law and in managing their
businesses. The flagship product for legal research and analytics
is Lexis Advance, which provides statutes and case law together
with analysis and expert commentaries from secondary sources
such as Matthew Bender. In addition, Lexis Advance includes the
leading citation service, Shepard’s, which advises on the continuing
relevance of case law precedents. In North America, we also
provide customers with news and business information, ranging
from daily news to company filings, public records information,
legal analytics tools, practical guidance and efficiency solutions.
LexisNexis also partners with law schools to provide services to
students as part of their training.
In 2017, LexisNexis continued to release new versions of Lexis
Advance, an innovative web and mobile application designed to
transform how legal professionals conduct research and use
analytics and data to drive decision-making. Built on the New
Lexis advanced technology platform, Lexis Advance allows
customers within legal and professional organisations to find
relevant information more easily and efficiently, helping to drive
better outcomes. Future releases will continue to expand content
and add new innovative analytical tools extensively using machine
learning and natural language processing. LexisNexis employs
lawyers and trained editors with professional legal backgrounds
who review, annotate and update its legal content to help ensure
each document in the collection is current and comprehensive.
This domain expertise combined with Artificial Intelligence and
RELX Group’s big data HPCC Systems technology enables
LexisNexis to update its entire legal collection faster and more
efficiently than before, while also identifying and linking content,
enabling customers to identify previously undiscovered
relationships between documents.
Business review Legal
29
New analytical tools and content sets are regularly introduced
on Lexis Advance. For example, in 2017 LexisNexis released
Lexis Answers, which leverages advanced natural language
processing technologies to deliver concise and authoritative
answers to users’ questions alongside comprehensive search
results. In 2017 LexisNexis also continued to make enhancements
to Lexis Practice Advisor by integrating Lexis Search Advantage,
a tool that enriches search and analytics across firm documents
and LexisNexis content, and launching a redesigned user
interface with improved browsing capabilities.
LexisNexis continues to expand the reach of its analytical decision
tools. For instance, in 2017 Lex Machina, a legal analytics tool
providing actionable insights about judges, lawyers, parties and
cases, expanded its practice area coverage to include Commercial,
Employment, and Bankruptcy Litigation. In 2017, LexisNexis also
acquired Ravel Law, a legal research, analytics and visualisation
platform that mines published case opinions, providing a wealth
of information that helps litigators quickly uncover new insights
and build specific arguments for use in court. The acquisition will
expand the LexisNexis Legal Analytics suite of products through
full integration of Ravel Law’s judicial analytics, data visualisation
technology and unique case law PDF content from the Harvard
Law Library into Lexis Litigation Profile Suite and Lexis Advance.
These tools complement the Lex Machina analytics solution
and strengthen the LexisNexis position as a leader in the legal
analytics space.
In Canada, LexisNexis released new versions of Lexis Advance
Quicklaw with significant content and functionality enhancements,
including improved search and browsing and point-in-time and
aggregated views of legislation. LexisNexis Canada also released
The Lawyer’s Daily, the first online-only daily legal news service
in the market, and continued to build out Lexis Practice Advisor
Canada with additional modules, tools and content.
LexisNexis also supplies Business of Law Software Solutions
to law firms and corporate legal departments. These solutions
include practice management solutions, including time and
billing systems, case management, cost recovery and document
management services.
In international markets outside North America, LexisNexis
serves legal, corporate, government, accounting and academic
markets in Europe, Africa and Asia Pacific with local and
international legal, regulatory and business information.
The most significant of these businesses are in the UK, France,
Australia and South Africa.
LexisNexis focuses on providing customers with leading
collections of content and innovative online solutions to help
legal and business professionals make better decisions
more efficiently.
In the UK, LexisNexis is a leading legal information provider
offering an unrivalled collection of primary and secondary
legislation, case law, expert commentary, practical guidance
and current awareness. Its extensive portfolio includes a number
of leading brands: Halsbury’s, Butterworths, Tolley, MLex and
Jordan Publishing. Jordan Publishing‘s market-leading content
offering includes flagship titles such as Family Court Practice,
Family Law Reports and Gore-Browne on Companies.
In 2017, LexisNexis UK continued to build on its LexisPSL practical
guidance product suite by launching new sector specific content
modules in Technology, Media and Telecommunications (TMT),
Financial Services, and Risk and Compliance. LexisNexis UK
continued to expand LexisPSL functionality, improving search
performance by further optimising practice note content retrieval.
Contract productivity and proof reading tool, LexisDraft has
become firmly embedded in the UK legal services market.
MLex continues to break market-moving news and has become
a regularly cited source for mainstream news outlets. Tolley, the
LexisNexis tax intelligence suite, continued to expand its reach
in 2017, with TolleyGuidance expanding its presence across
multiple customer segments.
LexisNexis UK legal practical guidance service
Provides Legal Analytics to companies and
law firms, enabling them to craft successful
strategies, win cases and close business
New resource that offers guidance to help
attorneys handle transactional matters
more efficiently and effectively
Leading legal news provider covering the
entire spectrum of practice areas every single
business day
Critical analysis, checklists, forms and
practice guides authored by industry experts
covering over 50 major practice areas
New online legal research tool that
transforms the way legal professionals
conduct research
Premier citations service
A media organisation providing exclusive
market insight, analysis and commentary
on regulatory risk
LexisNexis UK flagship legal online product
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RELX Group Annual reports and financial statements 2017
In France, LexisNexis is a leading online provider of information
to lawyers, notaries and courts. JurisClasseur and other leading
authoritative content such as JurisData are provided through
multiple formats. These content sources have been combined
with new content and innovative decision tools to develop practical
guidance and practice management solutions. LexisNexis
France’s main offering is Lexis360, which combines legal
information, practical content and results from the web. In 2017,
LexisNexis launched a Lexis360 version adapted for Austria.
In 2017, LexisNexis France integrated the first predictive analytics
indemnity calculation tool in France on Lexis360 and launched
Lexis Actu, a real-time legal news service.
In South Africa, LexisNexis launched Lexis Assure, a compliance
planning solution. In the Middle East, LexisNexis launched a news
mobile app to enrich Lexis Middle East Law.
In the Asia Pacific region, LexisNexis continued to focus on
providing authoritative local online content embedded in decision
tools for legal professionals. As of 2017, Lexis Advance has
launched in Australia and New Zealand, enabling improved
analytics, data visualisation and user experience. Lexis Advance
will continue to roll out in Asia Pacific with launches in Hong Kong,
Singapore and Malaysia to commence in 2018. In 2017, Lexis China
launched a new big data solution to improve citation processing
speed and LexisNexis was recognised by the Australian Centre
for Corporate Social Responsibility as one of the Top 10 socially
responsible companies in Australia, due to LexisNexis’s
commitment to the Rule of Law.
Market opportunities
Longer-term growth in legal and regulatory markets worldwide
is driven by increasing levels of legislation, regulation, regulatory
complexity and litigation, and an increasing number of lawyers.
Additional market opportunities are presented by the increasing
demand for online information solutions, legal analytics and other
solutions as well as practice management tools that improve the
quality and productivity of research, deliver better legal outcomes
and improve business performance. Notwithstanding this, legal
activity and legal information markets are also influenced by
economic conditions and corporate activity, as has been seen with
the continued subdued environment in North America and Europe.
Strategic priorities
LexisNexis Legal & Professional’s strategic goal is to enable
better legal outcomes and be the leading provider of productivity-
enhancing information, analytics and information-based decision
tools in its market. To achieve this, LexisNexis is focused on
introducing next-generation products and solutions on the global
New Lexis platform and infrastructure; leveraging New Lexis
globally to continue to drive print-to-electronic migration and
long-term international growth; and upgrading operational
infrastructure, improving process efficiency and gradually
improving margins.
In the US, LexisNexis is focused on the continuing development
of legal research and practice solutions that help lawyers make
data-driven decisions. Over the coming years, progressive
product introductions, based on the New Lexis platform and
powered by big data HPCC Systems technology, will combine
advanced technologies, enriched content and sophisticated
analytics to enable LexisNexis customers to make data-driven
legal decisions and drive better outcomes for their organisations
and clients.
Outside the US, LexisNexis is focused on growing online services
and developing further high-quality actionable content and
decision tools, including the continuous development of practical
guidance and practice management applications. In 2018,
LexisNexis will continue to expand the New Lexis platform
globally. Additionally, LexisNexis is focusing on the expansion
of its activities in emerging markets.
Business model, distribution channels and competition
LexisNexis Legal & Professional products and services are
generally sold directly to law firms and to corporate, government,
accounting and academic customers on a paid subscription basis,
with subscriptions with law firms often under multi-year contracts.
Principal competitors for LexisNexis in US legal markets
are Westlaw (Thomson Reuters), CCH (Wolters Kluwer) and
Bloomberg. In news and business information key competitors
are Bloomberg and Factiva (News Corporation).
Significant international competitors include Thomson Reuters,
Wolters Kluwer and Factiva.
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
REVENUE BY TYPE
£1,692m
Print
17%
£1,692m
Rest of world
12%
Europe
20%
£1,692m
Transactional
23%
Electronic
83%
North
America
68%
Subscription
77%
Business review Legal
31
2017 financial performance
Revenue
Adjusted operating profit
2017
£m
1,692
332
2016
£m
1,622
311
Underlying
growth
Acquisitions/
disposals
+2%
+11%
-3%
-10%
Currency
effects
+5%
+6%
Total
growth
+4%
+7%
Underlying revenue growth in 2017 was in line with the prior
year, with continued efficiency gains driving strong underlying
operating profit growth.
Underlying revenue growth was +2%. The difference between
the reported and underlying growth rates reflects the impact of
exchange rate movements and portfolio changes including the
acquisition of Ravel Law, the disposal of several print and services
assets, and the final exit from the Martindale Hubbell joint venture.
Electronic revenues saw continued growth, partially offset by
print declines. The roll-out of new platform releases across our
US and international markets continued, with broader datasets
and the continued expansion of early stage legal analytics.
The usage migration of US legal customers onto Lexis Advance
is now substantially complete.
US and European markets remained stable. Other international
markets continued to grow well.
Underlying adjusted operating profit growth was +11%. The
increase in operating profit margin reflects ongoing organic
process improvement and decommissioning of systems which,
together with currency movements, more than offset a lower
profit contribution from joint ventures and other portfolio effects.
2018 outlook
Trends in our major customer markets are unchanged, continuing
to limit the scope for underlying revenue growth. We expect
underlying profit growth to remain strong.
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
Underlying growth +2%
1,622
1,692
Underlying growth +11%
311
332
2016
2017
2016
2017
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RELX Group Annual reports and financial statements 2017
In the competitive field of patent litigation,
having access to the data and the analytics
that Lex Machina provides is what you need
to make strategic recommendations to clients
and make well-informed decisions. In today’s
legal environment, using analytics tools like
Lex Machina is table stakes to be competitive.
Dr Christian Mammen
Partner, Hogan Lovells
<60 mins
less than 60 minutes
to build a solid picture
of a new case using
Lex Machina’s analytics
Business review Legal
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Lex Machina:
using legal analytics to
help lawyers win business
and cases
Hogan Lovells is an Am Law 100 global firm operating on six continents.
Its San Francisco office uses LexisNexis’ Lex Machina Legal Analytics
platform to mine millions of pages of legal information to help lawyers
make data-driven decisions, stay competitive and make better strategic
client recommendations.
Hogan Lovells’ San Francisco office advises clients on
how to manage intellectual property litigation, among
other practice areas. Its lawyers use Lex Machina’s Legal
Analytics to mine litigation data, revealing insights about
judges, lawyers, parties and the subjects of the cases
themselves that have never before been available.
The technology enables them to quickly discover and
communicate meaningful patterns in the data, and
make more effective recommendations to their clients.
Dr Christian Mammen of Hogan Lovells
About Lex Machina
Lex Machina is a big data solution that mines
vast amounts of legal data and extracts key
information, which companies and law
firms use to win business and win cases.
Lex Machina scans data from more than
32m Federal US Docket entries, then uses
Artificial Intelligence tools such as Natural
Language Processing and Machine
Learning to clean, tag and structure that
data. The results are presented using
advanced visualisation technology. Lex
Machina initially focused on intellectual
property law, and is in the process of rolling
out Legal Analytics for the rest of the law.
New practice areas include antitrust,
securities, commercial, employment and
bankruptcy law.
34
RELX Group Annual reports and financial statements 2017
Exhibitions
We help match customers with the right solution. Our events
enable customers to learn about a market, source products
and complete transactions, generating billions of dollars of
revenues for the economic development of local markets and
national economies around the world.
§ More than 500 events are in the Reed Exhibitions portfolio
§ 43 industry sectors are served in 30 countries across
the globe
§ Each year we host around 130,000 exhibitors attracting
more than 7m participants
§ Our digital products increase the value of our events to
participants, enabling them to make new contacts and
meet face-to-face to do business . In 2017, 200 events
offered matchmaking and the vast majority of customers
using the matchmaking service reported higher value
and satisfaction
Business overview
Exhibitions is the world’s leading events business, enhancing the
power of face-to-face through data and digital tools at over 500
events, in 30 countries, attracting more than 7m participants.
Reed Exhibitions is a global business, headquartered in London
and has further principal offices in Paris, Vienna, Moscow,
Norwalk (Connecticut), Mexico City, São Paulo, Abu Dhabi,
Beijing, Tokyo and Sydney. Reed Exhibitions has 4,000 employees
worldwide, and its portfolio of events serves 43 industry sectors
in 30 countries.
Revenues for the year ended 31 December 2017 were £1,109m
compared with £1,047m in 2016 and £857m in 2015. In 2017, 21%
of Reed Exhibitions’ revenue came from North America, 39%
from Europe and the remaining 40% from the rest of the world
on an event location basis.
Reed Exhibitions organises market-leading events which are
relevant to industry needs, where participants from around the
world meet face-to-face to do business, to network and to learn.
Its events encompass a wide range of sectors. They include
construction, cosmetics, electronics, energy and alternative
energy, engineering, entertainment, gifts and jewellery,
healthcare, hospitality, interior design, logistics, manufacturing,
pharmaceuticals, real estate, recreation, security and safety,
transport and travel.
Market opportunities
Growth in the exhibitions market is influenced both by business-
to-business marketing spend and by business investment.
Historically, these have been driven by levels of corporate
profitability, which in turn has followed overall growth in gross
domestic product. Emerging markets and higher growth sectors
provide additional opportunities. Reed Exhibitions’ broad
geographical footprint allows it to effectively and efficiently
capture growth opportunities globally as they emerge.
As some events are held other than annually, growth in any one
year is affected by the cycle of non-annual exhibitions.
Business review Exhibitions
35
Strategic priorities
Reed Exhibitions’ strategic goal is to deliver measurably higher
value and improved outcomes to its customers. It is achieving
this by being the best at understanding and responding to those
customers’ needs and business objectives and the changing
markets it serves.
Reed Exhibitions delivers a platform for industry communities
to conduct business, to network and to learn through a range
of market-leading events in all major geographic markets and
higher growth sectors, enabling exhibitors to target and reach
new customers quickly and cost effectively.
Organic growth will be achieved by continuing to generate greater
customer value through combining the best of face-to-face with
data and decision tools, launching new events, and by leveraging
its global network and technology platforms for faster and more
agile development and deployment of innovation. Reed Exhibitions
is also actively shaping its portfolio through a combination of
strategic partnerships and acquisitions in faster growing sectors
and geographies, as well as by withdrawing from markets and
industries with lower long-term growth prospects.
Reed Exhibitions is committed to continuously improving
customer solutions and experience by developing global
technology platforms based on industry databases, digital tools
and analytics. By providing a variety of services, including its
integrated web platform, the company continues to drive up
customer satisfaction by proactively putting the right buyers
and sellers together on the event floor. Increasingly, digital and
multichannel services such as active matchmaking are becoming
a normal part of the customer expectation and product offering,
enhancing the value delivered through attendance at the event.
Using customer insights, Reed Exhibitions has developed an
innovative product offering that underpins the value proposition
for exhibitors by broadening their options in terms of the type
and location of stand they take and the channels through which
they can address potential buyers.
In 2017 Reed Exhibitions launched 36 new events. These included
many events which delivered on the strategy of taking sector
expertise, customer relationships and leading brands from one
market and extending them into new geographies using local
operational capability.
Strong brands and value propositions in long established areas
continued to be expanded into new geographic markets such
as Oceanology International in the USA.
Reed Exhibitions is active in developing exhibition markets
with launches in Mexico, Brazil, South Korea, South Africa,
UAE, Indonesia and China.
Emerging high potential sectors were served through innovative
and highly curated launches such as Esports Bar and MIPIM
Property Tech Summit.
Reed Exhibitions Japan continued its successful launch
programme, with 14 launches in multiple segments and locations.
After the successful 2016 launch of ComplexCon the fashion
portfolio Agenda continued to reflect the changing nature of the
fashion industry by launching the direct-to-consumer Agenda
Festival.
The POP culture portfolio continued its successful run of launches
with new events in South Korea (Comic Con Seoul) and by serving
new sub-sectors such as table top gaming through the PAX
Unplugged launch.
A number of acquisitions and investments were completed during
2017. These included MCM Comic Con in the UK, Café Seoul in
South Korea and three fitness shows in Australia.
MIPIM: The world’s property market
ISC West: International security conference
Emerald City Comic Con: A premier comic
book and pop culture convention
LONDON
World Travel Market: Premier global event
for the travel industry
Automotive World: Japan’s largest show
for advanced automotive technologies
Manufacturing World Nagoya: Central Japan’s
manufacturing industry trade event
Retail Business Technology Expo:
A leading event for the retail industry
InterCHARM: International perfumery and
cosmetics exhibition
Batimat France: A leading international
trade fair for the building industry
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RELX Group Annual reports and financial statements 2017
Business model, distribution channels and competition
Over 70% of Reed Exhibitions’ revenue is derived from exhibitor
fees, with the balance primarily consisting of admission charges,
conference fees, sponsorship fees and online and offline
advertising. Exhibition space is sold directly or through local
agents where applicable. Reed Exhibitions often works in
collaboration with trade associations, which use the events to
promote access for members to domestic and export markets,
and with governments, for which events can provide important
support to stimulate foreign investment and promote regional
and national enterprise. Increasingly, Reed Exhibitions is offering
visitors and exhibitors the opportunity to interact before and after
the show through the use of digital tools such as online directories,
matchmaking and mobile apps.
Reed Exhibitions is the global market leader in a fragmented
industry, holding less than a 10% global market share. Other
international exhibition organisers include UBM, Informa and
some of the larger German Messen, including Messe Frankfurt,
Messe Düsseldorf and Messe Munich. Competition also comes
from industry trade associations and convention centre and
exhibition hall owners.
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
EVENTS REVENUE BY SOURCE
£1,109m
Electronic
4%
£1,109m
Rest of
world
40%
North
America
21%
£1,109m
Other 28%
Face-to-face
96%
Europe
39%
Exhibition
fees 72%
Business review Exhibitions
37
2017 financial performance
Revenue
Adjusted operating profit
2017
£m
1,109
285
2016
£m
1,047
269
Underlying
growth
Acquisitions/
disposals
+6%
+2%
+1%
-1%
Currency
effects
+5%
+5%
Total
growth
+6%
+6%
Underlying revenue growth rates exclude exhibition cycling effects.
Exhibitions achieved strong underlying revenue growth in 2017,
a slight acceleration from the prior year, with underlying
operating profit growth reflecting cycling-out effects.
Underlying revenue growth was +6%. After portfolio changes and
six percentage points of cycling-out effects, constant currency
revenue growth was +1%. The difference between the reported
and constant currency growth rates reflects the impact of
exchange rate movements and portfolio changes, including the
acquisition of MCM Comic Con (UK), Cafe Seoul (South Korea) and
Fitness (Australia), and the disposal of a number of small events.
Underlying adjusted operating profit growth was +2% reflecting
cycling-out effects.
We continued to pursue organic growth opportunities, launching
36 new events, and piloting several data analytics opportunities.
Overall growth remained good in Europe and strong in Japan and
China. The US continued to see differentiated growth rates by
industry sector. Revenues in Brazil continued to reflect the
general weakness of the wider economy. Most other markets
continued to grow strongly.
2018 outlook
We expect underlying revenue growth trends to continue.
In 2018 we expect cycling-in effects to increase the reported
revenue growth rate by four to five percentage points.
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
Underlying growth +6%
1,047
1,109
Underlying growth +2%
269
285
2016
2017
2016
2017
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38
RELX Group Annual reports and financial statements 2017
INTERPHEX:
a catalyst for business
growth and innovation
SKAN, headquartered in Switzerland, is the global market leader in
barrier isolation technology used for aseptic drug manufacturing in the
pharmaceutical industry. The company has built its success on product
innovation and isolator customisation. SKAN’s guiding principle is
‘Together, Always One Step Ahead’, a philosophy it has applied to increasing
business advantage during its 14-year partnership with INTERPHEX.
SKAN established its US subsidiary in 2002 and
exhibited at INTERPHEX in New York for the first time
in 2003. Today, SKAN US sales and services account
for nearly 40% of SKAN global revenues, and
INTERPHEX is SKAN’s premier event in North
America, providing a vital platform for product
demonstration, new business generation and
customer outreach. In 2017, SKAN launched its newly
patented NANOX catalyst technology which helps to
achieve breakdown and removal of hydrogen peroxide
more efficiently. INTERPHEX 2017 generated over
200 sales leads for SKAN, with many high quality sales
leads requiring immediate follow up. The company
also delivered a technical presentation at INTERPHEX
Live which was filmed and made available online. This
video has gone on to generate over 1,000 on-demand
views, extending SKAN’s partnership with INTERPHEX
beyond the event.
About INTERPHEX
International Pharmaceutical Expo (INTERPHEX)
is North America’s leading event dedicated to
pharmaceutical, biotechnology and device innovation,
technology and knowledge, from development
through to commercialisation. Located in New York,
it brings more than 10,500 global industry
professionals and 530+ leading suppliers together
each year. It provides a unique combination of
exhibition, technical conference, workshops,
partnering opportunities, networking events and
awards, designed to drive quality, productivity and
cost efficiency in an increasingly competitive global
market. In 2017 the event supported more than 20
North American and worldwide technology launches.
Larry Cabeceiras of SKAN
Business review Exhibitions
39
The volume of sales leads generated at our
booth, and the overall networking opportunities
available to us during INTERPHEX, far exceeds
all the other US events SKAN attends on an
annual basis.
Larry Cabeceiras
President, SKAN US
10,500
industry professionals
from 49 countries attended
INTERPHEX in 2017
40
RELX Group Annual reports and financial statements 2017
Business review
41
Corporate
Responsibility
The Corporate Responsibility Report is
an integral part of our Annual Reports
and Financial Statements. This section
highlights progress on our 2017 corporate
responsibility objectives. The full 2017
Corporate Responsibility Report is available
at www.relx.com/go/CRReport
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RELX Group Annual reports and financial statements 2017
Corporate responsibility
We define corporate responsibility
(CR) as the way we do business
and our efforts to increase our
positive impact and reduce
any negative impact. It ensures
good management of risks and
opportunities, helps us attract
and retain the best people and
strengthens our corporate
reputation.
It means performing to the highest commercial and ethical
standards and channelling our knowledge and strengths, as
global leaders in our industries, to make a difference to society.
We regularly survey key stakeholders, including in 2017,
shareholders, employees, governments and communities
where we operate, to help us identify our material corporate
responsibility issues and to set and test our CR objectives.
The Board of Directors, senior management and our Corporate
Responsibility Forum oversee CR objectives and performance.
We concentrate on the contributions we make as a business
and on good management of the material areas that affect
all companies:
1. Our unique contributions
2. Governance
3. People
4. Customers
5. Community
6. Supply chain
7. Environment
We are committed to the United Nations (UN) Global Compact
to which we are a signatory and are dedicated to advancing the
UN’s Sustainable Development Goals (SDGs) by 2030.
1. Our unique contributions
We make a positive impact on society through our knowledge,
resources and skills, including:
§§ universal sustainable access to information
§§ advancing of science and health
§§ protection of society
§§ promotion of the rule of law and justice
§§ fostering communities
Scientific, Technical & Medical
Elsevier, the world’s leading provider of scientific, technical
and medical information, plays an important role in advancing
human welfare and economic progress through its science and
health information, which spurs innovation and enables critical
decision-making. To broaden access to its content, Elsevier
supports programmes where resources are often scarce.
Among them is Research4Life, a partnership with UN agencies
and approximately 200 publishers; we provide core and
cutting-edge scientific information to researchers in 100
developing countries. As a founding partner and the leading
contributor, Elsevier provides over a quarter of the material
available in Research4Life, encompassing approximately 3,000
Elsevier journals and 20,000 e-books. In 2017, there were 2.4m
Research4Life article downloads from ScienceDirect.
In the year, we expanded Research without Borders which pairs our
colleagues’ research expertise with the needs of the African health
science community. Working with the African Journal Partnership
Program, Elsevier contributed 20 volunteers for a total of 48 weeks
to help African journals boost their research impact through the
Elsevier Foundation’s Research without Borders programme.
According to Dr. Lucinda Manda-Taylor, Editor-in-Chief of the
Malawi Medical Journal who worked with Cynthia Clark, Director
of Digital Journals at Elsevier, “I cannot stress enough how helpful
it was to have a volunteer Elsevier publisher for the Malawi Medical
Journal. It helped the editorial team implement some key tasks that
will improve our digital connection with the outside world through
interactions on our website and social media pages.”
Risk & Business Analytics
Risk & Business Analytics’ tools and resources help law
enforcement keep communities safe and help protect society
by detecting and preventing fraud across a range of business
sectors and at the US federal, state and local government levels.
For example, since 2015, the city of Stockton, California’s police
department has been using LexisNexis Accurint Crime Analysis
predictive analytics to help reduce violent gun crime.
In the year, colleagues at Accuity, which provides comprehensive
data and software to support financial processing risk and
compliance, collaborated with policy makers on the European
Union’s 5th Anti-Money Laundering Directive, to halt money
laundering and terrorist financing.
We developed the ADAM programme more than 17 years ago to
help the National Centre for Missing & Exploited Children in the
US find missing children. ADAM distributes missing child alert
posters to law enforcement, hospitals, libraries and businesses
within specific geographic search areas. The system was expanded
to allow individuals to receive an alert via email when a child is
reported missing near to them. In 2017, 14 children were found
through ADAM, bringing the total number of children recovered to
177 since the start of the programme in 2000. We also worked with
Amber Alert Europe and Portsmouth University to scope a training
course for UK police forces and other agencies involved in missing
cases such as social services, schools and health professionals.
In 2017, Proagrica, dedicated to feeding the world sustainably
through its content and solutions, launched Future Farming, to
help farmers use local, national and international field, crop and
other data to make better farming decisions.
43
RELX Group SDG
Resource Centre:
informing the world
In 2017, we launched the free
RELX Group SDG Resource Centre
(sdgresources.relx.com) to advance
awareness, understanding and
implementation of the 17 UN Sustainable
Development Goals (SDGs) which aim
to end poverty, protect the planet, and
ensure prosperity for all people by 2030.
To illuminate the SDGs, the site provides leading edge articles,
reports, tools, events, videos and legal practical guidance
from across RELX Group. It also features content from partners,
the United Nations Global Compact and the United Nations
Development Programme.
It contains unique research from Elsevier on the state of science
underpinning the SDGs; Risk and Business Analytics content
from Proagrica that combines data and analysis to improve
agricultural yields and ensure sustainable land use; the Rule
of Law Impact Tracker developed by LexisNexis Legal &
Professional and the World Justice Project; and information
on shows like Reed Exhibitions’ World Future Energy Summit
focused on affordable, clean energy and World Travel Market
dedicated to sustainable tourism.
The SDG Resource Centre is also fostering rich discussion about
SDG solutions through our Mendeley reference management
and online social networking platform.
What we do impacts the world. Our products
and services shed light on some of the most
pressing global issues. The RELX Group SDG
Resource Centre will aid researchers and the
public by giving them access to critical content
that informs understanding about the SDGs.
Erik Engstrom
CEO, RELX Group
77,000
sources in the RELX
Group SDG Resource
Centre’s SDG News
Tracker for up to the
minute news on the SDGs
from around the world
Business review Corporate Responsibility 44
RELX Group Annual reports and financial statements 2017
1. Our unique contributions (continued)
During 2017, RBI continued to support the Tech Talent Charter,
committed to increasing the ratio of women and under-represented
groups in technology. RBI women in technology, who comprise 26%
of the business unit’s UK technology workforce (17% national
average), held a Tech Day for girls from local schools.
mobile and contactless payment technology for accountable
revenue collection and data management to sustain urban and
rural water systems throughout the developing world. They will
use the prize to install 60 eWATERtaps and to repair three large
solar pumped water systems, benefiting over 8,000 people in the
Upper River and Lower River of The Gambia.
2017 OBJECTIVES
Achievement
Legal
LexisNexis Legal & Professional promotes the rule of law and
access to justice through its products and services. During 2017,
we collaborated with the Republic of Fiji to consolidate the
country’s laws and make them publicly available for the first time.
We assisted the United Nations Global Compact (UNGC) and other
UN agencies to promote business engagement on the rule of law
throughout the year, including by supporting the documentation
of land rights in Myanmar. In the year, we launched the Rule of Law
Café, in partnership with the UNGC Network UK, giving peers and
members of the legal community an opportunity to share their
efforts to advance the rule of law. In 2017, LexisNexis Legal &
Professional received Freedom House’s Corporate Leadership
Award for its work to advance the rule of law.
Exhibitions
Reed Exhibitions’ events strengthen communities and support
our CR focus areas.
Each year, World Travel Market (WTM), Reed Exhibitions’ flagship
show for the travel and tourism industry, holds World Responsible
Tourism Day, which includes the Responsible Tourism awards.
In recognition of the 2017 International Year of Sustainable
Tourism for Development, leaders were chosen for how they
are demonstrating impact and their alignment with one or more
of the SDGs. Winners included Village Ways, India, named best
for poverty reduction and Chobe Game Lodge, Botswana, named
best for carbon reduction. In 2017, WTM also held a roundtable at
the UK House of Lords, hosted by Baroness Morris of Bolton, with
leaders in tourism and other fields to discuss tangible ways of
addressing child trafficking and tourism and orphanage tourism.
Also in 2017, more than 1,700 science and marine technology
professionals from 46 countries attended Reed Exhibitions’
inaugural Oceanology International North America conference
and exhibition in San Diego. Among conference topics was
sustainable port management and environmental protection.
Across RELX Group
In 2017, we launched the free RELX Group SDG Resource Centre
www.sdgresources.relx.com to advance awareness,
understanding and implementation of the 17 SDGs to end poverty,
protect the planet, and ensure prosperity for all people by 2030.
The site features articles, tools, news, events, networking and
original research, including in 2017, a review of education and
sustainable development (SDG 4) with citable statistics on
scholarly output, impact and collaboration.
2017 marked the seventh year of the RELX Group Environmental
Challenge, focused on providing improved and sustainable
access to water and sanitation where it is presently at risk.
The $50,000 first prize winner, eWATER, uses leading-edge
Advance of science
and health: expand
“Research Without
Borders” to build
editorial skills through
journal mentoring and
training
Protection of society:
help broaden reach of
ADAM programme; new
training programme on
missing people for UK
law enforcement
Promotion of the rule
of law and access to
justice: assist UNGC in
embedding Business for
the Rule of Law and work
with UN Development
Programme and
Member States to
support reporting
progress on SDGs
Fostering communities:
World Travel Market
(WTM) to convene travel
industry roundtable
for collaboration on
responsible tourism key
challenges, including
anti- trafficking
initiatives
Universal, sustainable
access to information:
launch free access SDG
Resource Centre
§§ 20 Elsevier research experts spent
a combined 48 weeks training
African health journal teams in
DRC, Ethiopia, Ghana, Kenya,
Malawi, Mali, Rwanda and Uganda
§§ Additional training held in
Amsterdam for editors from Mali
Medical Journal and the DRC’s
Annales Africaines de Medecine
§§ ADAM programme platform
extended to allow individuals to
receive missing child email alerts;
14 children found through ADAM
§§ Supporting new missing child
cases training course for UK
policing
§§ Micro-site created on SDG
Resource Centre for Global
Alliance on Reporting Progress on
Just, Peaceful and Inclusive
Societies as a repository to aid
member state reporting on SDG16
§§ Created Business for the Rule of
Law Café in partnership with
UNGC Network UK with
participation from customers,
peers, academia and colleagues
to share information on going
beyond legal minimums to
advance the rule of law
§§ Largest responsible tourism
programme at WTM London to
date with 27 sessions, including
two focused on increasing
awareness of modern slavery,
trafficking, human rights and
orphanage tourism
§§ Roundtable at House of Lords with
leaders in tourism and other fields
to discuss tangible ways of
addressing child trafficking and
tourism and orphanage tourism
§§ RELX Group SDG Resource Centre
launched at Inspiration Day
drawing 100+ attendees
§§ Nearly 10,000 unique visitors
by year-end; 34% of visitors via
organic search
Business review Corporate Responsibility
45
2018 OBJECTIVES
§§ Advance and make publicly available, research on the state
of science underpinning the SDGs
§§ Partner with the National Centre for Missing and Exploited
Children to expand ADAM programme email alerts to US
consumers; advance training course for UK policing on
missing cases
§§ Roll out RELX Group Rule of Law Cafes across multiple
jurisdictions
§§ Advance sustainability content across show portfolios
§§ New functionality for SDG Resource Centre including
integration of UN and other partner content
OUR 2030 VISION
Use our products and expertise to advance the SDGs, among them:
§§ SDG 3: Good health and well-being
§§ SDG 4: Quality education
§§ SDG 10: Reduced inequalities
§§ SDG 13: Climate action
§§ SDG 16: Peace, justice and strong institutions
Enrich the SDG Resource Centre to ensure essential content,
tools and events on the SDGs are freely available to all.
2. Governance
Our Code of Ethics and Business Conduct (the Code) is
disseminated to every employee and sets the standards for our
corporate and individual conduct. Among other topics, the Code
continues to address fair competition, anti-bribery, conflicts of
interest, employment practices, data protection and appropriate
use of company property and information. It also encourages
reporting of violations – with an anonymous reporting option –
and prohibits retaliation against anyone who believes and reports
a potential violation of the Code or law.
The Code incorporates the principles of the UNGC and stresses
our commitment to human rights. In accordance with the UN’s
Guiding Principles on Business and Human Rights, we have
considered where and how we operate and have concluded that
there is low human rights risk in our direct employment activities
(for more information on human rights see “Supply chain” on
page 49). In 2017, we updated our Modern Slavery Act Statement
which highlights how we are working internally, through our
supply chain and externally with partners to address the risk
of slavery and human trafficking.
We maintain a comprehensive set of compliance policies and
procedures in support of the Code. These are reviewed at least
annually to ensure they remain current and effective. They help us
comply with the law and conduct our business in an open, honest,
ethical and principled way. In the case of our anti-bribery efforts,
they comprise part of our adequate procedures for compliance
with applicable laws.
Employees receive mandatory training on the Code – both new hires
and at regular intervals for all employees – in order to maintain a
respectful workplace, prevent bribery and protect personal and
company data. Mandatory periodic training covers key Code topics
in depth, such as competition law and records management, which
is supplemented by in-person training for higher-risk roles.
In 2017, we took a number of steps to further enhance and embed
our culture of compliance across RELX Group, including reorganising
the RELX Group Compliance function around globally recognised
compliance principles and creating a central compliance team
devoted to training, communications and investigations and a
second team devoted to risk assessment and monitoring; increasing
the number of employees devoted to compliance and increasing
collaboration among RELX Group compliance committees.
Reports of violations of the Code or related policies are promptly
investigated, with careful tracking and monitoring of violations
and related mitigation and remediation efforts by Compliance
teams across the business. In 2017, we continued training of
investigators who handle employee relations and financial
misconduct matters.
We remained diligent in our ongoing efforts to ensure compliance
with applicable bribery and sanctions laws and to mitigate bribery
risks. We continue to monitor and assess the implementation of our
anti-bribery requirements, including developing detailed, risk-based
internal policies and procedures for key compliance-related business
processes and functions; conducting periodic risk assessments;
establishing gift and entertainment limits; and enforcing clear
rules on doing business with Government officials. In addition,
intermediary relationships and acquisition targets are specifically
evaluated for risk using third-party questionnaires, references
and detailed electronic searches. Similarly, in the area of sanctions
compliance, we refreshed our internal policies and guidance to
comport with changes in applicable regulations, implemented
“Know Your Customer” tools to enhance customer screening efforts,
and enhanced quality assurance reviews and risk assessments.
In 2017, we expanded fraud prevention and cyber security
awareness efforts and continued to tighten related controls
through mandatory training Group-wide, with risk-based
information security presentations for finance and HR teams
across the business and employees in Manila and Chennai.
We also began rolling out a PhishMe button integrated into our
email client to allow employees to make an immediate report,
and provided a Group-wide phishing simulation.
As a signatory to the UNGC and its principles, encompassing
labour, environment, anti-corruption and human rights, we
demonstrated leadership by becoming a LEAD company, taking
part in their SDG Action Platforms, including the Blueprint for SDG
Leadership. We also served in the year on the Board of the UNGC
UK Network and spoke on panels at their Making Global Goals
Local Business conference in New Delhi and the Leaders Summit
during the UN General Assembly in New York, when Teresa
Jennings of LexisNexis Legal & Professional was named an SDG
Pioneer for her efforts to advance the rule of law. UNGC peers
judged our Communication on Progress, required of signatories
annually, to have attained Advanced Level. We were also active
in the Dutch UNGC network.
In 2017, the RELX Group global business paid £449m in corporate
taxes. We are a responsible corporate taxpayer and conduct
our tax affairs to ensure compliance with all laws and relevant
regulations in the countries in which we operate. Tax is an important
issue for our stakeholders and society at large. We have set out
our approach to tax in our global tax strategy. This incorporates
our Tax Principles along with additional disclosures around where
we pay taxes and our broader contribution to society. This is made
publicly available on our website (www.relx.com/go/TaxPrinciples).
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RELX Group Annual reports and financial statements 2017
2. Governance (continued)
3. People
Our people are our strength. Our workforce of about 30,000 people
is 51% female and 49% male, with an average length of service of
nine years. There were 43% female and 57% male managers, and
29% female and 71% male senior operational managers.
Board of Directors
Senior operational
managers*
Female
36%
29%
4
93
Male
64%
7
223
71%
All employees**
15,850
51%
15,150
49%
* Senior operational managers are defined as those managers up to and
including three reporting lines from the CEO
** Full-time equivalent
At year-end 2017, women made up more than 35% of the members
of the RELX Boards. The two Executive Directors on the Boards
are male. The Nominations Committee considers the knowledge,
experience and background of individual Board directors.
Our Diversity and Inclusion (D&I) Statement articulates our
commitment to a diverse workforce and an environment that
respects individuals and their contributions, regardless of gender,
race or other characteristics. Our D&I Strategy is focused on
translating the Statement into practical action. Among its
commitments is maintaining a D&I Advisory Group composed of a
senior business and HR leader from each business unit, supported
by a broader D&I Working Group. We encourage more than 35
Employee Resource Groups (ERGs) across the Group, such as
women’s forums and pride groups, to facilitate support,
mentoring and community involvement.
In 2017, we expanded our women in technology mentoring
programme for mid-career women in technology across our four
business units to participants in the US as well as the UK. All
mentors are internal, and 44% of mentors are women in technology.
A webinar series for participants showcases the tech career
journeys of senior women, including members of the RELX Group
Boards, and is made available to all employees. Based on the
success of our women in technology mentoring, in the year,
we launched a mentoring programme for high potential women.
RELX Group is a signatory to the Women’s Empowerment
Principles (WEPs), a UNGC and UN Women initiative to help
companies empower women and promote gender equality.
In the year, we tested a WEPs benchmarking tool to understand
gaps between the principles and our performance.
Elsevier has attained the first level of the EDGE gender equality
certification, which involved employee surveys across eight
countries, an external review of policies and procedures and gender
pay benchmarking. An EDGE focus area is flexible working and in
2017, we mapped our flexible working policies across the business
as the first step in creating a RELX Group flexible working policy.
In addition, the RELX Tax team continued to engage with
policymakers and special interest groups on all sides of the debate
to provide practical experience on how companies interact with
tax laws and to suggest ways such laws can advance governments’
policy objectives.
The Statement of Investment Principles for the UK pension
scheme indicates that the extent to which social, environmental
or ethical issues may have a financial impact on the portfolio,
or a detrimental effect on the strength of the employer covenant,
is taken into account when making investment decisions.
CR issues are relevant to other investment decisions we make.
Among our sustainable investments is Agworld, a farm
management software platform that allows farmers, agronomists
and farm contractors to capture, manage and share on-farm data
and recommendations to improve the sustainability of land and
better yields.
2017 OBJECTIVES
Achievement
Expand fraud prevention
and cyber security
awareness efforts and
continue to tighten
related controls
§§ Continued programme of
technology controls, training,
reporting and investigations, with
employee simulations to reduce
susceptibility to phishing attacks
§§ Less than 4% susceptible on a
benchmark simulation (industry
average 21%)
More structured
approach to compliance
training for employees
in higher risk roles and
locations across the
Group
§§ Established resource library
containing 35 presentations
encompassing competition law
anti-bribery, culture of
compliance, harassment, trade
sanctions and management
§§ More than 2,400 employees
received advanced in-person
compliance training conducted by
RELX Compliance in collaboration
with business unit leads
§§ Tax Principles refreshed and
incorporated into tax strategy
published on RELX Group website
§§ Briefings for key internal
stakeholders; roll-out of interactive
training underway
Broaden awareness
of RELX Tax
Principles in external
communications, with
internal training for
relevant staff
2018 OBJECTIVES
§§ Expand corporate security incident response preparedness
using a combination of technology, awareness training and
simulations
§§ Establish risk mitigation framework for monitoring
operational effectiveness of key internal compliance controls
§§ Engagement on rule of tax law
OUR 2030 VISION
Undertake consistent actions that reinforce excellence in
corporate governance, data privacy and security, and compliance
with all applicable legislation and our principles and policies
Business review Corporate Responsibility
47
We comply with all employee-related reporting requirements.
From 2018, this will include the new UK requirement to publish
our UK gender pay gap data.
In 2017, we conducted pulse surveys across the business to hear
from employees about how we are doing to make RELX Group a
great place to work.
Our employees have the right to a healthy and safe workplace,
as outlined in our Global Health and Safety Policy. We concentrate
on areas of greatest risk for example, warehouses, events and
exhibitions. As a primarily office-based company, we also focus
on manual handling, slips, trips and falls. To reduce our severity
rate (lost days per 200,000 hours worked), we conduct risk
assessments and work with a third party in the US to assign
a nurse case manager to each complex or severe claim. There
were 17 lost time reportable cases in the year.
In the US, where we have the largest concentration of employees,
the CareConnect and REACH programmes promote workplace
well-being through health screenings, online assessments,
stress awareness training and smoking cessation courses, with
financial incentives for participation.
Our annual Fit2Win global well-being competition encourages
employees to establish fitness teams to compete for cash prizes
for charities of their choice. Across the Group, 106 teams took
part and ran, walked, cycled and swam a total of 93,457 miles
(150,405 km), to win $1,000 for the charity of their choice.
Dedicated health and well-being programmes are now available
to more than 19,000 employees around the world, equating to over
60% of our employees. We also maintain a network of more than
90 Wellness Champions. We introduced a workplace well-being
award scheme which allows all employees, in partnership with
their local Wellbeing Champion, to submit a proposal for a
wellbeing initiative at their location. The proposals are judged
with the winning proposals granted funding.
2017 OBJECTIVES
Achievement
Scale women in
technology mentoring
programme; mentor pilot
for high-potential women
§§ New cohort of 27 mid-career
women in tech mentees and
27 tech mentors from US, UK
and China (16 mentors/mentees
in 2017)
Enhance flexible working
policies
§§ Mentoring programme for
high-potential women
co-sponsored by two senior
female leaders: RELX Group
Global HR Director and Reed
Exhibitions’ EMEA President
§§ Mapping of flexible working
policies across all business units
to understand policies and
tracking in place
§§ Flexible working case studies
highlighted on global intranet
Introduce a workplace
well-being award scheme
§§ 60 applications received for
wellness project funding
§§ Review by RELX Group Wellness
Champions
2018 OBJECTIVES
§§ Conduct a Global Employee Opinion Survey including
questions on culture, ethics and well-being
§§ Update D&I Strategy including launch of D&I progress
indicators
§§ External partnership to raise awareness of mental health
across RELX Group
OUR 2030 VISION
Respect the human rights of all our employees, with a focus
on talent development, diversity and inclusion and well-being,
to ensure a high-performing and satisfied workforce.
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RELX Group Annual reports and financial statements 2017
Gender:
in the Global Research
Landscape
In 2017, Elsevier released Gender in the Global Research Landscape, providing
insight and guidance on gender research and policy for governments, funders and
institutions worldwide. It covers 20 years, 12 geographies and 27 subject areas.
Download Gender in the Global Research Landscape at elsevier.com/genderreport
The report uncovers progress between 1996 and 2000, among
the 12 countries and regions studied, only Portugal had a women
researcher population greater than 40%; by the period 2011–2015,
there were nine countries and regions with 40% or more.
The study leverages the power of Elsevier’s Scopus citation
database and SciVal research performance tool, among other
sources, including input from the World Intellectual Property
Organization. It shows the global share of women inventors listed
in patent applications increased between 1996-2000 (10%) and
2011-2015 (14%), yet women remain strongly underrepresented
across all intellectual property comparators. The report is
available for free download worldwide.
Gender in a Global Research Landscape brings
empirical insight to gender disparity. It is data
that can be used by those – including researchers
and policy makers – working on issues critical
to science.
Dr. Holly J. Falk-Krzesinski
Vice President , Research Intelligence, Global
Strategic Networks, Elsevier
25%
less than 25% of
researchers in physical
sciences are women
Business review Corporate Responsibility
49
4. Customers
2017 OBJECTIVES
Achievement
In 2017, we surveyed approximately 450,000 customers through
Net Promoter Score (measuring customer advocacy) and
business dashboard programmes. This allows us to deepen
our understanding of customer needs and drives improvements.
Results are reviewed by the CEO and senior operational managers
and communicated to staff. To aid colleagues, during the year our
CR as a Sales Tool Working Group produced short videos on the
competitive advantage of our CR focus, with role plays showcasing
how to engage customers on CR issues, helping build deeper
relationships through discussion of shared values.
Our 2017 CR Forum Stakeholder Session, Truth and Trust and
Reliable Content, engaged members of our CR Forum, Editorial
Policy Working Group employees, peers and sector stakeholders
for a practical discussion on this key issue for RELX Group.
Participant Charlie Beckett, founding director of POLIS, the
think-tank for research and debate in international journalism
and society at the London School of Economics noted, "it is entirely
the responsibility of anybody who produces information, not just
journalists, but governments and corporations, to make their
information intelligible, accessible and critically accountable.”
The event was simulcast for employees and made available for
download on the RELX Group global intranet.
We advanced our Quality First Principles (QFPs) in the year to
include more areas of the business including supplier management
and customer support. In 2017, we applied for a Philippines Quality
Award which involved demonstrating excellence in managing and
delivering quality throughout the business.
We are committed to improving access to our products and services
for all users, regardless of physical ability. Our Accessibility Policy
aims to lead the industry in providing accessibility solutions to
customers, with products that are operable, understandable and
robust. In 2017, members of the Accessibility Working Group logged
over 200 accessibility projects and Elsevier’s Global Books Digital
Archive fulfilled more than 5,000 disability requests, 77% of them
through AccessText.org, a service we helped establish.
In the year, to improve our reporting on compliance with customer
accessibility requests, we refined our accessibility review toolkit
to include product scorecards with ratings on process maturity,
fix lists, customer inquiries and revenue at stake.
Pursue Philippine
Quality Award (PQA) as
a demonstration of drive
for quality excellence
Create role plays for
sales staff showing CR
as a Sales Tool in action
Improve reporting
on compliance with
customer accessibility
requests
§§ Application submitted; PQA site
visit following; decision in 2018
§§ CR as a Sales Tool video featuring
colleagues across RELX Group
§§ Created CR at RELX Group desk
drop; guidance to sales colleagues
on fostering CR dialogue with
customers
§§ New accessibility report breaks
down customer Voluntary Product
Accessibility Template (VPAT),
showing alignment with each
criteria of Section 508 Standards of
the US Workforce Rehabilitation Act
2018 OBJECTIVES
§§ RELX Group Editorial Policy update and training
§§ New CR as a Sales Tool curriculum: Customers and the SDGs
§§ Introduce RELX Group Accessibility awards to recognise
exceptional employee efforts to advance accessibility
OUR 2030 VISION
Increase our customer base across our four business units
through provision of critical products, services and events,
with active listening and engagement, and a focus on editorial
and quality standards and accessibility.
5. Community
RE Cares, our global community programme, supports employee
volunteering and giving that makes a positive impact on society.
In addition to local initiatives of importance to employees, the
programme’s core focus is on education for disadvantaged young
people that advances one or more of our unique contributions as
a business. Staff have up to two days’ paid leave per year for their
own community work. We donated £3.4m in cash (including
through matching gifts) and the equivalent of £9.2m in products,
services and staff time in 2017. 45% of employees were engaged
in volunteering through RE Cares and we reached more than
24,000 disadvantaged young people through time, in-kind and
cash donations. In 2017, we increased skills-based volunteering,
as defined as "applying business knowledge and expertise to
benefit communities”. For example, colleagues at Risk & Business
Analytics built the Global Business Coalition for Education’s Rapid
Education Action (REACT) database to record private sector
educational contributions and assets that can be deployed quickly
in an emergency.
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RELX Group Annual reports and financial statements 2017
5. Community (continued)
A network of over 220 RE Cares Champions ensures the vibrancy
of our community engagement. In 2017, 72% of our offices across
the world had an RE Cares Champion.
Each September, we hold RE Cares Month to celebrate our
community commitment. During the Month, we raised funds
($96,700 to date) to help global fundraising partner, SOS Children’s
Villages, enable girls working in dangerous conditions in
Yamoussoukro, Ivory Coast to pursue an education. We held our
annual global book drive, yielding over 6,600 books for local and
developing world readers, and announced the winners of the
seventh Recognising Those Who Care Awards to highlight the
exceptional contributions to RE Cares of ten individuals and four
RE Cares teams. Individual winners from across the business
travelled to our office in Durban, South Africa to work with several
local charities with a focus on anti-human trafficking, including
survivor rehabilitation. The trip has been led since its inception
by senior leader Youngsuk “YS” Chi, Director of Corporate Affairs.
2017 OBJECTIVES
Achievement
Ensure at least 60% of
offices have an RE Cares
Champion
Increase skills-based
volunteering
§§ 72% of offices have an RE Cares
Champion
§§ Expansion to new locations
including Russia, South Korea,
Taiwan and the UAE
§§ Six percentage point increase
§§ 34% of RE Cares Champions
organised at least one skills-
based volunteer event vs. 28%
in 2016
2018 OBJECTIVES
§§ Foster development of youth employability skills
§§ Research impact of RE Cares on staff retention
OUR 2030 VISION
Use our unique contributions to advance education for
disadvantaged young people, tracking the impact on our
communities near and far.
6. Supply chain
We require our suppliers to meet the high standards we set for
ourselves. Our Supplier Code of Conduct stipulates adherence to
all laws and best practice in areas such as human rights, labour
and the environment. Through our Socially Responsible Supplier
(SRS) database, in 2017 we tracked 344 key suppliers and those
located in high-risk countries as designated by our Supplier Risk
Tool incorporating eight indicators, including human trafficking
information from the US State Department and Environmental
Performance Index results produced by Yale University and
partners. The tracking list changes year-on-year based on the
number of suppliers we do business with who meet the required
criteria. We ended 2017 with 91% of suppliers on the SRS tracking
list as signatories to the Supplier Code vs. 89% in 2016. We have
embedded signing the Supplier Code into our sourcing process
as a criterion for doing business with us, and have an additional
2,624 suppliers not on the SRS tracking list who have signed the
Supplier Code.
Specialist supply chain auditors, Intertek, undertook 83 external
audits of suppliers as part of their comprehensive Workplace
Conditions Assessment and Corrective and Preventative Actions
programme. Any incidence of non-compliance identified in the
audit process triggers a corrective action plan agreed with the
supplier, with remediation required on all issues.
The roll-out of our US Supplier Diversity programme continued
in 2017 with efforts to improve the mix of diverse suppliers.
Our focus was on minority, woman, and veteran-owned
businesses and in 2017, resulting in an 8% increase in spend
with suppliers in these categories. Overall, 11.4% of total US
spend was with diverse suppliers.
2017 OBJECTIVES
Achievement
Increase number of
suppliers as Code
signatories
Continue using Corrective
and Preventative Actions
tool to ensure continuous
improvement in audit
results
Continue to advance US
Supplier Diversity and
Inclusion programme
§§ 91% on tracking list versus 89%
in 2016
§§ 83 audits completed
§§ Minority, woman, and veteran-
owned spend increased by 8%
§§ Spend with diverse suppliers
was 11.4% of total US spend
2018 OBJECTIVES
§§ Increase number of suppliers as Code signatories
§§ Continue using audits to ensure continuous improvement
in supplier performance and compliance
§§ Continue to advance the US Supplier Diversity and Inclusion
programme
OUR 2030 VISION
Reduce supply chain risks related to human rights, labour,
the environment and anti-bribery by ensuring adherence to
our Supplier Code of Conduct through training, auditing and
remediation; drive supply chain innovation, quality and
efficiencies through a strong and diverse network of suppliers.
Business review Corporate Responsibility
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7. Environment
Our environmental targets, reflecting our impact, with
input from stakeholders, can be found along with full
performance data in the 2017 Corporate Responsibility Report
at www.relx.com/go/CRReport. Targets are science-based,
and include a commitment to certify 50% of the business
against the ISO 14001 environmental management system
standard by 2020. In 2017, we purchased 72% of our electricity
from renewable energy and Renewable Energy Certificates.
We attained A-, in CDP’s Climate Change programme.
Our Environmental Champions network, employee-led Green
Teams and networks such as the Publishers’ Database for
Responsible Environmental Paper Sourcing provide significant
insight into managing our environmental impacts. Our
Environmental Standards programme sets benchmark
performance and inspires green competition between offices.
In 2017, 37 sites (36% of key locations) achieved five or more
standards and attained green status. On World Environment Day,
the Chief Financial Officer wrote to all staff to share these results
and to recognise the achievements of Green Heroes from across
the Group chosen by peers for their environmental efforts.
In addition, Green Teams submitted environmental engagement
ideas and winners received funding to carry out their plans.
We have a positive environmental impact through our
environmental products and services, which spread good
practice, encourage debate and aid researchers and decision
makers. The most recent results from the independent Market
Analysis System show that our share of citations in environmental
science represented 40% of the total market, and 65% in energy
and fuels. The winner of Elsevier’s 2017 Green and Sustainable
Chemistry Challenge was Dr. Dênis Pires de Lima from the
Federal University of Mato Grosso do Sul in Brazil for his project
using natural waste from locally sourced cashew nuts and castor
oil to produce environmentally friendly insecticides against
mosquitoes carrying Zika and Dengue fever, a sustainable
alternative to conventional toxic insecticides.
2017 OBJECTIVES
Achievement
35% of locations to achieve
five or more new Group
Environmental Standards
§§ 36% of locations achieved five
or more standards
Purchase renewable
electricity equal to 70%
of Global consumption
§§ Achieved through purchase of
European green tariff, green-e
certified US RECs and Gold Power
Achieve ISO 14001
Environmental
Management System
certification at three
additional locations
2018 OBJECTIVES
§§ Achieved at three additional
locations in the UK and US,
total coverage of the ISO 14001
certified system is now 19%
by headcount
§§ Purchase renewable electricity equal to 80% of global
consumption
§§ 40% of locations to achieve five or more new Group
Environmental Standards
§§ Achieve ISO 14001 certification at an additional three
locations
OUR 2030 VISION
Meet long-range environmental targets that will contribute to
keeping global average climate warming to below two degrees
Celsius and help others do so through our environmental
content and services.
2017 ENVIRONMENTAL PERFORMANCE
Absolute performance
Intensity ratio
2017
8,231
variance
2016
3% 7,966
2017
1.12
variance
2016
-3% 1.16
84,590
-8% 91,913
11.50
-14% 13.33
21,831
-32% 32,153
2.97
-36% 4.66
186,228
-5% 195,556
25.32
-11% 28.36
344,918
2% 337,889
24% 0 %pts
46.90
24% 0.22
-4% 49.00
-12% 0.25
36,484
-21% 46,128
4.96
-26% 6.69
Scope 1 (direct
emissions) tCO2e
Scope 2
(location-based
emissions) tCO2e
Scope 2
(market-based
emissions) tCO2e
Total energy
(MWh)
Water (m3)
Waste sent to
landfill (%)*
Production
paper (t)
* Intensity metric shows tonnes of waste sent to landfill/ £m revenue
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RELX Group Annual reports and financial statements 2017
7. Environment (continued)
ENVIRONMENTAL TARGETS
Focus area
Climate change
Targets 2020
Reduce Scope 1 and 2 location based carbon emissions by 40% against a 2010 baseline
Energy
Reduce energy and fuel consumption by 30% against a 2010 baseline
Purchase renewable electricity equivalent to 100% of RELX Group's global electricity consumption
Waste
Decrease total waste generated at reporting locations by 40% against a 2010 baseline
90% of waste from reporting locations to be diverted from landfill
Production paper* 100% of RELX Group production papers, graded in PREPS, to be rated as ‘known and
responsible sources’
Achieve ISO 14001 certification for 50% of the business by 2020
Environmental
Management
System
2017
performance
-42%
-32%
72%
-47%
87%
100%
19%
* All paper we graded in 2017 - 90% of total production stock - was graded 3 or 5 stars (known and responsible sources).
We have reported on all emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. We have included
emissions from all operating companies within the Group.
We have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) and the data has been assured by an independent third party, EY.
Details on methodology and the assurance statement can be viewed in the 2017 Corporate Responsibility Report at www.relx.com/go/CRReport.
2017 investor and other recognition
Constituent of the Ethibel
Sustainability Index
Included in
– Excellence Europe
– Excellence Global
CDP
– Climate programme score: A-
– Forest programme score: A-
– Water programme score: B
EPA Green Power Leader
– Top 100
FTSE4Good Index
Included in
– FTSE4Good Global Index
– FTSE4Good UK Index
– FTSE4Good Europe Index
RE100
– member
Euronext Vigeo
– UK 20
– Benelux 20
– Eurozone 120 – Europe 120
ISO 14001
– certified
STOXX Global ESG
Leaders Indices
– included
ECPI Indices
– included
SEAL award for Business
Sustainability
– 2017 winner for
Organisational Impact
Oekom Corporate
Responsibility Rating
– Prime status
Corporate Responsibility
Reporting Awards ’17
– Top 10 Best Corporate
Responsibility Report
– Top 10 Best Carbon
Reporting
The full 2017 Corporate Responsibility Report is available at www.relx.com/go/crreport
Financial review
53
Financial
review
In this section
54 Chief Financial Officer’s report
60 Principal risks
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54
RELX Group Annual reports and financial statements 2017
Chief Financial Officer’s report
Revenue
Underlying growth of revenue was 4%, with all four market
segments contributing to underlying growth. The underlying
growth rate reflects good growth in electronic and face-to-face
revenues, partially offset by continued print revenue declines.
Reported revenue, including the effects of exhibition cycling,
portfolio changes and currency movements, was £7,355m
(2016: £6,895m), up 7%.
Exhibition cycling effects reduced revenue growth by 1%, and
the net impact of acquisitions and disposals reduced revenue
growth by 1%. The impact of currency movements was to
increase revenue by 5%, principally due to the US dollar and
euro being stronger against sterling on average during 2017.
Nick Luff
Chief Financial Officer
In 2017 we maintained the trends
in financial performance seen
in 2016. Underlying revenue and
adjusted operating profit growth
were 4% and 6% respectively.
The capital structure of the Group
continues to be managed to
increase long-term shareholder
value whilst maintaining
appropriate leverage. Our balance
sheet remains strong, with Return
on Invested Capital of 13.1%.
Profit
Underlying adjusted operating profit grew ahead of revenue at 6%,
reflecting the benefit of tight cost control across the Group.
Total adjusted operating profit, including the impact of
acquisitions and disposals and currency effects, was £2,284m
(2016: £2,114m), up 8%.
Acquisitions and disposals decreased adjusted operating profit
by 3%. Currency effects increased adjusted operating profit by 5%,
in line with the impact on revenue.
Underlying operating cost growth was 2%, reflecting investment
in global technology platforms and the launch of new products
and services, partly offset by continued process innovation.
Actions continue to be taken across our businesses to improve
cost-efficiency. Total operating costs, including the impact of
acquisitions, disposals and currency effects, increased by 6%.
The overall adjusted operating margin of 31.1% was 0.4 percentage
points higher than in the prior year. On an underlying basis,
including cycling effects, the margin improved by 0.7 percentage
points. Acquisitions and disposals reduced the margin by 0.4
percentage points and currency effects increased the margin
by 0.1 percentage points.
Reported operating profit, after amortisation of acquired
intangible assets and acquisition-related costs, was £1,905m
(2016: £1,708m).
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
6,035
5,773
5,971
6,895
7,355
1,749
1,739
1,822
2,114
2,284
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
Financial review Chief Financial Officer’s report
55
Reported figures
Revenue
Operating profit
Profit before tax
Net profit attributable to RELX PLC and RELX NV shareholders
Net margin
Net borrowings
Earnings per share
Adjusted figures
Operating profit
Operating margin
Profit before tax
Net profit attributable to RELX PLC and RELX NV shareholders
Net margin
Cash flow
Cash flow conversion
Return on invested capital
Earnings per share
2017
£m
2016
£m
Change
Change
at constant
currencies
Change
underlying
7,355
1,905
1,734
1,659
22.6%
4,732
82.2p
2,284
31.1%
2,118
1,635
22.2%
2,192
96%
13.1%
81.0p
6,895
1,708
1,473
1,161
16.8%
4,700
56.3p
2,114
30.7%
1,934
1,488
21.6%
2,016
95%
13.0%
72.2p
2%
4%
3%
6%
7%
12%
18%
43%
46%
8%
10%
10%
9%
12%
7%
RELX Group uses adjusted and underlying figures as additional performance measures. Adjusted figures primarily exclude the amortisation of acquired intangible assets and
other items related to acquisitions and disposals, and the associated deferred tax movements. In 2017, we have excluded the exceptional tax credit arising as a result of the US
Tax Cuts and Jobs Act . Reconciliations between the reported and adjusted figures are set out on page 186. Underlying growth rates are calculated at constant currencies, and
exclude the results of all acquisitions and disposals made in both the year and prior year and of assets held for sale. Underlying revenue growth rates also exclude the effects
of exhibition cycling. Constant currency growth rates are based on 2016 full-year average and hedge exchange rates.
The amortisation charge in respect of acquired intangible assets,
including the share of amortisation in joint ventures, decreased
to £314m (2016: £346m), primarily reflecting certain assets
becoming fully amortised, partially offset by currency effects and
acquisitions. Acquisition-related costs were £56m (2016: £51m).
Adjusted interest expense, excluding the net pension financing
charge of £15m (2016: £14m) and including finance income in
joint ventures of £1m (2016: £1m), was £166m (2016: £180m).
The decrease primarily reflects a lower average interest rate
on borrowings, partly offset by currency translation effects.
Reported net finance costs were £182m (2016: £195m).
Net pre-tax disposal gains were £11m (2016: £40m loss) arising
largely from the sale of Risk & Business Analytics businesses
and revaluation of investments held. These gains are offset by
an associated tax charge of £16m (2016: £34m credit).
Adjusted profit before tax was £2,118m (2016: £1,934m), up 10%.
The reported profit before tax was £1,734m (2016: £1,473m).
The adjusted effective tax rate on adjusted profit before tax was
22.5%, 0.2 percentage points lower than the prior year rate of
22.7%. The adjusted effective tax rate excludes movements in
deferred taxation assets and liabilities related to goodwill and
acquired intangible assets, but includes the benefit of tax
amortisation where available on those items. Adjusted operating
profits and taxation are grossed up for the equity share of taxes
in joint ventures. The application of tax law and practice is subject
to some uncertainty and amounts are provided in respect of this.
Discussions with tax authorities relating to cross-border
transactions and other matters are ongoing. Although the
outcome of open items cannot be predicted, no significant impact
on profitability is expected.
ADJUSTED OPERATING PROFIT MARGIN
ADJUSTED CASH FLOW CONVERSION
29.0%
30.1%
30.5%
30.7%
31.1%
97%
96%
94%
95%
96%
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
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56
RELX Group Annual reports and financial statements 2017
The reported tax charge was £67m (2016: £304m). The decrease
in the tax charge is due to the US Tax Cuts and Jobs Act, which
includes a reduction in the federal corporate tax rate from 35% to
21% from January 2018. Consequently, the Group has measured
its US deferred tax assets and liabilities at the end of the reporting
period at a combined tax rate (including state taxes) of 26%. This
resulted in the recognition of an exceptional tax credit of £346m
in the income statement.
The adjusted net profit attributable to RELX PLC and RELX NV
shareholders of £1,635m (2016: £1,488m) was up 10%. Adjusted
earnings per share were up 12% at 81.0p (2016: 72.2p) when
expressed in sterling and 5% at €0.923 (2016: €0.880) when
expressed in euros. At constant rates of exchange, adjusted
earnings per share increased by 7%.
The reported net profit attributable to RELX PLC and RELX NV
shareholders was £1,659m (2016: £1,161m).
Cash flows
Adjusted cash flow was £2,192m (2016: £2,016m), up 9%
compared with the prior year and up 3% at constant currencies.
The rate of conversion of adjusted operating profit to adjusted
cash flow was 96% (2016: 95%).
Payments made in respect of acquisition-related costs amounted
to £42m (2016: £40m).
Free cash flow before dividends was £1,544m (2016: £1,414m).
Ordinary dividends paid to shareholders in the year, being the 2016
final and 2017 interim dividends, amounted to £762m (2016: £683m).
Free cash flow after dividends was £782m (2016: £731m).
RECONCILIATION OF CASH GENERATED FROM OPERATIONS
TO ADJUSTED CASH FLOW
YEAR TO 31 DECEMBER
Cash generated from operations
Dividends received from joint ventures
Purchases of property, plant and
equipment
Expenditure on internally developed
intangible assets
Payments in relation to acquisition-
related costs/other
Proceeds from disposals of property,
plant and equipment
Adjusted cash flow
FREE CASH FLOW
2017
£m
2,445
38
2016
£m
2,236
44
(51)
(51)
(303)
(282)
62
1
68
1
2,192
2,016
2017
£m
2,192
(148)
(472)
(28)
1,544
(762)
782
2016
£m
2,016
(152)
(423)
(27)
1,414
(683)
731
CONVERSION OF ADJUSTED OPERATING PROFIT INTO CASH
YEAR TO 31 DECEMBER
YEAR TO 31 DECEMBER
Adjusted operating profit
Capital expenditure
Depreciation and amortisation of internally
developed intangible assets
Working capital and other items
Adjusted cash flow
Cash flow conversion
2017
£m
2,284
(354)
272
(10)
2,192
96%
2016
£m
2,114
(333)
Adjusted cash flow
Interest paid (net)
Tax paid
Acquisition-related costs*
257
(22)
Free cash flow before dividends
Ordinary dividends
2,016
Free cash flow post dividends
95%
* Including cash tax relief.
Capital expenditure was £354m (2016: £333m), including
£303m (2016: £282m) in respect of capitalised development costs.
This reflects sustained investment in new products and related
infrastructure across the business. Depreciation and the
amortisation of internally developed intangible assets was
£272m (2016: £257m). Capital expenditure was 4.8% of revenue
(2016: 4.8%). Depreciation and amortisation was 3.7% of revenue
(2016: 3.7%).
Tax paid, excluding tax relief on acquisition-related costs and
on disposals, of £472m (2016: £423m) increased as a result of
improved profits and movements in exchange rates. Interest
paid was £148m (2016: £152m).
Total consideration on acquisitions completed in the year
was £123m (2016: £338m). Cash spent on acquisitions was
£141m (2016: £367m), including deferred consideration of
£13m (2016: £24m) on past acquisitions and spend on venture
capital investments of £10m (2016: £6m).
Total consideration for the disposal of non-strategic assets in 2017
was £87m (2016: £16m). Net cash inflow after timing differences and
separation and transaction costs was £34m (2016: £13m outflow).
Share repurchases by RELX PLC and RELX NV in 2017 were
£700m (2016: £700m), with a further £100m repurchased in 2018
as at 14 February. In addition, the Employee Benefit Trust
purchased shares of RELX PLC and RELX NV to meet future
obligations in respect of share based remuneration totalling
£39m (2016: £29m). Proceeds from the exercise of share options
were £32m (2016: £23m).
Financial review Chief Financial Officer’s report
57
RECONCILIATION OF NET DEBT YEAR-ON-YEAR
YEAR TO 31 DECEMBER
Net debt at 1 January
Free cash flow post dividends
Net disposal proceeds/(payments)
Acquisition cash spend
Share repurchases
Purchase of shares by the Employee
Benefit Trust
Other*
Currency translation
Movement in net debt
2017
£m
(4,700)
782
34
(141)
(700)
(39)
–
32
(32)
2016
£m
(3,782)
731
(13)
(367)
(700)
(29)
(31)
(509)
(918)
Net debt at 31 December
(4,732)
(4,700)
* Cash tax relief on disposals, distributions to non-controlling interests, pension
deficit payments, finance leases and share option exercise proceeds.
Funding
Debt
Gross borrowings at 31 December 2017 amounted to £4,886m
(2016: £4,843m). The fair value of related derivative net assets
was £43m (2016: net liabilities of £19m). Cash and cash equivalents
totalled £111m (2016: £162m). In aggregate, these give the net
borrowings figure of £4,732m (2016: £4,700m).
The effective interest rate on gross borrowings was 3.2% in 2017,
0.6 percentage points lower than the prior year, reflecting the
benefit of refinancing historical bonds that had higher rates of
interest. As at 31 December 2017, gross borrowings had a weighted
average life remaining of 4.6 years and a total of 44% of them were
at fixed rates, after taking into account interest rate derivatives.
The ratio of net debt to 12-month trailing EBITDA (adjusted
earnings before interest, tax, depreciation and amortisation)
was 1.9x (2016: 1.8x), calculated in US dollars. Incorporating the
capitalisation of operating leases and the net pension deficit, in
line with the approach taken by credit rating agencies, the ratio
was 2.2x (2016: 2.2x).
Liquidity
The Group has a $2.0bn committed bank facility, maturing in
July 2020, which provides security of funding for short-term debt.
At 31 December 2017, this facility was undrawn. In March 2017,
€1.0bn in total of euro denominated fixed rate term debt was
issued with coupons of 0.375% and 1.000% and maturities of
four years and seven years, respectively. The Group has ample
liquidity and access to debt capital markets, providing the ability
to repay or refinance borrowings as they mature and to fund
ongoing requirements.
Invested capital and returns
Net capital employed was £8,016m at 31 December 2017 (2016:
£8,484m), a reduction of £468m. The carrying value of goodwill
and acquired intangible assets decreased by £888m, reflecting
the weakening of the dollar against sterling from the beginning to
the end of 2017, partly offset by acquisitions. An amount of £56m
was capitalised in the year in respect of acquired intangible assets
and £77m was recorded as goodwill.
SUMMARY BALANCE SHEET
AS AT 31 DECEMBER
Goodwill and acquired intangible assets*
Internally developed intangible assets*
Property, plant and equipment* and
investments
Net assets held for sale
Net pension obligations
Working capital
Net capital employed
* Net of accumulated depreciation and amortisation.
2017
£m
8,023
1,136
452
–
(328)
(1,267)
2016
£m
8,911
1,085
481
1
(636)
(1,358)
8,016
8,484
RELX GROUP TERM DEBT MATURITIES AT 31 DECEMBER 2017
RETURN ON INVESTED CAPITAL
$m
282
993
806
661
601
902
819
601
150
200
7
12.1%
12.8%
12.7%
13.0%
13.1%
2018 2019 2020 2021 2022 2023 2024 2025
2026
2027 >2027
2013
2014
2015
2016
2017
Term debt translated at 31 December 2017 exchange rates, stated at par value
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58
RELX Group Annual reports and financial statements 2017
Development costs of £304m (2016: £280m) were capitalised
within internally developed intangible assets, most notably
investment in new products and related infrastructure in the
Legal and Scientific, Technical & Medical businesses.
Net pension obligations, i.e. pension obligations less pension
assets, decreased to £328m (2016: £636m). There was a net
deficit of £89m (2016: £393m) in respect of funded schemes,
which were on average 98% funded at the end of the year on
an IFRS basis. The lower deficit mainly reflects strong asset
performance in both the UK and the US schemes, and changes
to the UK scheme resulting in a £42m credit and a corresponding
reduction in the liability.
The post-tax return on average invested capital in the year was
13.1% (2016: 13.0%).
RETURN ON INVESTED CAPITAL
AS AT 31 DECEMBER
Adjusted operating profit
Tax at effective rate
Effective tax rate
Adjusted operating profit after tax
Average invested capital*
Return on invested capital
2017
£m
2,284
(514)
22.5%
1,770
13,501
13.1%
2016
£m
2,114
(480)
22.7%
1,634
12,538
13.0%
* Average of invested capital at the beginning and the end of the year, retranslated
at average exchange rates for the year. Invested capital is calculated as net capital
employed, adjusted to add back accumulated amortisation, impairment of acquired
intangible assets and goodwill and to exclude the gross up to goodwill in respect of
deferred tax.
Reported earnings per share and dividends
RELX PLC
Reported earnings per share
Ordinary dividend per share
2017
£m
82.2p
39.4p
2016
£m
56.3p
35.95p
Change
+46%
+10%
RELX NV
€m
€m
Change
Reported earnings per share
Ordinary dividend per share
€0.936
€0.448
€0.687
€0.423
+36%
+6%
The reported earnings per share for RELX PLC was 82.2p (2016:
56.3p) and for RELX NV was €0.936 (2016: €0.687). The high
growth in the year reflects the impact of the exceptional tax credit
recognised as a result of the US Tax Cuts and Jobs Act.
The final dividends proposed by the respective Boards are 27.7p
per share for RELX PLC and €0.316 per share for RELX NV, 8% and
5% higher respectively compared with the prior year final dividends.
This gives total dividends for the year of 39.4p (2016: 35.95p) and
€0.448 (2016: €0.423). The difference in growth rates in the final
dividends reflects changes in the euro:sterling exchange rate
since the prior year final dividend announcement date.
Dividend cover, based on adjusted earnings per share and the total
interim and proposed final dividends for the year, is 2.1x. The
dividend policy of RELX PLC and RELX NV is, subject to currency
considerations, to grow dividends broadly in line with adjusted
earnings per share while maintaining dividend cover (being the
number of times the annual dividend is covered by the adjusted
earnings per share) of at least two times over the longer term.
During 2017, a total of 44.5m RELX PLC and RELX NV shares were
repurchased. Total consideration for these repurchases was
£700m. A further 1.2m RELX PLC shares and 1.3m RELX NV
shares were purchased by the Employee Benefit Trust. During
2017, 22.5m RELX PLC and 22m RELX NV shares held in treasury
were cancelled. As at 31 December 2017, total shares in issue for
RELX Group, net of shares held in treasury and shares held by the
Employee Benefit Trust, amounted to 2,004m; represented by
1,060m RELX PLC shares and 944m RELX NV shares. A further
3.3m RELX PLC shares and 2.9m RELX NV shares have been
repurchased in 2018 as at 14 February.
Distributable reserves
As at 31 December 2017, RELX PLC and RELX NV each had
distributable reserves of over £1.5bn (€1.7bn). In line with
respective legislation in the UK and the Netherlands, distributable
reserves are derived from the non-consolidated RELX PLC and
RELX NV balance sheets. The consolidated Group reserves reflect
adjustments such as the amortisation of acquired intangible
assets that are not taken into account when calculating
distributable reserves.
Further information on the distributable reserves of RELX PLC
and RELX NV can be found in the parent company financial
statements on pages 173 and 180 respectively.
Alternative performance measures
The Group uses adjusted figures, which are not defined by
generally accepted accounting principles (“GAAP”) such as IFRS.
Adjusted figures and underlying growth rates are presented as
additional performance measures used by management, as they
provide relevant information in assessing the Group’s performance,
position and cash flows. We believe that these measures enable
investors to more clearly track the core operational performance
of the Group, by separating out items of income or expenditure
relating to acquisitions, disposals and capital items, while
providing our investors with a clear basis for assessing our ability
to raise debt and invest in new business opportunities. In 2017, we
have excluded the exceptional tax credit arising as a result of the
US Tax Cuts and Jobs Act from our adjusted measures.
Our management uses these financial measures, along with IFRS
financial measures, in evaluating the operating performance of
the Group as a whole and the individual business segments.
Adjusted financial measures should not be considered in isolation
from, or as a substitute for, financial information presented in
compliance with IFRS. The measures may not be directly
comparable to similarly reported measures by other companies.
Please see page 186 for reconciliations of adjusted measures.
Financial review Chief Financial Officer’s report
59
Accounting policies
Capital and liquidity management
The consolidated financial statements are prepared in accordance
with International Financial Reporting Standards as adopted
by the European Union and as issued by the International
Accounting Standards Board following the accounting policies
shown in the notes to the financial statements on pages 122 to 164.
The accounting policies and estimates which require the most
significant judgement relate to the valuation of goodwill and
intangible assets, the capitalisation of development costs,
taxation and accounting for defined benefit pension schemes.
Further detail is provided in the accounting policies on pages 122
and 123 and in the relevant notes to the accounts.
New accounting standards
RELX Group will adopt IFRS 9, 15 and 16 from 1 January 2018.
For IFRS 16 this is one year earlier than its mandatory adoption
date. Please see note 1 to the consolidated financial statements
for further details on the impact of these new standards.
Tax principles
Taxation is an important issue for us and our stakeholders,
including our shareholders, governments, customers, suppliers,
employees and the broader, global communities in which we
operate. We have set out our approach to tax in our global tax
strategy. This incorporates our Tax Principles along with
additional disclosures around where we pay taxes and our broader
contribution to society. This is all made publicly available on our
website: (www.relx.com/go/TaxPrinciples).
We maintain an open dialogue with tax authorities, and are vigilant
in ensuring that we comply with current tax legislation. We have
clear and consistent tax policies and tax matters are dealt with by
a professional tax function, supported by external advisers. We
proactively seek to agree arm’s length pricing with tax authorities
to mitigate tax risks of significant cross-border operations. We
actively engage with policy makers, tax administrators, industry
bodies and international institutions to provide informed input on
proposed tax measures, so that we and they can understand how
those proposals would affect our businesses. In addition, we
participate in consultations with the Organisation for Economic
Co-operation and Development (“OECD”), European bodies and
the United Nations.
Treasury policies
The Boards of RELX PLC, RELX NV and RELX Group plc agree
policies for managing treasury risks. The key policies address
security of funding requirements, the target fixed/floating
interest rate exposure for debt and foreign currency hedging
and place limits on counterparty exposures. A more extensive
summary of these policies is provided in note 19 to the financial
statements on pages 147 to 152. Financial instruments are used
to finance the RELX Group businesses and to hedge transactions.
The Group’s businesses do not enter into speculative transactions.
The capital structure is managed to support the Group’s objective
of maximising long-term shareholder value through appropriate
security of funding, ready access to debt and capital markets,
cost-effective borrowing and flexibility to fund business and
acquisition opportunities while maintaining appropriate leverage
to ensure an efficient capital structure.
Over the long-term, the Group seeks to maintain cash flow
conversion of 90% or higher and credit rating agency metrics
that are consistent with a solid investment grade credit rating.
These metrics as defined by the rating agencies include net debt
to EBITDA, on a pensions and lease adjusted and on an unadjusted
basis, and various measures of cash flow as a percentage of
net debt.
The Group’s uses of free cash flow over the longer term balance
the dividend policy, selective acquisitions and share repurchases,
while retaining the balance sheet strength to maintain access
to cost-effective sources of borrowing. Further detail on the
Group’s capital and liquidity management is provided on pages 147
and 148.
Corporate responsibility
We work to minimise any negative environmental impact of
conducting our business, not least by continuing to expand our
purchase of renewable energy, which equated to 72% of our
global electricity consumption in 2017.
We also achieved our goal of having 35% of our reporting locations
achieve green status by meeting five or more of our environmental
standards, which set target energy and water usage and waste
levels per person. In the year, three additional locations gained
ISO 14001 Environmental Management System certification.
We make a positive environmental impact through our products
and services which inform environmental debate, aid decision
makers and encourage research and development. In 2017, this
included more than 100 environmental sciences journals and
shows like World Efficiency Solutions, which allows environmental
innovators to meet business and government representatives,
among others, seeking environmental solutions.
Our Green Teams, local level environmental networks,
representing nearly 19,000 colleagues across the business,
advance environmental good practice. In 2017, I chaired regular
Environmental Checkpoint meetings to track progress against
our environmental objectives. I highlighted our environmental
targets and performance in an email to all staff globally on
World Environment Day in June.
Nick Luff
Chief Financial Officer
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RELX Group Annual reports and financial statements 2017
Principal risks
The Group has established risk management practices that are
embedded into the operations of the businesses, based on the
Internal Control-Integrated Framework (2013) by the Committee
of Sponsoring Organisations of the Treadway Commission
(COSO). The principal risks facing the business, which have been
assessed by the Audit Committees and Boards, are described
below. The Directors confirm this process is robust and includes
consideration of risks, including long-term systemic risks and
risks arising from the impact the Group has on external parties,
that could threaten the Group’s business models, future
performance, solvency or liquidity. It is not possible to identify
every risk that could affect our businesses, and the actions taken
to mitigate the risks described below cannot provide absolute
assurance that a risk will not materialise and/or adversely affect
our business or financial performance. Our risk management
and internal control processes are described in the Corporate
Governance section. A description of the business and a
discussion of factors affecting performance is set out in the
Chief Executive Officer’s report and the Business Review.
Treasury risks are further discussed in the Chief Financial
Officer’s report and in note 19 to the consolidated financial
statements. Our approach to managing environmental and other
non-financial risks is set out in the Business Review and the
separate Corporate Responsibility Report.
EXTERNAL RISKS
Risk
Economy
and market
conditions
Intellectual
property rights
Data resources
Paid
subscriptions
Description and impact
Mitigation
Demand for our products and services may be adversely
impacted by factors beyond our control, such as the
economic environment in the United States, Europe and
other major economies, political uncertainties (including
the potential consequences of the United Kingdom’s
withdrawal from the European Union under Article 50 of
the Treaty of Lisbon), acts of war, terrorism and civil unrest
as well as levels of government and private funding provided
to academic and research institutions.
Our products and services include and utilise intellectual
property. We rely on trademark, copyright, patent and
other intellectual property laws to establish and protect
our proprietary rights in this intellectual property. There
is a risk that our proprietary rights could be challenged,
limited, invalidated or circumvented, which may impact
demand for and pricing of our products and services.
Copyright laws are subject to national legislative initiatives,
as well as cross border initiatives such as those from the
European Commission, and increased judicial scrutiny
in several jurisdictions in which we operate. This creates
additional challenges for us in protecting our proprietary
rights in content delivered through the internet and
electronic platforms.
A number of our businesses rely extensively upon content
and data from external sources. Data is obtained from
public records, governmental authorities, customers
and other information companies, including competitors.
Legal regulations, such as the European Union’s General
Data Protection Regulation (“GDPR”), relating to internet
communications, privacy and data protection, e-commerce,
information governance and use of public records, are
becoming more prevalent worldwide. The disruption or
loss of data sources, either because of changes in the law
or because data suppliers decide not to supply them, may
impose limits on our collection and use of certain kinds of
information about individuals and our ability to communicate
such information effectively with our customers.
Our Scientific, Technical & Medical (STM) primary research
content, like that of most of our competitors, is sold largely
on a paid subscription basis. There is continued debate in
government, academic and library communities, which
are the principal customers for our STM content, regarding
to what extent such content should be funded instead
through fees charged to authors or authors’ funders
and/or made freely available in some form after a period
following publication. Some of these methods, if widely
adopted, could adversely affect our STM revenue from
paid subscriptions.
Our businesses are focused on professional markets
which have generally been more resilient in periods of
economic downturn. We deliver information solutions,
many on a subscription basis, which are important to
our customers’ effectiveness and efficiency. We have
extended our position in long-term global growth
markets through organic new launches supported by the
selective acquisition of content and data sets. We continue
to dispose of businesses that no longer fit our strategy.
We continuously monitor economic and political
developments to assess their impact on our strategy
which is designed to mitigate these risks.
We actively engage in developing and promoting the
legal protection of intellectual property rights. Our
subscription contracts with customers contain provisions
regarding the use of proprietary content. We are vigilant
as to the use of our intellectual property and, as
appropriate, take legal action to challenge illegal content
distribution sources.
We seek as far as possible to have proprietary content.
Where content is supplied to us by third parties, we aim to
have contracts which provide mutual commercial benefit.
We also maintain an active dialogue with regulatory
authorities on privacy and other data related issues,
and promote, with others, the responsible use of data.
We have a global privacy programme in place, designed
to comply with applicable privacy regulations including
GDPR, which applies from 25 May 2018.
We engage extensively with stakeholders in the STM
community to better understand their needs and deliver
value to them. We are open to serving the STM community
under any payment model that can sustainably provide
researchers with the critical information tools that they
need. We focus on the integrity and quality of research
through the editorial and peer review process; we invest
in efficient editorial and distribution platforms and in
innovation in platforms and tools to make content and
data more accessible and actionable; and we ensure
vigilance on plagiarism and the long-term preservation
of research findings.
Financial review Principal risks
61
STRATEGIC RISKS
Risk
Customer
acceptance
of products
Competition
Acquisitions
OPERATIONAL RISKS
Risk
Technology
failure
Cyber security
Description and impact
Mitigation
Our businesses are dependent on the continued acceptance
by our customers of our products and services and the value
placed on them. Failure to meet evolving customer needs
could impact demand for our products and services and
consequently adversely affect our revenue or the long-term
returns from our investment in electronic product and
platform initiatives.
Our businesses operate in highly competitive markets, and
the means of delivering our products and services, and the
products and services themselves, continue to change in
response to rapid technological innovations, legislative and
regulatory changes, the entrance of new competitors and
other factors. Failure to anticipate and quickly adapt to these
changes could impact the competitiveness of our products
and services and consequently adversely affect our revenue.
We supplement our organic development with selected
acquisitions. If we are unable to generate the anticipated
benefits such as revenue growth and/or cost savings
associated with these acquisitions this could adversely affect
return on invested capital and financial condition, or lead to
an impairment of goodwill.
We are focused on the needs and economics of our
customers. We leverage user centred design and
development methods and customer analytics and invest
in new and enhanced technologies to provide content and
innovative solutions that help them achieve better
outcomes and enhance productivity.
We gain insights into our markets, evolving customers’
needs, the potential application of new technologies and
business models, and the actions of competitors. These
insights inform our market strategies and operational
priorities. We continuously invest significant resources
in our products and services, and the infrastructure to
support them.
Acquisitions are made within the framework of our
overall strategy, which emphasises organic development.
We have a well formulated process for reviewing and
executing acquisitions and for managing the post-
acquisition integration. This process is underpinned with
clear strategic, financial and ethical criteria. We closely
monitor the integration and performance of acquisitions.
Description and impact
Mitigation
Our businesses are dependent on electronic platforms and
networks, primarily the internet, for delivery of our products
and services. These could be adversely affected if our
electronic delivery platforms or networks experience
a significant failure, interruption or security breach.
We have established procedures for the protection of our
technology assets. These include the development of
business continuity plans, including IT disaster recovery
plans and back-up delivery systems, to reduce business
disruption in the event of a major technology failure.
Our businesses maintain online databases and information,
including public records and other personal information.
As part of maintaining this information and delivering
our products and services, we rely on and provide data to
third parties, including customers and service providers.
These databases and information are a target for compromise
and face a risk of unauthorised access and use by
unauthorised parties.
Our cyber security measures, and the measures used by
our third-party service providers, may not detect or prevent
all attempts to compromise our systems, which may
jeopardise the security of the data we maintain or may
disrupt our systems. Failures of our cyber security measures
could result in unauthorised access to our systems,
misappropriation of our or our users’ data, deletion or
modification of stored information or other interruption
to our business operations. As techniques used to obtain
unauthorised access to or to sabotage systems change
frequently, and may not be known until launched against
us or our third-party service providers, we may be unable
to anticipate or implement adequate measures to protect
against these attacks and our service providers and
customers may likewise be unable to do so.
Compromises of our or our third-party service providers’
systems, or failure to comply with applicable legislation
or regulatory or contractual requirements could adversely
affect our financial performance, damage our reputation
and expose us to risk of loss, fines and penalties, litigation
and increased regulation.
We have established data privacy and security
programmes with the aim of ensuring that data is
protected and that we comply with relevant legislative,
regulatory and contractual requirements.
We have governance mechanisms in place to design
and monitor common policies and standards across
our businesses.
We invest in appropriate administrative, technical and
physical controls which are applied across the enterprise
in a risk based security programme which operates at the
infrastructure, application and user levels. These controls
include, but are not limited to, infrastructure vulnerability
management, application scanning and penetration
testing, network segmentation, encryption and logging
and monitoring. Our administrative controls include
training and communication initiatives to establish
awareness of risks at all levels of our businesses. The
RELX Group Privacy Principles include the requirement
for transparency, accountability and Privacy by Design.
We have appropriate incident response plans to
respond to threats and attacks, including internal
reporting channels and appropriate external advisors
and support services. We maintain appropriate data
privacy and information security policies and contractual
requirements for our businesses and run programmes
monitoring the application of our data privacy and
information security policies by third-party service
providers. We use independent internal and third-party
auditors to regularly test, evaluate and help enhance
our procedures and controls.
We have established procedures for incorporating the
requirements of relevant laws and regulations into our
overall security programme, including into our policies
and procedures. Our compliance with these is also
regularly reviewed and tested.
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RELX Group Annual reports and financial statements 2017
OPERATIONAL RISKS
Risk
Description and impact
Mitigation
Supply chain
dependencies
Talent
FINANCIAL RISKS
Risk
Pensions
Tax
Treasury
Our organisational and operational structures depend on
outsourced and offshored functions, including use of cloud
service providers. Poor performance, failure or breach of
third parties to whom we have outsourced activities could
adversely affect our business performance, reputation
and financial condition.
The implementation and execution of our strategies and
business plans depend on our ability to recruit, motivate
and retain skilled employees and management. We
compete globally and across business sectors for talented
management and skilled individuals, particularly those
with technology and data analytics capabilities. An inability
to recruit, motivate or retain talent could adversely affect
our business performance. Failure to recruit and develop
a diverse and inclusive workforce could adversely affect
our reputation and business performance.
We select our vendors with care and establish contractual
service levels that we closely monitor, including through
key performance indicators and targeted supplier audits.
We have developed business continuity plans to reduce
disruption in the event of a major failure by a vendor.
We have well-established management development
and talent review programmes. We monitor capability
needs and remuneration schemes are tailored to attract
and motivate the best talent available at an appropriate
level of cost. We actively seek feedback from employees,
which feeds into plans to enhance employee engagement
and motivation. Our Diversity and Inclusion strategy
aims to create a diverse workforce and an environment
that respects individuals and their contribution and
fosters innovation.
Description and impact
Mitigation
We have professional management of our pension
schemes and we focus on maintaining appropriate asset
allocation and plan designs. We review our funding
requirements on a regular basis with the assistance of
independent actuaries and ensure that the funding plans
are appropriate. We seek to manage pension liabilities
by reviewing pension benefits provided to staff as well
as the structure of scheme arrangements.
We maintain an open dialogue with tax authorities, and
are vigilant in ensuring that we comply with current tax
legislation. We have clear and consistent tax policies
and tax matters are dealt with by a professional tax
function, supported by external advisers. As outlined
in the Chief Financial Officer’s report on page 59 we
participate in consultations with tax authorities and
international organisations. The principles we adopt
in our approach to tax matters can be found on our
website at: www.relx.com/go/taxprinciples.
Our approach to capital structure and funding is
described in the Chief Financial Officer’s report on
pages 54 to 59. The approach to the management
of treasury risks is described in note 19 to the
consolidated financial statements.
We operate a number of pension schemes around the
world, including local versions of the defined benefit type
in the UK and the United States. The assets and obligations
associated with those pension schemes are sensitive to
changes in the market values of the scheme’s investments
and the market-related assumptions used to value scheme
liabilities. Adverse changes to asset values, discount rates,
longevity assumptions or inflation could increase future
pension costs and funding requirements.
Our businesses operate globally and our profits are subject
to taxation in many different jurisdictions and at differing
tax rates. The Organisation for Economic Co-operation and
Development (OECD)’s reports on Base Erosion and Profit
Shifting suggest a range of new approaches that national
governments might adopt when taxing the activities of
multinational enterprises. The OECD continues to explore
options around the taxation of the digital economy. As a
result of the OECD’s work and other international initiatives,
tax laws that currently apply to our businesses may be
amended by the relevant authorities or interpreted differently
by them, and these changes could adversely affect our
reported results.
The RELX Group consolidated financial statements are
expressed in pounds sterling and are subject to movements
in exchange rates on the translation of the financial
information of businesses whose operational currencies
are other than sterling. The United States is our most
important market and, accordingly, significant fluctuations
in the US dollar exchange rate could significantly affect our
reported results. We also earn revenues and incur costs in
a range of other currencies, including the euro and the yen,
and significant fluctuations in these exchange rates could
also significantly impact our reported results.
Macroeconomic, political and market conditions may
adversely affect the availability and terms of short and
long-term funding, volatility of interest rates, the credit
quality of our counterparties, currency exchange rates and
inflation. The majority of our outstanding debt instruments
are, and any of our future debt instruments may be, publicly
rated by independent rating agencies. Our borrowing costs
and access to capital may be adversely affected if the credit
ratings assigned to our debt are downgraded.
Financial review Principal risks
63
REPUTATIONAL RISKS
Risk
Ethics
Environmental
Description and impact
Mitigation
As a world-leading provider of professional information
solutions to the STM, risk and business analytics, legal
and exhibitions markets we, our employees and major
suppliers are expected to adhere to high standards of
independence and ethical conduct, including those related
to anti-bribery and anti-corruption, promoting human rights
and principled business conduct. A breach of generally
accepted ethical business standards or applicable anti-
bribery and anti-corruption or competition statutes could
adversely affect our business performance, reputation
and financial condition.
Our businesses have an impact on the environment,
principally through the use of energy and water, waste
generation and, in our supply chain, through paper use and
print and production technologies. Failure to manage our
environmental impact could adversely affect our reputation.
Our Code of Ethics and Business Conduct is provided
to every employee and is supported by training. It
encompasses such topics as competing fairly, prohibiting
corrupt business practice, promoting human rights and
fair employment practices and encouraging open and
principled behaviour. We have well-established processes
for reporting and investigating instances of unethical
conduct. Our major suppliers are required to adhere
to our Supplier Code of Conduct.
We are committed to reducing these environmental
impacts by limiting resource use and efficiently
employing sustainable materials and technologies.
We require our major suppliers and contractors
to meet the same objectives. We seek to ensure that
all our businesses are compliant with relevant
environmental regulation.
The Strategic Report, as set out on pages 2 to 63, has been approved by the Board of RELX PLC.
By order of the Board
Henry Udow
Company Secretary
14 February 2018
Registered Office
1–3 Strand
London
WC2N 5JR
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RELX Group Annual reports and financial statements 2017
Governance
65
Governance
In this section
66 Board Directors
68 RELX Group Business Leaders
70 Chairman’s introduction to
Corporate Governance
71 Corporate Governance review
81 Report of the Nominations Committee
83 Directors’ Remuneration Report
103 Report of the Audit Committees
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RELX Group Annual reports and financial statements 2017
Board Directors
Executive Directors
Non-Executive Directors
Erik Engstrom (54)
Chief Executive Officer
Sir Anthony Habgood (71)
Chairman
R N C
Appointed: Chief Executive Officer of RELX
Group since November 2009. Joined the Group
as Chief Executive Officer of Elsevier in 2004.
Other appointments: Non-Executive Director
of Smith & Nephew plc.
Past appointments: Prior to joining the Group
was a partner at General Atlantic Partners.
Before that was President and Chief Operating
Officer of Random House Inc and President
and Chief Executive Officer of Bantam
Doubleday Dell, North America. Began his
career as a consultant with McKinsey. Served
as a Non-Executive Director of Eniro AB and
Svenska Cellulosa Aktiebolaget SCA.
Education: Holds a BSc from Stockholm
School of Economics, an MSc from the Royal
Institute of Technology in Stockholm, and
gained an MBA from Harvard Business
School as a Fulbright Scholar.
Nationality: Swedish
Appointed: June 2009
Other appointments: Chairman of: Court of the
Bank of England and Preqin Holding Limited.
Past appointments: Previously was Chairman
of Whitbread plc, Bunzl plc, Mölnlycke Health
Care Limited and Norwich Research Partners
LLP and served as Chief Executive of Bunzl plc,
Chief Executive of Tootal Group plc and a Director
of The Boston Consulting Group. Formerly
Non-Executive Director of Geest plc, Marks and
Spencer plc, National Westminster Bank plc,
Powergen plc, SVG Capital plc, and Norfolk
and Norwich University Hospitals Trust.
Education: Holds an MA in Economics from
Cambridge University, an MS in Industrial
Administration from Carnegie Mellon University
and an Honorary Doctorate of Civil Law from the
University of East Anglia. He is a visiting Fellow
at Oxford University.
Nationality: British
Wolfhart Hauser (68)
Non-Executive Director
Senior Independent Director
Chairman of the Remuneration Committee
R N C
Appointed: April 2013
Other appointments: Chairman of FirstGroup
plc and a Non-Executive Director of
Associated British Foods plc.
Past appointments: Chief Executive Officer
of Intertek Group plc from 2005 until 2015.
Prior to that he was Chief Executive Officer
of TÜV Sud AG between 1998 and 2002
and Chief Executive Officer of TÜV Product
Service GmbH for ten years. Formerly a
Non-Executive Director of Logica plc.
Education: Holds a master's degree in
Medicine from Ludwig-Maximilian-University
Munich and a Medical Doctorate from
Technical University Munich.
Nationality: German
Nick Luff (50)
Chief Financial Officer
Robert MacLeod (53)
Non-Executive Director
R C
Carol Mills (64)
Non-Executive Director
A C
Appointed: September 2014
Past appointments: Prior to joining the Group
was Group Finance Director of Centrica plc
from 2007. Before that was Chief Financial
Officer at The Peninsular & Oriental Steam
Navigation Company (P&O) and its affiliated
companies, having previously held a number
of senior finance roles at P&O. Began his
career as an accountant with KPMG.
Formerly a Non-Executive Director of QinetiQ
Group plc and Lloyds Banking Group plc.
Education: Has a degree in Mathematics from
Oxford University and is a qualified
UK Chartered Accountant.
Nationality: British
Appointed: April 2016
Other appointments: Chief Executive
of Johnson Matthey Plc.
Past appointments: Prior to joining Johnson
Matthey, spent five years as Group Finance
Director of WS Atkins plc, having joined as
Group Financial Controller in 2003. From
1993 to 2002, held a variety of senior finance
and M&A roles with Enterprise Oil plc in
the UK and US. Formerly a Non-Executive
Director of Aggreko plc.
Nationality: British
Appointed: April 2016
Other appointments: Independent Director
of Zynga Inc.
Past appointments: A member of the Boards
of Adobe Systems, Alaska Communications,
Tekelec Corporation, Blue Coat Systems,
Xactly Corporation, WhiteHat Security
and Ingram Micro. From 2004 to 2006,
was Executive Vice President and General
Manager of the Infrastructure Products
Group at Juniper Networks. From 1998
to 2002 was Chief Executive Officer of
Acta Technology, and before Acta, spent
16 years at Hewlett-Packard in a number
of executive roles.
Nationality: American
Governance Board Directors
67
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Adrian Hennah (60)
Non-Executive Director
A C
Marike van Lier Lels (58)
Non-Executive Director
A C
Suzanne Wood (57)
Non-Executive Director
A C
Appointed: April 2011
Other appointments: Chief Financial Officer
of Reckitt Benckiser Group plc.
Past appointments: Chief Financial Officer
of Smith & Nephew plc from 2006 to 2012.
Before that was Chief Financial Officer of
Invensys plc, having previously held various
senior finance and management positions
with GlaxoSmithKline for 18 years. Formerly,
a Non-Executive Director of Indivior PLC.
Nationality: British
Appointed: RELX NV, January 2010
RELX PLC and RELX Group plc, July 2015.
Other appointments: Member of the
Supervisory Boards of TKH Group NV,
Eneco Holding NV and NS (Dutch Railways),
and a member of the Executive Committee
of Aegon Association.
Past appointments: Member of the
Supervisory Boards of Royal Imtech NV,
Maersk BV, KPN NV and USG People NV, and
Executive Vice President and Chief Operating
Officer of the Schiphol Group. Prior to joining
Schiphol Group, was a member of the
Executive Board of Deutsche Post Euro
Express and held various senior positions
with Nedlloyd. Member of various Dutch
governmental advisory boards.
Nationality: Dutch
Appointed: September 2017
Other appointments: Group Finance Director
of Ashtead Group plc.
Past appointments: Chief Financial Officer of
Ashtead Group’s largest subsidiary, Sunbelt
Rentals Inc, from 2003 until 2012. Previously,
she also served as Chief Financial Officer of
two US publicly-listed companies, Oakwood
Homes Corporation and Tultex Corporation.
Nationality: American
Linda Sanford (65)
Non-Executive Director
R C
Ben van der Veer (66)
Non-Executive Director
Chairman of the Audit Committees
A N C
Appointed: December 2012
Other appointments: An independent
Director of Consolidated Edison, Inc,
Pitney Bowes, Inc and ION Trading UK Limited,
and a consultant to The Carlyle Group. Serves
on the board of trustees of the New York Hall
of Science.
Past appointments: Senior Vice President,
Enterprise Transformation, IBM Corporation
until 2014, having joined the company in 1975.
Formerly a Non-Executive Director of ITT
Corporation, served on the boards of
directors of The Business Council of New York
State and the Partnership for New York City,
and on the boards of trustees of the State
University of New York, St John’s University
and Rensselaer Polytechnic Institute.
Nationality: American
Appointed: September 2009
Other appointments: Member of the
Supervisory Boards of Aegon NV and
Koninklijke FrieslandCampina NV.
Past appointments: Chairman of the
Executive Board of KPMG in the Netherlands
and a member of the Management Committee
of the KPMG International board until his
retirement in 2008, having joined KPMG in
1976. Formerly a member of the Supervisory
Boards of Royal Imtech NV, Siemens
Nederland NV and Tom Tom NV.
Nationality: Dutch
Board Committee membership key
A Audit Committees
R Remuneration Committee
N Nominations Committee
C Corporate Governance Committee
Committee Chairman
All of the Directors are directors of RELX Group plc,
RELX PLC and RELX NV.
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RELX Group Annual reports and financial statements 2017
RELX Group Business Leaders
Senior Business Executives
Ron Mobed
Chief Executive Officer
Scientific, Technical
& Medical
Joined in 2011. Appointed
to current position in 2012.
Previously President of Cengage
Learning’s Academic &
Professional Group and
Co-President and Co-Chief
Operating Officer with information
services company IHS. Holds a
degree from Trinity College,
Cambridge, and a master’s degree
from Imperial College, London.
Mark Kelsey
Chief Executive Officer
Risk & Business Analytics
Chet Burchett
Chief Executive Officer
Exhibitions
Mike Walsh
Chief Executive Officer
Legal
Joined in 1989. Appointed CEO
Business Information in 2010
and CEO Risk Solutions in 2012.
Has held a number of senior
positions across the Group over
the past 30 years. Studied at
Liverpool University and received
his MBA from Bradford University.
Joined in 2004. Appointed to current
position in 2015.
Joined in 2003. Appointed
to current position in 2011.
Previously President of the
Americas for Reed Exhibitions.
Prior to that was President and
Chief Executive Officer, USA,
for Burson-Marsteller, a leading
global public relations agency.
Holds a degree from Baylor
University.
Previously CEO of LexisNexis US
Legal Markets and Director
of Strategic Business Development
Home Depot. Prior to that was
a practising attorney at Weil,
Gotshal and Manges in Washington
DC and served as a consultant
with The Boston Consulting Group.
Holds a Juris Doctor degree
from Harvard Law School and
is a graduate of Yale University.
Governance RELX Group Business Leaders
69
Corporate Executives
Kumsal Bayazit
Chairwoman, RELX
Technology Forum
and President,
Exhibitions Europe
Youngsuk “YS” Chi
Director of RELX
Corporate Affairs and
Chairman Elsevier
Gunjan Aggarwal
Chief Human Resources
Officer
Henry Udow
Chief Legal Officer and
Company Secretary
Andrew Matuch
Chief Strategy Officer
Joined in 2004. Appointed to
current position in 2016.
Joined in 2005. Appointed to
current position in 2011.
Joined in 2017. Appointed to
current position at that time.
Joined in 2011. Appointed to
current position at that time.
Joined in 2012. Appointed
to current position in 2016.
Previously was President
and Chief Operating Officer
of Random House, founding
Chairman of Random House
Asia and Chief Operating
Officer for Ingram
Book Group. Holds an MBA
from Columbia University
and is a graduate of
Princeton University.
Previously Chief Strategy
Officer, RELX Group, and
Executive Vice President
of Global Strategy and
Business Development
for LexisNexis Legal &
Professional. Prior to
that worked with Bain &
Company in New York,
Los Angeles, Johannesburg
and Sydney. Holds an MBA
from Harvard Business
School and is a Graduate of
the University of California
at Berkeley.
Previously head of Human
Resources for Ericsson’s
global media business
based in Santa Clara,
Silicon Valley and before
that head of Human
Resources for Ericsson
North America. Career
includes a number of
Human Resources positions
in Asia, Europe and North
America at Unilever and
Novartis. Holds an MBA
from Xavier School of
Management, Jamshedpur,
India, and is a graduate from
JMI Institute of Technology.
Previously Chief Legal
Officer and Company
Secretary of Cadbury plc
having spent 23 years
working with the company.
Prior to that worked at
Shearman & Sterling in
New York and London.
Holds a Juris Doctor degree
from the University of
Michigan Law School and
a bachelor’s degree from
the University of Rochester.
Previously was Executive
Vice President Global
Strategy and Business
Development for LexisNexis
Legal and Professional.
Prior to that was a partner
at OC&C Strategy
Consultants. Holds an
MBA from Harvard
Business School and a
bachelor’s degree from
Williams College.
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RELX Group Annual reports and financial statements 2017
Chairman’s introduction to Corporate Governance
The Boards remain committed
to maintaining high standards of
corporate governance, and also
to its simplification by removing
complexity from our structure
and processes, and in doing so
increasing transparency.
Our governance framework
I am pleased to present our Corporate Governance Report
for 2017.
The role of the Boards is to provide effective leadership for the
Group, and to oversee our strategy and the management of risks
to its delivery. This report sets out how the Boards performed
these functions. It summarises their principal activities and
those of the Committees during the year. It also explains in more
detail the Group’s corporate governance arrangements, and
provides an explanation of how both RELX PLC and RELX NV
(the Companies), have applied the main principles of the 2016 UK
Corporate Governance Code (the Code) during the year. To find
information on the application of the Dutch Corporate Governance
Code 2016 by RELX NV, please see the Corporate Governance
Statement of RELX NV which is available on our website,
www.relx.com
The Boards remain committed to maintaining high standards
of corporate governance across the Group, which they view
as essential to delivering long-term success and protecting
shareholder value. With this in mind, I am pleased to report that
the Companies complied with each of the provisions of the Code
in 2017. The Boards are also committed to the simplification of
the Group’s governance arrangements by removing complexity
from our structure and processes, and in doing so increasing
transparency. The Boards are, therefore, proposing to
shareholders to move from our current dual parent holding
company structure to a single parent company. These changes
are described in more detail in the Chairman’s Statement on
page 3.
As part of their leadership role, the Boards are responsible for
developing a culture of appropriate behaviour within RELX Group.
Therefore, they have established comprehensive systems of
corporate governance, which include policies and procedures
that promote corporate responsibility, transparency and
accountability. Central to these policies is the Group’s Code of
Ethics and Business Conduct, which sets out clearly the standards
expected for corporate and individual behaviour. The Code of
Ethics and Business Conduct applies to all Directors and
employees of the Group, and is available on our website at
www.relx.com. More information on its application can be
found in the Corporate Responsibility section on page 45.
The Group’s securities are listed in the UK, US and the Netherlands
and therefore the Companies are subject to applicable corporate
governance requirements of those jurisdictions. These
requirements, which are continually evolving, are reviewed and
monitored by the Corporate Governance Committee. The Boards
delegate a number of other responsibilities to their Committees,
to enable them to carry out their functions effectively. The Boards’
Committee structure is set out on page 72.
Board changes and succession
During the year, the Nominations Committee continued to keep
the composition of the Boards and their committees under
review to ensure their composition remained appropriate. I am
pleased to report that Suzanne Wood, Chief Financial Officer of
Ashtead Group plc, joined the Boards as a Non-Executive Director
in September 2017. Looking ahead, Ben van der Veer will step
down as Chairman of the Audit Committees in April 2018 and
Adrian Hennah will be appointed as his replacement. I would
like to welcome Suzanne to the Boards and thank Ben for his
significant contribution during his eight years as Chairman
of the Audit Committees.
As a consequence, the composition of the Boards’ Committees
was also reviewed by the Nominations Committee, with a small
number of other changes being made to their membership.
The Nominations Committee will continue to monitor Board
and Committee composition and review succession planning
arrangements on an ongoing basis.
Biographical details of each of the Directors are set out on
pages 66 and 67. The membership of the Boards’ Committees
as at 31 December 2017 can also be found on pages 66 and 67.
Board Evaluation and Effectiveness
As Chairman, I am also responsible for ensuring that the
effectiveness of the Boards, their Committees and the individual
Directors are evaluated annually. An externally facilitated
evaluation was last undertaken in 2014/15. Therefore, in
accordance with the Code, the Corporate Governance Committee
appointed an external facilitator, Lorna Parker, to conduct an
independent effectiveness review for 2017/18. Details of the
review, which confirmed that the Boards and their Committees
continue to function effectively, and each Director continues to
be effective and to demonstrate commitment to their roles, are
set out on page 77.
Having reviewed the results of the review, and taking into account
the changes made to the Boards and Committees during the year,
I believe that the Boards and their Committees continue to operate
effectively, and have an appropriate balance of skills, experience,
independence, knowledge of the Group and diversity to ensure
that they continue to do so.
I also remain satisfied that the Non-Executive Directors have
sufficient time to undertake their roles.
Therefore, on the recommendation of the Nominations Committee,
all Directors will stand for election or re-election at the Annual
General Meetings in 2018.
Sir Anthony Habgood
Chairman
14 February 2018
Governance Corporate Governance Review
71
Corporate Governance Review
Overview
Corporate governance compliance and statements
Corporate structure
RELX PLC is a publicly-listed holding company with its shares
traded on the London and New York stock exchanges. Its principal
asset is the shares that it owns in RELX Group plc, which
represent 52.9% of the outstanding shares of RELX Group plc.
RELX NV is a publicly-listed holding company with its shares
traded on the Euronext Amsterdam and New York stock
exchanges. Its principal asset is the shares that it owns in
RELX Group plc, which represent 47.1% of the outstanding
shares of RELX Group plc.
RELX PLC, which has its primary listing on the main market of
the London Stock Exchange, has complied with the provisions
of the UK Code during the year ended 31 December 2017.
RELX NV, which has its primary listing on the Euronext
Amsterdam Stock Exchange, has also complied throughout
the year with the UK Code.
A description of how both RELX PLC and RELX NV have applied
the main principles of the UK Code is set out on pages 72 to 80.
A copy of the UK Code can be found on the FRC website at
www.frc.org.uk
RELX Group plc holds all of the operating businesses,
subsidiaries and financing activities of the Group. The Group’s
corporate structure is shown below:
For information on the application of the Dutch Code by
RELX NV, please see the Corporate Governance Statement of
RELX NV which is available on our website,
www.relx.com
The Directors of RELX PLC and RELX NV are required by the UK
Code to make certain statements in relation to provisions contained
in the UK Code. The locations of those statements are as follows:
§ Page 2 to 63 for the Strategic Report explaining the Group’s
business model and the strategy for delivering the objectives
of the Group
§ Page 60 for confirmation that the Directors have carried out
a robust assessment of the principal risks facing the Group,
including those that would threaten its business model, future
performance, solvency or liquidity
§ Page 79 for confirmation that the Annual Report and Accounts
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy
§ Page 80 for an explanation of how the Directors have assessed
the prospects of the Group, taking into account the Group’s
current position and its principal risks
§ Page 79 for the statement on the status of the Group as a
going concern
RELX PLC
RELX NV
52.9%
47.1%
RELX Group plc
RELX PLC and RELX NV each have equal voting rights in
RELX Group plc. RELX PLC, RELX NV and RELX Group plc are
managed on a unified basis. RELX PLC, RELX NV and RELX Group
plc (and its subsidiaries, associates and joint ventures) are together
known as RELX Group or the Group.
In 2013, RELX NV adopted a unitary Board structure. In 2015,
we implemented a number of significant steps to simplify and
modernise our corporate structure, which resulted in all of
our businesses being owned by one company, RELX Group plc,
with consolidated accounts, all share listings having a 1 to 1
equalisation ratio and the membership of the Boards being fully
aligned. In 2016, the dividends between the shareholders of the
two parent companies were fully equalised.
Approach to corporate governance
The Boards of RELX PLC and RELX NV have implemented
standards of corporate governance and disclosure policies
applicable to companies listed on the London, Amsterdam and
New York stock exchanges. The effect of this is that a standard
applying to one will, where not in conflict, also be observed by
the other.
In 2016, revised versions of the UK Corporate Governance Code
(the UK Code) and the Dutch Corporate Governance Code (the
Dutch Code) were published by the UK Financial Reporting Council
(FRC) and the Dutch Monitoring Committee respectively, with the
UK Code applying to RELX PLC and the Dutch Code applying to
RELX NV from 1 January 2017. The Boards of RELX PLC and
RELX NV support the principles of corporate governance set out
in the revised codes.
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RELX Group Annual reports and financial statements 2017
These are set out in the Terms of Reference for each Committee
which can be found on our website at
www.relx.com.
The membership and activities of these Committees are
described on pages 81, 83 and 103.
There are additionally a number of approved delegated authorities
in place from the Boards to the Chief Executive Officer and other
senior executives which relate principally to the day-to-day
management of the business.
Chairman and Chief Executive – division of responsibilities
There is a clear separation of the roles of the Chairman, who leads
the Boards, and the Chief Executive Officer, who is responsible for
the day-to-day management of the Group, which are set out in
writing. The adjacent table illustrates the key responsibilities
of the Directors. This division of responsibilities, in addition to
the schedule of matters reserved for the Boards and Terms of
Reference for each Committee, ensures that there are appropriate
controls in place to prevent any individual from having unfettered
powers of decision.
Application of UK Corporate Governance
Code Principles
Leadership
Role of the Boards and its Committees
The Boards of RELX PLC, RELX NV and RELX Group plc (the
Boards), which are managed on a unified basis, are responsible
for providing leadership of the Group within a framework of
appropriate and effective controls that enable risk to be assessed,
and then managed in a manner which promotes the success of the
Group. The Boards are also responsible for overseeing the
Group’s strategy and performance, financial reporting, internal
control and risk management framework, and corporate
governance processes.
Their oversight role is implemented on a day-to-day basis through
the operation of a framework of responsibilities and delegated
authorities. There is a schedule of matters reserved for the
approval of the Boards, which generally includes those matters
that are considered material to the current or future financial
performance of the Group. These include matters such as the
approval of material acquisitions, major capital expenditure,
Group strategy and budgets, the Group’s financial statements and
its dividend policy. In order to allow the Boards sufficient time to
give these matters due attention, a number of other responsibilities
have been delegated to four principal Board Committees.
Board Committees
The Boards have established a number of Committees, to which they have delegated certain powers. The structure of these
Committees and a summary of their key responsibilities are set out below. All the Committees have written Terms of Reference,
which are available on our website:
www.relx.com
The Boards
Audit Committees
Responsible for the oversight
of financial reporting, risk
management and internal
control policies, and the
effectiveness of the internal
and external audit processes.
The Committees comprise only
independent Non-Executive
Directors.
Remuneration Committee
Responsible for considering the
remuneration of the Group’s
Executive Directors and the
Chairman, and advising on
remuneration of senior
executives below Board level.
The Committee comprises only
Non-Executive Directors.
Nominations Committee
Responsible for keeping under
review the composition of the
Boards and the Board
Committees, and the
recruitment of new Directors.
The Committee comprises only
Non-Executive Directors.
Corporate Governance
Committee
Responsible for reviewing
ongoing developments and
best practice in corporate
governance, assessing the
performance of the Directors,
and monitoring the structure,
operation and membership
of the Board Committees.
The Committee comprises
only Non-Executive Directors.
Report of the Audit
Committees page 103
Directors’ Remuneration
Report page 83
Report of the Nominations
Committee page 81
Governance Corporate Governance Review
73
Effectiveness
Board composition
The Boards of RELX PLC, RELX NV and RELX Group plc are
unitary boards and are comprised of the same Directors.
In order for the Boards to discharge their duties and
responsibilities effectively, they have an appropriate balance
of skills, experience, independence and knowledge of the Group.
The Nominations Committee reviews, on an ongoing basis, the
composition of the Boards and their committees to ensure that
balance remains appropriate.
The name of each Director, their role on the Boards and their
biographical details as at the date of this report appear on
pages 66 to 67. The Boards currently comprise the Chairman,
two Executive Directors and eight independent Non-Executive
Directors, who bring a wide range of skills and experience to
their roles. A profile which identifies the skills and experience
of each Director is available on our website at
www.relx.com.
A summary of the balance of skills of the Non-Executive Directors
can be found on page 74.
The Nominations Committee and the Boards also consider diversity,
including gender, length of tenure and nationality as important
factors when reviewing the composition of the Boards. A summary
of these can be found on page 74. Currently, 36% of the Boards are
made up of women, compared to the Group’s target of 30%.
Roles of the Directors
Chairman
§ Provides leadership of the Boards, ensuring that they
function effectively
§ Ensures that all Directors are sufficiently appraised
of matters to make informed judgements, through the
provision of accurate, timely and clear information
§ Promotes high standards of corporate governance
§ Sets the agenda and chairs meetings of the Boards
§ Chairs the Nominations and Corporate Governance
Committees
§ Facilitates the effective contribution of all of the Directors
§ Ensures effective dialogue with shareholders
§ Ensures the performance of the Boards is assessed
annually
§ Ensures effective induction and development of Directors
Chief Executive Officer
§ Day-to-day management of the Group
§ Develops and ensures implementation of the Group’s
strategy and commercial objectives
§ Ensures that the decisions of the Boards are implemented
§ Promotes high standards of corporate governance
§ Informs and advises the Chairman and Nominations
Committee on executive succession planning
§ Leads communication with shareholders
Chief Financial Officer
§ Day-to-day management of the Group’s financial affairs
§ Ensures that a robust system of internal control and risk
management is in place
§ Maintains high-quality reporting of financial and
environmental performance internally and externally
§ Supports the Chief Executive Officer in developing and
implementing strategy
Senior Independent Director
§ Leads the Boards’ annual assessment of the performance
of the Chairman
§ Available to meet with shareholders on matters where
usual channels are deemed inappropriate
§ Deputises for the Chairman, as necessary
§ Serves as a sounding board for the Chairman and acts as an
intermediary between the other Directors, when necessary
Non-Executive Directors
§ Constructively challenge and provide advice to the
Executive Directors
§ Effectively contribute to the development of strategy
§ Scrutinise the performance of management in meeting
agreed goals and monitor the delivery of the Group’s
strategy
§ Serve as members of Board Committees and chair the
Audit and Remuneration Committees
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RELX Group Annual reports and financial statements 2017
Balance of our Boards
BALANCE OF EXECUTIVE/NON-EXECUTIVE DIRECTORS
GENDER DIVERSITY
Executive: 2
Chairman: 1
Female: 4
Non-Executive: 8
LENGTH OF TENURE OF NON-EXECUTIVE DIRECTORS
NATIONALITY OF DIRECTORS
Seven to nine years: 3
Less than three years: 3
Dutch: 2
Swedish: 1
German: 1
Three to six years: 3
American: 3
Male: 7
British: 4
Areas of significant skills and expertise of
the Non-Executive Directors on the Boards
Knowledge of corporate governance issues for listed companies
Operational experience in the Group’s main geographical markets
Human resource management and executive remuneration
Corporate responsibility
Corporate strategy and organisation
Marketing and customer relations
Financial and organisational audit
Executive board experience in a large international listed company
75%
Operational experience in the telecommunications and information technology sectors
Legal matters
Banking, tax and corporate finance
Operational experience in the Group’s product markets
33%
Percentage of the
Non-Executive Directors
100%
100%
100%
100%
100%
78%
78%
78%
67%
67%
56%
Governance Corporate Governance Review
75
Key activities of the Boards
The Boards meet regularly throughout the year and, in 2017, held seven scheduled meetings. The Boards' schedule ensures that
all relevant matters are considered during those meetings. The Boards’ schedule is set by the Chairman, with support from the
relevant Company Secretary. Additionally, throughout the year, the Non-Executive Directors meet without the Executive Directors
present on a regular basis.
In 2017, the Board considered the following:
Business and Financial
Performance
§ Reports from the Chief
Executive Officer and
Chief Financial Officer
on the Group’s actual and
forecasted operational
and financial performance
§ Annual and Interim
Financial Results
§ Annual Review of
Invested Capital
Shareholders
§ Investor Relations
activities
§ Dividend declarations
and policy
§ Share buyback
programme
§ Approval of shareholder
communications, such
as the Annual Report
and Notice of General
Meetings
Strategy, Business and
Functional Reviews
§ Strategy and business
presentations, including
two full-day strategy
reviews
§ Budgets and Annual
Risk, Legal, Governance
and Regulatory Matters
§ The Group’s principal
risks and ongoing
monitoring of risk
management and internal
control
Strategy Plan 2017-2020
§ The Group’s Operating
§ Updates on major
acquisitions, investments
and disposals
§ Capital Structure and
Funding requirements
and Governance
Principles
§ Board succession
and executive talent
management
§ Appointments and
re-appointments to the
Boards and appointment
to Boards’ Committees
§ Litigation update
§ Reports from the
Committee Chairmen on
the key activities of the
Boards Committees
§ The Terms of Reference
for each Board
Committee
Independence of the Non-Executive Directors
The Boards review the independence of the Non-Executive
Directors every year, based on the criteria as set out in the UK
Code. In accordance with the UK Code, the independence criteria
are not applied in respect of the Chairman after his appointment.
Notwithstanding this, Sir Anthony Habgood met the independence
criteria contained in the UK Code when he was appointed
Chairman in 2009. The Boards consider all Non-Executive
Directors (other than the Chairman) to be independent of
management and free from any business or other relationship
which could materially interfere with their ability to exercise
independent judgement. The membership of the Audit,
Remuneration and Nominations Committees also meet the
independence criteria under the Code.
Succession planning
The Nominations Committee regularly reviews the composition
of the Boards and the status of succession plans. The Boards are
updated annually on senior management succession planning,
and during the year, they received a detailed presentation from
the Chief Human Resources Officer on the first three tiers of
management below the Chief Executive Officer. Directors also
have regular contact with succession candidates for senior and
executive management positions.
Board appointments
RELX PLC and RELX NV shareholders maintain their rights to
appoint individuals to their respective Boards in accordance with
the provisions of the articles of association of these companies.
However, no individual may be appointed to the Boards unless
recommended by the joint Nominations Committee. Members
of that Committee abstain when their own re-appointment is
being considered.
As a general rule, letters of appointment for Non-Executive
Directors provide that, subject to annual re-election by
shareholders, individuals will serve for an initial period of three
years, and are typically expected to be available to serve for a
second three-year period, if invited to do so. They may also be
invited to serve for a third period of three years. The Non-
Executive Directors’ letters of appointment set out the expected
time commitment required by the Company to fulfil their duties.
The notice period applicable to the Non-Executive Directors is
one month. The notice period applicable to the service contracts
of the Executive Directors is 12 months. Details of the terms of
appointment and the remuneration of both Executive and
Non-Executive Directors are set out in the Directors’
Remuneration Report, on pages 83 to 95.
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RELX Group Annual reports and financial statements 2017
In compliance with the UK Code, all Directors seek re-election
by shareholders annually, except for those Directors retiring
immediately after the respective Annual General Meetings.
Board and Committee changes
Changes during the year in the composition of the Boards and
Board Committees are set out in the table on page 77.
The ongoing evolution of the Boards continued in 2017, with
Suzanne Wood appointed as an independent Non-Executive
Director. Ms Wood was also appointed as a member of the Audit
Committees, which will benefit from her significant financial
experience at Board level in publicly-listed companies, both
in the UK and US.
Following a review of the composition of the Boards’ Committees
in anticipation of Ms Wood's appointment to the Audit Committees,
the Boards accepted a recommendation from the Nominations
Committee that with effect from 26 September 2017: (i) Linda
Sanford join the Remuneration Committee and step down from
the Audit Committees; and (ii) Carol Mills step down from the
Remuneration Committee and remain on the Audit Committees.
In accordance with the articles of association of RELX PLC,
Directors are normally subject to election by shareholders at the
first Annual General Meeting following their appointment to the
Board. Therefore, Ms Wood will stand for election by shareholders
at the 2018 RELX PLC Annual General Meeting.
In accordance with the UK Code, all other Directors will retire
from the Board of RELX PLC at the Annual General Meeting and
will offer themselves for re-election. All Directors of RELX NV,
including Ms Wood who was appointed by shareholders in
September 2017, will retire from the RELX NV Board at the
2018 Annual General Meeting and will offer themselves for
re-appointment. Based on the results of an independent external
evaluation of the Boards, their Committees and each Director
seeking re-election at the 2018 Annual General Meeting, the
Boards have accepted a recommendation from the Nominations
Committee that each of those Directors be proposed for
re-election at the 2018 Annual General Meeting of the respective
companies. Details of the independent external evaluation of the
Boards completed in respect of 2017/18 are set out on page 77.
Board induction and development
The Chairman and the Company Secretary are responsible for
ensuring that an effective induction programme takes place for
all new Directors. Following appointment and as required, all
Directors receive a full, formal and tailored induction, which is
designed to meet their individual needs based on their knowledge
and experience. This includes the provision of a comprehensive
briefing pack which contains information on the Group’s
businesses, as well as other relevant information to assist that
Director in performing their duties.
Upon joining the Boards as a Non-Executive Director in September
2017, an induction programme for Ms Wood was designed taking
into account her previous knowledge and experience and the role
that she was being asked to undertake for RELX Group. This
included meetings with the leadership teams of the main business
operating units, and also with the Chief Strategy Officer, in order
to enhance and deepen her understanding of RELX Group, its
businesses and the competitive environment in which it operates.
She also received presentations from the Group’s key corporate
functions, including Finance and Internal Audit & Risk
Management, and from a number of the Group’s principal external
advisers. Given her first-time appointment to the Board of a
Dutch-listed company, Ms Wood was provided with an in-depth
briefing on her duties as a Director under Dutch law. She further
undertook a comprehensive Audit Committee programme
including a briefing from the external auditor, designed to ensure
familiarisation with the Committee’s oversight responsibilities.
To ensure that the Directors continually update their skills,
knowledge and familiarity with the Group, they attend meetings
in addition to scheduled Board and Committee meetings and
participate in site visits. Additionally, Non-Executive Directors
also have opportunities to meet RELX Group Business Leaders
and other senior executives. As part of the annual Board
evaluation, Directors are invited to discuss with the Chairman
their training and development needs.
Board information and support
All Directors have complete and timely access to the information
required to discharge their responsibilities fully and effectively.
They have access to the services of the respective Company
Secretaries, who are responsible for the accurate and timely flow
of information to the Boards and advising the Chairman on all
corporate governance matters. The Company Secretary of each
Board attends all of its meetings. The Directors also have access
to other members of the Group’s management, staff and external
advisers, and may take independent professional advice in the
furtherance of their duties, at the relevant company’s expense.
Each of the Directors is expected to attend all meetings of the
Board and Committees of which they are a member. Where a
Director is unable to attend a Board or Committee meeting, they
are provided with the papers relating to that meeting and are able
to discuss issues arising with the respective chairman and other
Board and Committee members. They are also provided with a
copy of the meeting minutes.
Governance Corporate Governance Review
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Attendance at meetings of the Boards and Board Committees
The table below shows the attendance of Directors at meetings of the Boards and the Board Committees during the year.
Attendance is expressed as the number of meetings attended out of the number eligible to be attended.
Director
Anthony Habgood (Chairman)
Erik Engstrom
Nick Luff
Wolfhart Hauser
Adrian Hennah
Marike van Lier Lels
Robert MacLeod
Carol Mills (2)
Linda Sanford (3)
Ben van der Veer
Suzanne Wood (4)
Committee
appointments
R N C
–
–
R N C
A C
A C
R C
A R C
A R C
A N C
A C
Boards (1)
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
3/3
Audit
–
–
–
–
3/4(5)
4/4
–
4/4
3/3
4/4
1/1
Remuneration Nominations
3/3
–
–
3/3
–
–
–
–
–
3/3
–
3/3
–
–
3/3
–
–
3/3
1/1
2/2
–
–
Corporate
Governance
5/5
–
–
5/5
5/5
5/5
5/5
5/5
5/5
5/5
2/2
Board Committee
membership key
A Audit
R Remuneration
N Nominations
C Corporate Governance
Committee Chairman
(1) The Boards of RELX PLC, RELX NV and RELX Group plc. In addition to the seven scheduled meetings above, in 2017 serving Directors attended two full-day strategy and
business review meetings.
(2) Ms Mills stepped down as a member of the Remuneration Committee with effect from 26 September 2017.
(3) Ms Sanford joined the Remuneration Committee and stepped down as a member of the Audit Committees, both with effect from 26 September 2017.
(4) Ms Wood was appointed as a Non-Executive Director of the Boards and as a member of the Audit Committees with effect from 26 September 2017.
(5) Mr Hennah was unable to attend the February meetings of the Audit Committees due to an unexpected conflict which arose at short notice. He was provided with the papers
in advance of the meeting for his review and comment (which was provided to the Audit Committee Chairman), and subsequent to the meeting taking place was provided
with a copy of the minutes.
Board evaluation
The Directors consider the evaluation of the Boards, its
Committees and members to be an important aspect of corporate
governance. In 2017, the Corporate Governance Committee
appointed an external facilitator to carry out an independent
effectiveness review of the Boards, their Committees and each
Director. The facilitator was Lorna Parker, an independent
practitioner with no other connection to the Group. Ms Parker’s
review took the form of structured interviews with Directors and
the Company Secretaries, supported by individual questionnaires
completed by all participants. Access to Board and Committee
papers for the prior 12 months was provided to Ms. Parker.
The review explored the following key areas:
§ Board performance and effectiveness of decision-making
§ Board composition and succession planning
§ Talent management and executive succession leadership
§ Risk management, corporate governance and compliance
§ Agenda planning and quality of information provided by
management
§ Committee effectiveness
The principal findings and recommendations from the evaluation
were discussed with the Chairman and Senior Independent
Director, following which they were presented to a meeting of
the Boards.
The review of the performance of the Chairman of the Boards was
led by the Senior Independent Director. The Chairman was not
present during discussion among the Non-Executive Directors
relating to his performance. The conclusions of the review were
subsequently considered at a meeting of the Boards.
Conclusions of the 2017 review
The review confirmed that the Boards are functioning
effectively, underpinned by an appropriate blend of
experience, skills, gender and nationality, and an efficient
and thorough operating style led by the Chairman and Chief
Executive Officer. It further confirmed that the Directors
continue to be appropriately involved in key decisions taken
by the Group, monitoring the performance of the Group and
developing the Group’s strategy, and that a sound decision-
making process is in place which takes account of feedback
and challenge provided by the Non-Executive Directors. An
engaged and respectful atmosphere exists where openness
and debate are encouraged in Board discussions. There
continued to be clarity and alignment around strategy and the
key risks and challenges facing the Group. In line with evolving
best practice Corporate Governance, in 2018 an area of
increased focus for the Boards will be the Group’s culture
and values. Additionally, the Board and their Committees will
also focus on the revised UK Corporate Governance Code,
currently expected to be published in 2018.
Based on the findings of the review, the Corporate Governance
Committee concluded that the Boards and their Committees
function effectively and collaboratively and with an appropriate
level of engagement with management. The Committee also
concluded that the performance of each Director continues
to be effective and that they demonstrate commitment to their
respective roles.
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78
RELX Group Annual reports and financial statements 2017
Accountability
Internal control and risk management
RELX Group has established internal controls and risk
management practices that are embedded into the operations
of the businesses, based on the Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring
Organisations of the Treadway Commission (COSO). Details of
the principal risks facing the Group and how these are mitigated
are set out on pages 60 to 63.
Additionally, in order to provide reasonable assurance against
material inaccuracies or loss, and on the effectiveness of the
systems of internal control and risk management, the Group has
adopted the three lines of defence assurance model shown below.
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1st Line of Defence
Group businesses maintain systems of internal
control which are appropriate to the nature and
scale of their activities and address all significant
strategic, operational, financial and legal
compliance risks that they face
2nd Line of Defence
Central functions that are responsible for
1) designing policies, 2) introducing and sharing best
practice, 3) monitoring and evaluating compliance
with RELX policies and relevant legislation and
regulation and appropriate remediation
3rd Line of Defence
Internal audit provides independent assurance on
the effectiveness of the 1st and 2nd lines of defence
The Boards and Audit Committees
Note: In addition to the Group’s internal controls, the Group is also audited externally.
The report of the external auditor has been included from pages 106 to 116.
RELX PLC and RELX NV
The Boards of RELX PLC and RELX NV have each adopted a
schedule of matters which are required to be brought to them
for decision. During 2017, the Boards of RELX PLC and RELX NV
exercised independent supervisory roles over the activities and
systems of internal control of RELX Group plc. The Boards of
RELX PLC and RELX NV also approved the strategy and the annual
budgets of RELX Group plc, and received regular reports on its
operations, including treasury and risk management activities.
Major transactions proposed by the Board of RELX Group plc
required the approval of the Boards of both RELX PLC and
RELX NV. The RELX PLC and RELX NV Audit Committees met
on a regular basis to review the systems of internal control and
risk management of RELX Group plc.
RELX Group plc
The Board of RELX Group plc is responsible for the system of
risk management and internal control of the Group and has
implemented an ongoing process for identifying, assessing,
monitoring and managing the principal risks faced by its
businesses. This process was in place throughout the year
ended 31 December 2017, and up to the date of the approvals of
the Annual Reports and Financial Statements 2017. The Board
monitors these systems of internal control and risk management
and annually carries out a review of their effectiveness.
RELX Group plc has an established framework of procedures
and internal control, with which the management of each
business is required to comply. The Board has adopted a
schedule of matters that are required to be brought to it for
decision. The Group operates authorisation and approval
processes throughout all of its operations. Access controls exist
where processes have been automated to ensure the security
of data. Management information systems have been developed
to identify risks and to enable assessment of the effectiveness
of the systems of internal control.
RELX Group plc has a Code of Ethics and Business Conduct that
provides a guide for achieving its business goals and requires
officers and employees to behave in an open, honest, ethical
and principled manner. The Code also outlines confidential
procedures enabling employees to report any concerns about
compliance, or about the Group’s financial reporting practice.
The Code is available on our website at
www.relx.com
Each business area has identified and evaluated its principal risks,
the controls in place to manage those risks and the levels of
residual risk accepted. Risk management and control procedures
are embedded into the operations of the business and include the
monitoring of progress in areas for improvement that come to
management and Board attention.
The principal risks facing RELX Group businesses are regularly
reported to and assessed by the Board and Audit Committee.
With the close involvement of business management and central
functions, the risk management and control procedures ensure
that the Group is managing its business risks effectively and in
a coordinated manner across the businesses with clarity on the
respective responsibilities and interdependencies. Litigation and
other legal regulatory matters are managed by legal directors in
the business.
The RELX Group plc Audit Committee receives regular reports on
the identification and management of principal risks, and reviews
these reports. The Audit Committee also receives regular reports
from both internal and external auditors on internal control and
risk management matters. In addition, each business area is
required, at the end of the financial year, to review the effectiveness
of internal controls and risk management and report its findings
on a detailed basis to the management of RELX Group plc. These
reports are summarised and, as part of the annual review of
effectiveness, submitted to the Audit Committee. The Chairman
of the Audit Committee reports to the Board on any significant
internal control matters arising.
Governance Corporate Governance Review
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Annual review
As part of the year-end procedures, the RELX PLC and RELX NV
Audit Committees and Boards reviewed the effectiveness of the
systems of internal control and risk management, during the
2017 financial year. This included consideration of risk appetite
(defined as the Group’s willingness to take on risk) for each
principal risk. Risk appetite is based on an assessment of the level
of residual risk, taking account of inherent risk and mitigation
effort. The assessment is rated, in relation to the Group’s
objectives for the current level of residual risk, in three broad
categories: reduce, accept and willing to extend. The level of
residual risk which the Group is prepared to accept will vary, with
a high level of mitigation effort over operational, financial and
compliance risks. The residual risk level for external and strategic
risks may be extended if doing so is in line with the Group’s
strategic objectives, values and stakeholder interests and if
shareholder returns could be increased. As part of the annual
review, the Boards considered the Group's culture. The objective
of these systems of internal control and risk management is
to manage, rather than eliminate, the risk of failure to achieve
business objectives. Accordingly, they can only provide
reasonable, but not absolute, assurance against material
mis-statement or loss. The Boards have confirmed, subject to the
above, that as regards financial reporting risks, the respective
risk management and control systems provide reasonable
assurance against material inaccuracies or loss and have
functioned properly during the year. In accordance with the Code,
the Board has also considered the Group’s long-term viability,
following a robust and thorough assessment of its principal risks.
The resulting Viability Statement is set out on page 80.
Responsibilities in respect of the financial
statements
The Directors of RELX PLC, RELX NV and RELX Group plc are
required to prepare financial statements as at the end of each
financial period, in accordance with applicable law and
regulations, which give a true and fair view of the state of affairs,
and of the profit or loss, of the respective companies and their
subsidiaries, joint ventures and associates. They are responsible
for maintaining proper accounting records, for safeguarding
assets, and for taking reasonable steps to prevent and detect
fraud and other irregularities.
The Directors are also responsible for selecting suitable
accounting policies and applying them on a consistent basis,
and making judgements and estimates that are prudent and
reasonable. Applicable accounting standards have been followed
and the RELX Group consolidated financial statements, which
are the responsibility of the Directors of RELX PLC, RELX NV and
RELX Group plc, are prepared using accounting policies which
comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board and as
adopted by the European Union. Having taken into account all of
the matters considered by the Boards and brought to the attention
of the Boards, the Directors are satisfied that the Annual Report
and Accounts, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy.
Going concern
The Directors of RELX PLC, RELX NV and RELX Group plc, having
made appropriate enquiries, consider that adequate resources
exist for the Group to continue in operational existence for the
foreseeable future and that, therefore, it is appropriate to adopt
the going concern basis in preparing the 2017 financial
statements. In reaching these conclusions, the Directors of
RELX PLC, RELX NV and RELX Group plc have had due regard to
the Group’s financial position as at 31 December 2017, the strong
free cash flow of the Group, the Group’s ability to access capital
markets and the principal risks facing the Group.
A commentary on the Group’s cash flows, financial position and
liquidity for the year ended 31 December 2017 is set out in the
Chief Financial Officer’s report on pages 54 to 59. This shows that
after taking account of available cash resources and committed
bank facilities that back up short-term borrowings, all of the
Group’s borrowings that mature within the next two years can be
covered.The Group’s policies on liquidity, capital management and
management of risks relating to interest rate, foreign exchange
and credit exposures are set out on pages 147 to 152. The principal
risks facing the Group are set out on pages 60 to 63.
US certificates
As required by Section 302 of the US Sarbanes-Oxley Act 2002
and by related rules issued by the US Securities and Exchange
Commission (the Commission), the Chief Executive Officer and
Chief Financial Officer of RELX PLC and RELX NV certify in the
respective Annual Reports 2017 on Form 20-F to be filed with
the Commission that they are responsible for establishing and
maintaining disclosure controls and procedures and that they have:
§ designed such disclosure controls and procedures to ensure
that material information relating to the Group is made known
to them
§ evaluated the effectiveness of the Group’s disclosure controls
and procedures
§ based on their evaluation, disclosed to the Audit Committees
and the external auditors all significant deficiencies in the
design or operation of disclosure controls and procedures and
any frauds, whether or not material, that involve management
or other employees who have a significant role in the Group’s
internal controls
§ presented in the RELX Group Annual Report 2017 on Form 20-F
their conclusions about the effectiveness of the disclosure
controls and procedures
A Disclosure Committee, comprising the Company Secretaries of
RELX PLC and RELX NV and other senior managers of the Group,
provides assurance to the Chief Executive Officer and Chief
Financial Officer regarding their Section 302 certifications.
Section 404 of the US Sarbanes-Oxley Act 2002 requires the
Chief Executive Officer and Chief Financial Officer of RELX PLC
and RELX NV to certify in the respective Annual Reports 2017
on Form 20-F that they are responsible for maintaining
adequate internal control structures and procedures for financial
reporting and to conduct an assessment of their effectiveness.
The conclusions of the assessment of internal control structures
and financial reporting procedures, which are unqualified, are
presented in the RELX Group Annual Report 2017 on Form 20-F.
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80
RELX Group Annual reports and financial statements 2017
Viability statement
Each year management develops a three-year strategy plan that
reflects the expected operating environment. This plan forms
the basis for Group and divisional targets. In 2017, our strategy
is unchanged. Our objective is to deliver improved outcomes for
professional and business customers across industries, to help
them make better decisions, get better results and be more
productive. We do this by leveraging a deep understanding of
our customers to develop increasingly sophisticated information
based analytics and decision tools which combine content and
data with analytics and technology in global platforms. We aim
to build leading positions in long-term global growth markets
and leverage our skills, assets and resources, both to build
solutions for our customers and to pursue cost efficiencies.
Further details on our strategy and 2017 progress are on pages 4
and 5. Whilst management selected three years for its review
and quantitative testing of the Group’s viability, reflecting the
length of the annual strategy plan period, it also considered
longer-term developments.
The three-year strategic plan for our businesses includes
management’s assessment of the anticipated operational risks
affecting the business and assumes that current economic
conditions broadly persist, financing will be available on similar
terms to those negotiated recently and interest rates will follow
market expectations. Management then considers the viability
of the business should unexpected events arise. A full
description of the principal risks facing our business is set out
on pages 60 to 63 along with the mitigating controls. In assessing
viability, a cross-functional team comprised of business unit,
risk, strategy and treasury personnel estimate the quantitative
impact of each individual risk on the Group’s revenue and profit.
The analysis then considers the effect of various sets of multiple
risks occurring simultaneously, combined with the inability
to access the debt capital markets to refinance scheduled
liabilities as they become due. Reflecting the importance of
proprietary data and potential disruption or loss of data sources,
we modelled the impact of a worst-case scenario assuming the
invalidation of certain intellectual property rights and inability
to use certain third-party information. The analysis concluded
that even with the simultaneous occurrence of these risks and
no access to the debt capital markets, the Group would still have
sufficient funds to trade, settle its liabilities as they come due
and remain compliant with its financial covenants.
In addition to scenario modelling, the Directors bi-annually
review the Group’s principal risks, assess the likelihood and
impact of each risk together with the effectiveness of mitigating
controls. The Directors also receive regular updates from
management on treasury, tax, acquisitions and divestments
and periodic briefings on significant risk areas including
information security, technology and legal and regulatory
matters. Finally, separate from the annual strategy plan, the
Directors periodically receive updates from business area
management on their operations, prospects and risks. Whilst
these reviews and discussions naturally focus more closely on
the quantifiable risks facing the business, they also cover risks
that may occur outside of the three-year planning period.
As a result of stress-testing the three-year strategic plan
and supported by regular reviews of risk during the year, the
Directors confirm that they have a reasonable expectation that
the Group will be able to continue its operations and meet its
liabilities as they fall due over the next three years and are not
aware of any longer-term operational or strategic risks that
would result in a different outcome from the three-year review.
Shareholder engagement
RELX PLC and RELX NV participate in regular dialogue with their
shareholders. Each listed company reports to its shareholders
through the publication of the Group’s interim and full-year
reports, following which presentations are made by the Chairman,
Chief Executive Officer and Chief Financial Officer on the Group’s
business, and these are simultaneously webcast. In addition,
quarterly trading updates are provided ahead of the Annual
General Meetings of the two listed companies and towards the
end of the financial year, and a conference call with investors
was held following the third-quarter trading update for 2017.
In addition, a teach-in focused on developments in the Exhibitions
business was held for analysts and investors in November 2017,
which was also made available on our website at
www.relx.com
The Chief Executive Officer, the Chief Financial Officer and the
investor relations team meet institutional shareholders on a
regular basis and the Chairman also makes himself available
to major institutions as appropriate. The interim and annual
results announcements and presentations, together with the
trading updates, other important announcements and corporate
governance documents concerning the Group, are available
on our website. RELX NV has adopted a bilateral shareholder
contact policy, which is also available on our website.
The Boards of RELX PLC and RELX NV commission periodic
reports on the attitudes and views of the companies’ institutional
shareholders and the results are presented to the respective
Boards. The Boards also receive regular updates from the
Group’s Head of Investor Relations on the views of shareholders
through a briefing which is a standing agenda item for all meetings
of the Boards.
Annual General Meetings
The Annual General Meetings provide an opportunity for the
Boards to communicate with individual shareholders. The
Chairman, the Chief Executive Officer, the Chief Financial Officer,
the Chairmen of the Board Committees, other Directors and a
representative of the external auditors are available to answer
questions from shareholders. Both RELX PLC and RELX NV offer
electronic voting facilities in relation to proxy voting at shareholder
meetings. All shareholders have an opportunity at the AGM to put
questions to members of the Boards about RELX’s performance.
In line with the UK Corporate Governance Code, details of proxy
voting by shareholders, including votes withheld, are given at the
AGM and are posted on our website following the AGM.
Governance Report of the Nominations Committee
81
Report of the Nominations Committee
This report has been prepared by the joint Nominations
Committee of RELX PLC and RELX NV and has been approved
by the respective Boards.
Activities of the Committee
During the year, the Committee met three times and its main areas
of focus were:
Membership
The Committee comprises only Non-Executive Directors. The
members of the Committee who served during the year were:
§ Anthony Habgood (Committee Chairman)
§ Ben van der Veer
§ Wolfhart Hauser
Responsibilities
The principal role and responsibilities of the Committee
are to provide assistance to the Boards by identifying
individuals qualified to become Directors and recommending
to the Boards the appointment of such individuals. The
responsibilities of the Committee are set out in written Terms
of Reference (available at
www.relx.com) and include:
§ to keep under review the size and composition of the Boards
§ to develop and agree the specification for the recruitment
of new Directors
§ to procure the recruitment of new Directors
§ to recommend to the Boards the appointment of candidates
subject, where appropriate, to the approval of shareholders
of RELX PLC and RELX NV
§ to recommend Directors to serve on the Committees of
the Boards, having regard to the criteria for service on
each Committee as set out in the Terms of Reference for
such Committees, and to recommend members to serve
as the Chair of those Committees
§ to make recommendations to the Boards in relation to
the re-appointment of any non-executive Director at the
conclusion of his/her specified term of office and the
election or re-election of Directors at the Annual General
Meetings of RELX PLC and RELX NV
§ to review and make recommendations to the Boards
in relation to any Directors’ actual or potential conflicts
of interest
§ the re-appointment of Adrian Hennah as a Non-Executive
Director at the conclusion of his specified term of office
§ the appointment of Suzanne Wood as a Non-Executive Director
§ a review of the composition of the Audit and Remuneration
Committees resulting in the following changes: Linda Sanford
stepped down as a member of the Audit Committees and joined
the Remuneration Committee; Suzanne Wood was appointed
as a member of the Audit Committees; and Carol Mills stepped
down as a member of the Remuneration Committee and
remained a member of the Audit Committees
§ a review of the Committee’s Terms of Reference
§ succession planning for Non-Executive Directors
§ the recommendation to the Boards of the suitability of
Directors’ external non-executive director appointments
Composition and diversity of the Boards
The Committee seeks to ensure that the Boards and their
Committees comprise an appropriate balance of skills, experience,
independence, knowledge of RELX Group’s businesses, and
diversity, including gender. The Committee has established a
formal, rigorous and transparent procedure for the recruitment of
candidates to the Boards and recommendations by the Committee
are made principally on the basis of a candidate’s merit, against
objective criteria and with due regard for the benefits of diversity.
The Group’s Diversity and Inclusion (D&I) Statement applies
across RELX Group, including to the Boards and their Committees.
The objective of the Statement is to articulate the Group’s
commitment to a diverse workforce and to an environment that
respects individuals and their contributions, regardless of gender,
race or other characteristics, and to ensure the implementation
of that commitment. The Committee takes the D&I Statement into
consideration when discussing the composition of the Boards and
their Committees, and any appointments or changes to them, and
this helps the Committee ensure that there is an appropriate
balance of skills, experience, independence and knowledge of the
Group and diversity including gender, background and nationality.
The results of the implementation of the D&I Statement during
the year can be found within the ‘Balance of our Boards’ section
set out on page 74.
The Committee recognises the benefits that diversity on the
Boards can bring and has noted the recommendations set out in
the Hampton-Alexander Review on improving gender balance in
FTSE leadership and the Parker Report into ethnic diversity of UK
Boards. The Committee will continue to monitor developments
in relation to Board diversity. Details of the Group’s approach to
diversity and inclusion more generally in its workforce can be
found in the Corporate Responsibility Report on page 42.
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RELX Group Annual reports and financial statements 2017
The Committee retained The Zygos Partnership, an independent
recruitment consultancy specialising in non-executive
appointments with no other connection to RELX Group, to carry
out the search for a new Non-Executive Director. Following a
rigorous and transparent process of assessments and interviews,
the Committee recommended to the Boards that Suzanne Wood
be appointed as a Non-Executive Director. The Boards accepted
this recommendation and following approval by the shareholders
of RELX NV, Ms Wood joined the Boards in September 2017. As part
of the selection process, the Committee considered, among other
things, Ms Wood’s ability to devote sufficient time to the role of
Non-Executive Director, her existing external interests, and her
independence as defined under the UK Code.
The charts on page 74 illustrate in more detail the composition
of the Boards.
Conflicts of interest
During the year, the Committee monitored Directors’ conflicts of
interest in respect of their external appointments, and undertook
an annual review of these. No actual conflicts were identified.
However, situations were identified which could potentially give
rise to a conflict of interest, and the Boards authorised those
situations and put in place appropriate procedures to manage
any potential conflicts at the recommendation of the Committee.
More information on conflicts of interest can be found in the
RELX PLC Directors’ Report on page 168.
Director re-elections
The Committee reviewed the results of the evaluation of the
effectiveness and performance of the Boards, their Committees
and the individual Directors, which had been facilitated by Lorna
Parker, an independent external practitioner, and overseen by the
Corporate Governance Committee. Details of the 2017/18 Board
evaluation can be found on page 77. Following this review, the
Committee recommended that each Director on the Boards as
at 31 December 2017 be put forward for election or re-election
at the 2018 Annual General Meetings.
Governance Directors’ Remuneration Report
83
Directors’ Remuneration Report
The Directors' Remuneration Report (the Report) describes how the Group applies the principles of good governance relating
to Directors' remuneration. This Report has been prepared by the Remuneration Committee of RELX Group plc (the Committee)
in accordance with the UK Corporate Governance Code, the UK Listing Rules, the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 (the UK Regulations) and the Dutch Corporate Governance Code
(the Dutch Code).
The Report was approved by the Boards of RELX PLC, RELX NV and RELX Group plc.
Introduction from the Remuneration Committee Chairman
The attached Report reflects the annual incentives earned and the vesting outcomes for multi-year incentives granted under the
remuneration policy applicable to the 2015-2017 cycle of the multi-year plans.
For 2017, underlying revenue growth was 4%. Underlying operating profit growth was 6%, and adjusted earnings per share (EPS)
at constant currencies grew 7%. The performance measures used in our incentive plans (annual and multi-year) are based on adjusted
figures as they provide relevant information in assessing the Group’s performance, position and cash flows. We believe that our adjusted
measures track the core operational performance of the Group and how it contributes to shareholder value creation. The RELX Annual
Report includes a reconciliation of adjusted measures to IFRS measures.
These results carry forward the strong financial results of the company over the preceding six years, with consistent revenue, profit and
earnings per share growth. With more predictable revenues, a higher growth profile and improving returns the company continues to
improve its quality of earnings. This consistent strong financial performance is reflected in good achievements against targets under
the multi-year incentive plans.
2017 Outcomes
The 2017 annual incentive payments to the Executive Directors were just above target, resulting in payouts of around 69% of the
maximum opportunity, which is a level that has been relatively consistent over the past seven years and is in line with the consistent
annual financial progress made by the business during this time.
The 2015-17 cycle of the Long Term Incentive Plan (LTIP) vested at 88.1%, with the return on invested capital (ROIC) target having been
fully achieved, EPS just below the middle of the target range and total shareholder return (TSR) above the upper quartile of the sterling
and euro comparator groups and just below the upper quartile for the US dollar comparator group. On average, over the three-year
period, adjusted EPS growth at constant currencies was 7.6% p.a. ROIC and EPS performance in respect of the 2015-17 cycle of the
Bonus Investment Plan (BIP) and the Executive Share Option Scheme (ESOS) resulted in respective vesting percentages of 92.8% and
95.7% of the awards granted. These outcomes reflect the strong and consistent returns and earnings growth achieved by the business
and how the challenging targets set by the Committee have been perceived by the market. Over the 2015-17 period, ROIC increased from
12.8% to 13.1% while in the eight years since it was introduced as a metric into our multi-year incentives, ROIC has increased from 10.4%
to 13.1%, demonstrating the Group’s commitment to improved returns.
In line with increases for the wider employee population, the Committee has approved 2018 salary increases for the Executive Directors
of 2.5%.
2018 Implementation of simplified Remuneration Policy
In April 2017 our shareholders approved a new remuneration policy for Executive Directors by a vote of 95% of the shares voted. The new
policy simplifies the incentive framework for Executive Directors by reducing the number of incentive plans in which they participate
from four (one annual and three multi-year incentive plans) to two (one annual and one multi-year incentive plan). Accordingly,
commencing with the 2018 grants, the Executive Directors will no longer receive grants under the BIP and the ESOS. A description of the
Remuneration Policy as approved by RELX PLC and RELX NV shareholders at the April 2017 Annual General Meetings is included on
pages 96 to 102 of this Report.
The audited sections of the Report are clearly marked.
Wolfhart Hauser
Chairman, Remuneration Committee
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84
RELX Group Annual reports and financial statements 2017
Annual Remuneration Report
Single Total Figure of Remuneration – Executive Directors (audited)
£’000
Erik Engstrom
Nick Luff
(a)
(b)
(c)
(d)
(e)
(f)
Share based awards
(g)
Total
(h)
Salary
1,189
1,160
700
683
Benefits(4)
84
73
17
15
Annual
incentive
1,238
1,184
726
697
Pension(5)
779
847
204
205
UK statutory
basis(1,3)
6,630
8,135
3,325
3,903
Dutch Civil
Code basis(2)
3,522
3,461
2,027
1,948
UK statutory
basis(1)
9,920
11,399
4,972
5,503
Dutch Civil
Code basis(2)
6,812
6,725
3,674
3,548
2017
2016
2017
2016
(1) UK statutory basis (columns (e) and (g)): These figures are calculated in accordance with the methodology set out in the UK
Regulations. The figure for performance-related share based awards includes share price appreciation since the date the award
was granted. In the case of Erik Engstrom’s figures, the amount included that relates to share price appreciation is £4.2m for 2016
and £2.9m for 2017. For Nick Luff, the amount included that relates to share price appreciation is £1.9m for 2016 and £1.4m for 2017.
The figures for 2016 in column (e) disclosed in last year’s Report were, as required by the UK Regulations, based on an estimate
using prescribed average share prices and exchange rates and have been restated in this Report to reflect the actual amount vested
and the actual share prices and exchange rates on the vesting dates of the 2014-16 cycle of BIP, LTIP and ESOS. The vesting
percentages under these plans were determined on 24 February 2017 and were in line with those disclosed on page 94 in the 2016
Remuneration Report. Using the share prices and exchange rates on the vesting dates and the actual dividend equivalents paid in
respect of this cycle increased the 2016 disclosed figure by £836k for Erik Engstrom and by £529k for Nick Luff.
The 2017 figures reflect the vesting of the 2015-17 cycle of BIP, LTIP and ESOS. As the BIP, LTIP and ESOS vest after the approval date
of this Report, the average share prices and exchange rates for the last quarter of 2017 have been used to arrive at an estimated
figure under the UK statutory basis in respect of these awards.
(2) Dutch Civil Code basis (columns (f) and (h)): These figures comply with the requirements of the Dutch Civil Code. The figures for
share based awards comprise the multi-year incentive charges in accordance with IFRS 2 – Share based Payment. These IFRS 2
charges do not reflect the actual value received on vesting.
(3) Exchange rates used for share based awards (column (e)): The exchange rates used to convert share based awards to pounds
sterling are (i) for the UK statutory basis, those that applied at the vesting dates or, if vesting has not occurred at the time of sign off
of this Report, the average exchange rates for the last quarter of 2017; (ii) for dividend equivalents, the actual gross pounds sterling
payment; and (iii) for estimated dividend equivalents in respect of awards for which vesting has not occurred at the time of sign off
of this Report and which are yet to be paid, the average exchange rates for the last quarter of 2017.
(4) Benefits: Each Executive Director receives a car allowance, private medical/dental insurance and the company meets the cost of
tax return preparation.
(5) Pension: The figures are calculated in accordance with the methodology set out in the UK Regulations. For defined benefit schemes,
in which Erik Engstrom participates, the calculation in the table is reduced by the Director's contributions and participation fee.
For Erik Engstrom both of these charges increase each year. Details of the increases are set out in the Remuneration Policy Report
on page 96. Nick Luff receives a cash allowance in lieu of pension which reduced to 29% of salary effective 1 March 2017 (from 30%
of salary previously) and will reduce by a further two percentage points on 1 March 2018 and 2019 respectively (down to 25% on
1 March 2019).
(6) Total remuneration for Directors: This is set out in note 28 to the consolidated financial statements on pages 158 to 159.
Governance Directors’ Remuneration Report
85
2017 Annual Incentive
Set out below is a summary of performance against each financial measure and the resulting annual incentive payments for 2017
(payable in March 2018):
Relative
weighting
Achievement vs target
Payout as %
of salary
Erik Engstrom
29.6%
Payout as %
of salary
Nick Luff
29.6%
32.1%
32.1%
13.5%
13.5%
29.0%
28.5%
Performance
measure
Revenue
Adjusted net profit
after tax
30%
30%
Cash conversion
10%
Key Performance
Objectives (KPOs)(3)
30%
Revenue was £7,355m versus a target(1) of £7,363m, resulting in
achievement versus target of 99.9% and a payout(2) of 98.5% of 30%.
Adjusted net profit after tax was £1,635m versus a target(1) of £1,624m,
resulting in achievement versus target of 100.7% and a payout(2) of
107.0% of 30%.
Cash flow was £2,192m (96% conversion) versus a target(1) of £2,117m,
resulting in achievement versus target of 103.5% and a payout(2) of
135% of 10%.
The first KPO, related to organic expansion of analytics and decision tools,
was fully achieved.
Erik Engstrom
(six KPOs)
The second KPO, related to specific disposals and exits from joint ventures,
was slightly exceeded.
Key Performance
Objectives (KPOs)(3)
30%
Nick Luff (six KPOs)
The third KPO, related to improvement in the Group’s corporate functions,
was slightly exceeded.
The fourth KPO, related to technology initiatives across the Company, was
fully achieved.
The fifth KPO, related to specific priorities and market segment milestones
and metrics within each business area, was almost fully achieved.
The sixth KPO, related to meeting the quantified targets and completing
the actions listed as 2017 objectives in the Corporate Responsibility Report.
The targets, and achievements against those targets, are summarised
on pages 44 to 51 in this Annual Reports and Financial Statements 2017
and are more fully set out in detail on pages 11 to 67 in the Corporate
Responsibility Report which can be found at www.relx.com/go/CRReport.
This KPO was almost fully achieved.
The first KPO, related to 2017 financial performance and acquisitions and
disposals, was slightly exceeded.
The second KPO, related to tax and accounting matters and procedures,
was fully achieved.
The third KPO, related to achieving specific deliverables on balance sheet
priorities, was slightly exceeded.
The fourth KPO, related to achieving specific deliverables on shareholder
and analyst engagement, was almost fully achieved.
The fifth KPO, related to specific deliverables and metrics for the finance
function including talent development, was fully achieved.
The sixth KPO, related to meeting the quantified targets and completing
the actions listed as 2017 objectives in the Corporate Responsibility Report.
The targets, and achievements against those targets, are summarised
on pages 44 to 51 in this Annual Reports and Financial Statements 2017
and are more fully set out in detail on pages 11 to 67 in the Corporate
Responsibility Report which can be found at www.relx.com/go/CRReport.
This KPO was almost fully achieved.
Total payment
104.2%
£1,238,028
103.7%
£725,528
(1) On an equivalent basis (at actual exchange rates and after the net impact of acquisitions and disposals completed during the year).
(2) For achievement above target, each 0.1% of overachievement increased the payout ratio for that component by 1 percentage point up to a maximum payout ratio
of 150% at 105% achievement versus target. For achievement below target, each 0.1% of underachievement reduced the payout ratio by 1.5 percentage points
down to a threshold payout ratio of 10% at 94% achievement versus target.
(3) The maximum payout for the KPO component is 100% of 30%.
The Board believes that disclosing details beyond the level of specificity that is included above would be commercially sensitive and
would give competitors an unfair insight into our strategic direction and annual execution plans.
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86
RELX Group Annual reports and financial statements 2017
Multi-year incentives (granted under the Remuneration Policy in effect prior to the approval by shareholders of the new
Remuneration Policy at the Annual General Meetings in April 2017)
Multi-year incentives with a performance period ended 31 December 2017 were the 2015 BIP, LTIP and ESOS granted to Executive Directors.
The Committee assessed the performance measures for these awards and made an overall assessment of underlying business
performance and other relevant factors. The vesting outcome resulting from this review is summarised below.
LTIP: 2015-17 cycle performance outcome
Performance
measure
TSR over the three-year performance
period
Weighting
1/3rd
Performance range and
vesting levels set at grant (1)
0%
30%
100%
below median
median
upper quartile
Average growth in adjusted EPS over
the three-year performance period(2)
1/3rd
ROIC in the third year of the
performance period(2)
1/3rd
below 5% p.a.
5% p.a.
6% p.a.
7% p.a.
8% p.a.
9% p.a.
10% p.a.
11% p.a. and above
below 12.3%
12.3%
12.55%
12.8%
13.05%
13.3%
13.55%
13.8% and above
0%
33%
52.5%
65%
75%
85%
92.5%
100%
0%
33%
52.5%
65%
75%
85%
92.5%
100%
Achievement against the
performance range
In upper quartile of
sterling and euro
comparator groups
and just below
the upper quartile
in US dollar
comparator group
7.6% p.a.
Resulting vesting
percentage
93.6%
70.7%
13.8%(3)
100.0%
Total vesting percentage:
88.1%
(1) Calculated on a straight-line basis for performance between the points.
(2) Growth in adjusted EPS at constant currencies and ROIC are calculated as set out in the Chief Financial Officer’s report on pages 54 to 59 and note 11 to the
consolidated financial statements on pages 138 to 139, with adjustments made to remove the effect on ROIC of changes in exchange rates, pension deficits and
accounting standards over the three-year performance period.
(3) For 2017, ROIC on pages 57 to 58 of the Chief Financial Officer’s report of 13.1% equates to 13.8% under the plan methodology, the difference primarily reflecting
changes in exchange rates between 2014 and 2017.
BIP: 2015-17 cycle performance outcome
Performance
measure
Average growth in adjusted EPS over
the three-year performance period(2)
Weighting
50%
ROIC in the third year of the
performance period(2)
50%
Performance range and
vesting levels set at grant (1)
below 4% p.a.
4% p.a.
6.5% p.a.
9% p.a. or above
below 12.3%
12.3%
12.8%
13.3% or above
0%
50%
75%
100%
0%
50%
75%
100%
Achievement against the
performance range
7.6% p.a.
Resulting vesting
percentage
85.7%
13.8%(3)
100.0%
Total vesting percentage:
92.8%
(1) Calculated on a straight-line basis for performance between the points.
(2) Growth in adjusted EPS at constant currencies and ROIC are calculated as set out in the Chief Financial Officer’s report on pages 54 to 59 and note 11 to the
consolidated financial statements on pages 138 to 139, with adjustments made to remove the effect on ROIC of changes in exchange rates, pension deficits and
accounting standards over the three-year performance period.
(3) For 2017, ROIC on pages 57 to 58 of the Chief Financial Officer's report of 13.1% equates to 13.8% under the plan methodology, the difference primarily reflecting
changes in exchange rates between 2014 and 2017.
Governance Directors’ Remuneration Report
87
ESOS: 2015-17 cycle performance outcome
Performance
measure
Average growth in adjusted EPS over
the three-year performance period(2)
Weighting
100%
Performance range and
vesting levels set at grant(1)
below 4% p.a.
4% p.a.
6% p.a.
8% p.a. or above
0%
33%
80%
100%
Achievement against the
performance range
7.6% p.a.
Resulting vesting
percentage
95.7%
(1) Calculated on a straight-line basis for performance between the stated average adjusted EPS growth percentages.
(2) Growth in adjusted EPS at constant currencies is calculated as set out in the Chief Financial Officer’s report on pages 54 to 59 and note 11 to the consolidated
financial statements on pages 138 to 139.
Single Total Figure of Remuneration – Non-Executive Directors (audited)
Total fee
Benefits(1)
Total
Anthony Habgood
Wolfhart Hauser
Adrian Hennah
Marike van Lier Lels(2)
Robert MacLeod
Carol Mills
Linda Sanford
Ben van der Veer(2)
Suzanne Wood(3)
2017
£625,000
£140,000
£90,000
€115,000
£90,000
£101,000
£90,000
€142,500
£24,000
2016
£625,000
£130,808
£90,000
€115,000
£62,423
£72,827
£90,000
€142,500
N/A
2017
£2,381
£780
£780
€958
£780
£1,620
£1,620
€958
2016
£2,305
£780
£780
€1,025
£1,620
€1,025
N/A
2017
£627,381
£140,780
£90,780
€115,958
£90,780
£102,620
£91,620
€143,458
£24,000
2016
£627,305
£131,588
£90,780
€116,025
£62,423
£72,827
£91,620
€143,525
N/A
(1) Benefits comprise the notional benefit of tax filing support provided to Non-Executive Directors for filings outside their home country resulting from their
directorships with the Group. The incremental assessable benefit charge per tax return for 2017 was £840 (unchanged from 2016) for a UK tax return and £780
(unchanged from 2016) for a Netherlands tax return. Anthony Habgood’s benefits also include £1,601 (£1,525 in 2016) in respect of private medical insurance.
Further, the company meets all reasonable travel, subsistence, accommodation and other expenses, including any tax where such expenses are deemed
taxable, incurred by the Non-Executive Directors and the Chairman in the course of performing their duties.
(2) The pounds sterling equivalent of the total fees and benefits for Marike van Lier Lels and Ben van der Veer (converted at the average exchange rate applicable
to the years of reporting) were £101,717 (£95,102 in 2016) and £125,840 (£117,643 in 2016) respectively for 2017. For the purposes of reporting the total fees and
benefits for the two Directors, the pounds sterling benefit relating to the UK tax return preparation has been converted into euros at the average exchange rate
for the relevant year.
(3) Appointed on 26 September 2017.
(4) The total remuneration for Directors is set out in note 28 to the consolidated financial statements on pages 158 to 159.
N/A denotes that the individual was not a Director at the relevant date.
Non-Executive Directors’ fees
The fees in the Single Total Figure table for Non-Executive Directors reflect the following fees in 2017:
Chairman
Non-Executive Directors
Senior Independent Director
Chairman of:
– Audit Committee
– Remuneration Committee
Committee membership fee:
– Audit Committee
– Remuneration Committee
– Nominations Committee
Annual fee 2018
£650,000
£85,000/€97,500
£30,000
Annual fee 2017
£625,000
£75,000/€95,000
£30,000
€37,500
£30,000
€35,000
£25,000
£17,500/€20,000
£17,500
£10,000/€12,500
£15,000/€20,000
£15,000/€20,000
£10,000/€12,500
In addition, effective from 1 January 2018 an intercontinental travel fee of £4,500/€5,000 will be payable to any Non-Executive Director
(excluding the Chairman) in respect of each transatlantic journey made in order to attend a RELX board or committee meeting.
Fees may be reviewed annually, although in practice they have changed on a less frequent basis. At the end of 2017, the Non-Executive
Director and Chairman fees were reviewed against comparative benchmark data; taking account of market practice and general
governance trends. As a result a number of changes were approved which took effect on 1 January 2018 as set out above. Prior to that, the
last review took place during 2015 as a result of which a number of adjustments were made to the fees which took effect on 1 January 2016.
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88
RELX Group Annual reports and financial statements 2017
Total pension entitlements (audited)
Erik Engstrom is a member of the Group’s UK defined benefit
pension arrangements. Mr Engstrom pays a participation fee
on the amount of his pensionable base salary which exceeds
the scheme earnings cap.
This fee was 7% until 28 February 2017, increased to 10% on
1 March 2017 and will be 13% from 1 March 2018. Further details
are provided in the Remuneration Policy on page 96.
Pension – Standard information
Pension – UK statutory basis
Age at
December
2017
54
Normal
retirement
age
60
Director’s
contributions
Participation
fee
£16,582
£98,303
Total of Director’s
contributions and
participation fee
£114,885
Accrued annual
pension at
31 December 2016
£357,912
Accrued annual
pension at
31 December 2017
£402,605
Single figure
pensions value
£778,970(1)
(1) Net of Director’s contribution and participation fee.
Scheme interests awarded during the financial year (audited)
CURRENT MULTI-YEAR INCENTIVE PLANS
Basis on which
award is made
Face value of
award at grant(1)
Value of awards
if vest in line with
expectations(2)
Percentage of maximum that
would be received if threshold
performance achieved(3)
BIP – matching share awards
Erik Engstrom
Opportunity to invest
cash and/or shares
up to value of annual
incentive target
opportunity and
receive up to 1 for 1
matching award
LTIP – performance share awards
Erik Engstrom
250% of salary
Nick Luff
£1,159,686
£776,990
£682,897
£457,541
If one measure pays out at
threshold, the overall payout is
25%. If both measures pay out
at threshold, the overall payout
is 50%.
£2,899,215
£1,449,608
If the measure with the lowest
payout at threshold pays out at
threshold, the overall payout is 3%.
If each measure pays out at
threshold, the overall payout is 32%
31 December
2019
200% of salary
Nick Luff
ESOS – market value options
Erik Engstrom 250% of salary
£1,365,794
£682,897
£2,899,215
£463,874
33%
31 December
2019
Nick Luff
200% of salary
£1,365,794
£218,527
(1) The face value of the LTIP and ESOS awards is calculated using (i) the middle market quotation of a PLC ordinary share (£14.945); (ii) the closing price of a NV
ordinary share (€16.7225); and (iii) the GBP:EUR exchange rate on the trading day before grant (24 February 2017). These share prices are used to determine the
number of awards granted, as well as to set option exercise prices. The face value of the ESOS options shown in this column has not been reduced to reflect the
fact that the aggregate option price is payable on exercise. The face value of the BIP matching award to Erik Engstrom, who invested in NV ADRs, is calculated
using (i) the closing price of a NV ADR ($17.695); and (ii) the GBP:USD exchange rate on the trading day before grant (24 February 2017). The face value for Nick
Luff’s BIP matching award, who invested in PLC and NV ordinary shares, is calculated on the same basis as the LTIP and ESOS face values.
(2) For BIP, LTIP and ESOS, vesting in line with expectations is as per the performance scenario chart disclosed on page 83 of the 2013 Remuneration Report, i.e.
67% for BIP and 50% for LTIP. For ESOS, vesting in line with expectations means that 80% of the face value of the award at grant vests to which a valuation factor
of 20% has been applied.
(3) Threshold payout levels for each measure have been included. Where there are multiple measures, it is possible to achieve threshold, and hence payout, in
respect of just one of the measures (or, for TSR, in respect of one of the three TSR comparator groups).
The LTIP awards granted in 2017 are based on ROIC, EPS and TSR and the 2017 BIP awards on EPS and ROIC, with the respective metrics
weighted equally in each plan and assessed independently. The targets and vesting scales applicable to these awards are set out on
page 103 of the 2016 Remuneration Report. In respect of ESOS awards granted in 2017, 33% of the award vests for achieving average
growth in adjusted EPS over the three-year performance period of 4% p.a.; 80% vests for 6% p.a. and 100% for 8% p.a.
End of
performance
period
31 December
2019
Governance Directors’ Remuneration Report
89
External appointments
The Committee believes that the experience gained by allowing
Executive Directors to serve as Non-Executive Directors on the
boards of other organisations is of benefit to the Group.
Accordingly, Executive Directors may, subject to the approval
of the Chairman and the CEO (or the Chairman only in the case of
the CEO), serve as Non-Executive Directors on the boards of up
to two non-associated companies (of which only one may be a
major company) and they may retain remuneration arising from
such appointments.
Erik Engstrom is a Non-Executive Director of Smith & Nephew plc
and received fees of £75,135 for 2017 (£71,785 in 2016).
Statement of Directors’ shareholdings and other share interests
(audited)
Shareholding requirement
The Committee believes that a closer alignment of interests can
be created between senior management and shareholders if
executives build and maintain a significant personal stake in the
Group. The shareholding requirements applicable to the Executive
Directors are set out in the table below. Shares that count for this
purpose are any type of RELX PLC or RELX NV security of which
the Director, their spouse, civil partner or dependent child has
beneficial ownership on an unencumbered basis. There has been
no change to the interests reported below between 31 December
2017 and 14 February 2018.
Nick Luff was a Non-Executive Director of Lloyds Banking Group
plc until 11 May 2017. He received fees of £69,007 for 2017
(£165,000 in 2016).
Meeting the shareholding requirement is both a vesting condition
for awards granted and a requirement to maintain eligibility for
future awards.
Payments to past Directors and payments for loss of office
(audited)
Robert Polet and Lisa Hook who retired from the Boards on
21 April 2016 received tax return preparation assistance of £1,620
and £840 respectively. There have been no payments for loss of
office in 2017.
On 31 December 2017, the Executive Directors’ shareholdings
were as follows (valued using the middle market closing prices
of the relevant securities):
Shareholding
requirement (% of
31 December 2017
annual base salary)
400%
300%
Actual shareholding
as at 31 December 2017
(% of 31 December 2017
annual base salary)
1,466%
637%
Erik Engstrom
Nick Luff
Share interests (number of shares held)
Erik Engstrom
Anthony Habgood
Wolfhart Hauser
Adrian Hennah
Marike van Lier Lels
Nick Luff
Robert MacLeod
Carol Mills
Linda Sanford
Ben van der Veer
Suzanne Wood (from 26 September 2017)
N/A denotes that the individual was not a Director at the relevant date.
RELX PLC ordinary shares
31 December
1 January
2017
2017
200,490
160,036
50,000
50,000
11,542
11,542
10,508
10,508
100,010
3,250
6,500
6,700
124,847
6,950
9,700
6,700
N/A
3,500
RELX NV ordinary shares
31 December
1 January
2017
2017
804,181
803,742
38,450
38,450
3,091
3,091
3,000
108,960
8,000
136,095
3,000
10,766
N/A
3,000
10,766
TOTAL RELX ordinary shares
31 December
2017
1,004,671
88,450
14,633
10,508
8,000
260,942
6,950
9,700
9,700
10,766
3,500
1 January
2017
963,778
88,450
14,633
10,508
3,000
208,970
3,250
6,500
9,700
10,766
N/A
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90
RELX Group Annual reports and financial statements 2017
Multi-year incentive interests (audited)
The tables below and on page 91 set out vested but unexercised and unvested options and unvested share awards held by the Executive
Directors including details of options and awards granted and options exercised and options and awards vested during the year of reporting.
All outstanding unvested options and share awards are subject to performance conditions. For disclosure purposes, any PLC and NV
ADRs awarded under the multi-year plans are included as ordinary shares. Between 31 December 2017 and the date of this Report,
there have been no changes in the options or share awards held by the Executive Directors.
Erik Engstrom
OPTIONS
Year of
grant
2013
2014(1)
2015
2016
2017
Type of
security
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
ESOS
Total PLC ords
Total NV ords
No. of
options
held on
1 Jan
2017
178,799
191,230
145,604
158,166
119,771
126,358
112,690
119,312
556,864
595,066
No. of
options
granted
during
2017
96,996
102,405
96,996
102,405
Option
price on
date of
grant
£7.345
€8.147
£9.245
€10.286
£11.520
€15.003
£12.550
€15.285
£14.945
€16.723
No. of
options
exercised
during
2017
178,799
191,230
Market
price per
share at
exercise
£15.038
€16.665
178,799
191,230
No. of
options
held on
31 Dec
2017
145,604
158,166
119,771
126,358
112,690
119,312
96,996
102,405
475,061
506,241
Unvested
options
vesting in
Options
exercisable
until
07 Apr 24
07 Apr 24
02 Apr 25
02 Apr 25
15 Mar 26
15 Mar 26
27 Feb 27
27 Feb 27
Apr 18
Apr 18
Mar 19
Mar 19
Feb 20
Feb 20
(1) The performance outcome for the ESOS 2014 was disclosed on page 94 of the 2016 Remuneration Report.
SHARES
BIP
LTIP
Total PLC ords
Total NV ords
Year of
grant
2014(1)
2015
2016
2017
2014(1)
2015
2016
2017
Type of
security
NV ord
NV ord
NV ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
No. of
unvested
shares
held on
1 Jan 2017
125,174
97,607
94,965
145,604
158,166
119,771
126,359
112,690
119,312
378,065
721,583
No. of
shares
awarded
during
2017
81,781
96,996
102,405
96,996
184,186
Market
price per
share at
award
€10.286
€15.003
€15.285
€16.723
£9.245
€10.286
£11.520
€15.003
£12.550
€15.285
£14.945
€16.723
No. of
unvested/
non-
performance
tested
shares
held on
31 Dec 2017
No. of shares
vested/
performance
tested during
2017
123,083
Market price
per share at
vesting/
performance
testing
€16.723
End of
performance
period
Date of
release
97,607
94,965
81,781
Dec 2017 H1 2018
Dec 2018 H1 2019
Dec 2019 H1 2020
Dec 2017 H1 2018
Dec 2017 H1 2018
Dec 2018 H1 2019
Dec 2018 H1 2019
Dec 2019 H1 2020
Dec 2019 H1 2020
119,771
126,359
112,690
119,312
96,996
102,405
329,457
622,429
136,707
148,502
£14.945
€16.723
271,585
136,707
(1) The performance outcomes for the BIP and LTIP 2014 were disclosed on page 94 of the 2016 Remuneration Report.
Governance Directors’ Remuneration Report
91
No. of
options
exercised
during
2017
Market
price per
share at
exercise
Nick Luff
OPTIONS
ESOS
Total PLC ords
Total NV ords
Year of
grant
2014(1)
2015
2016
2017
Type of
security
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
No. of
options
held on
1 Jan
2017
65,656
72,228
56,423
59,526
53,087
56,207
175,166
187,961
No. of
options
granted
during
2017
45,694
48,242
45,694
48,242
Option
price on
date of
grant
£9.900
€11.378
£11.520
€15.003
£12.550
€15.285
£14.945
€16.723
(1) The performance outcome for the ESOS 2014 was disclosed on page 94 of the 2016 Remuneration Report.
SHARES
BIP
Year of
grant
2014(1)
2015
2016
2017
LTIP
2014(1)
2015
2016
2017
Total PLC ords
Total NV ords
Type of
security
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
PLC ord
NV ord
No. of
unvested
shares
held on
1 Jan 2017
32,630
35,174
28,187
29,520
26,543
28,103
65,656
72,229
56,423
59,526
53,087
56,207
262,526
280,759
No. of
shares
awarded
during
2017
22,847
24,121
45,694
48,242
68,541
72,363
Market
price per
share at
award
£9.900
€11.378
£11.520
€15.003
£12.550
€15.285
£14.945
€16.723
£9.900
€11.378
£11.520
€15.003
£12.550
€15.285
£14.945
€16.723
No. of shares
vested/
performance
tested during
2017
32,085
34,586
Market price
per share at
vesting/
performance
testing
£14.945
€16.723
61,644
67,815
£14.945
€16.723
93,729
102,401
(1) The performance outcomes for the BIP and LTIP 2014 were disclosed on page 94 of the 2016 Remuneration Report.
No. of
options
held on
31 Dec
2017
65,656
72,228
56,423
59,526
53,087
56,207
45,694
48,242
220,860
236,203
No. of
unvested/
non-
performance
tested
shares
held on
31 Dec 2017
Unvested
options
vesting in
Apr 18
Apr 18
Mar 19
Mar 19
Feb 20
Feb 20
Options
exercisable
until
02 Sep 24
02 Sep 24
02 Apr 25
02 Apr 25
15 Mar 26
15 Mar 26
27 Feb 27
27 Feb 27
End of
performance
period
Date of
release
28,187
29,520
26,543
28,103
22,847
24,121
Dec 2017 H1 2018
Dec 2017 H1 2018
Dec 2018 H1 2019
Dec 2018 H1 2019
Dec 2019 H1 2020
Dec 2019 H1 2020
Dec 2017 H1 2018
Dec 2017 H1 2018
Dec 2018 H1 2019
Dec 2018 H1 2019
Dec 2019 H1 2020
Dec 2019 H1 2020
56,423
59,526
53,087
56,207
45,694
48,242
232,781
245,719
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92
RELX Group Annual reports and financial statements 2017
Performance graphs
The graphs below show total shareholder returns for RELX PLC and RELX NV, calculated on the basis of the average share price in
the 30 trading days before the respective year end and assuming dividends were reinvested. RELX PLC’s performance is compared
with the FTSE 100 and RELX NV with the AEX Index (to reflect their respective memberships of those indices). The three-year charts
cover the performance period of the 2015-17 cycle of the LTIP.
3 years
RELX PLC vs FTSE 100 – 3-YEAR TSR
RELX NV vs AEX – 3-YEAR TSR
%
200
175
150
125
100
75
50
25
0
5 years
+72%
∆=45%
+27%
D ec-14
RELX PLC
D ec-15
D ec-16
FTSE 100
D ec-17
%
200
175
150
125
100
75
50
25
0
+65%
∆=21%
+44%
D ec-14
RELX NV
D ec-15
D ec-16
AEX Index
D ec-17
RELX PLC vs FTSE 100 – 5-YEAR TSR
RELX NV vs AEX – 5-YEAR TSR
%
400
350
300
250
200
150
100
50
0
+211%
∆=158%
+53%
%
400
350
300
250
200
150
100
50
0
+212%
∆=124%
+88%
D ec-12
D ec-13
RELX PLC
D ec-14
D ec-15
D ec-16
FTSE 100
D ec-17
D ec-12
D ec-13
RELX NV
D ec-14
D ec-15
D ec-16
AEX Index
D ec-17
10 years
RELX PLC vs FTSE 100 – 10-YEAR TSR
RELX NV vs AEX – 10-YEAR TSR
%
400
350
300
250
200
150
100
50
0
+279%
∆=208%
+71%
%
400
350
300
250
200
150
100
50
0
+237%
∆=184%
+53%
D ec-07
D ec-08
D ec-09
D ec-10
D ec-11
D ec-12
D ec-13
D ec-14
D ec-15
D ec-16
D ec-17
D ec-07
D ec-08
D ec-09
D ec-10
D ec-11
D ec-12
D ec-13
D ec-14
D ec-15
D ec-16
D ec-17
RELX PLC
FTSE 100
RELX NV
AEX Index
UK Regulations require disclosure of the relative share performance for the nine calendar years ended 31 December 2017, of
RELX PLC. During that period the total return for the FTSE 100 was 148% while TSR for RELX PLC was 364%, an outperformance
of 216 percentage points.
Governance Directors’ Remuneration Report
93
CEO historical pay table
The table below shows the historical CEO pay over a ten-year period. The year 2008 has been included to show the pre-2009 position,
as 2009 was a transition year with three CEO incumbents.
£’000
CEO
Annualised
base salary
Annual incentive
payout as a %
of maximum
Multi-year
incentive vesting
as a % of
maximum
CEO total (UK)
statutory basis)(1)
CEO total (Dutch
Civil Code basis)(2)
2008
2009(3)
2010
2011
2012
2013
2014
2015
2016
2017
Sir Crispin
Davis
1,181
Sir Crispin
Davis
1,181
Ian
Smith
900
Erik
Engstrom
1,000
Erik
Engstrom
1,000
Erik
Engstrom
1,025
Erik
Engstrom
1,051
Erik
Engstrom
1,077
Erik
Engstrom
1,104
Erik
Engstrom
1,131
Erik
Engstrom
1,160
Erik
Engstrom
1,189
61%
30%
37%
71%
67%
66%
73%
70%
71%
70%
68%
69%
100%
0%
0%
0%
0%
0%
70%(4)
96%(4)
90%(4)
97%(4)
97%(4)
92%(4)
7,193
706
1,033
426
3,140
2,738
11,145(5)
5,463
17,447(6) 11,416(7) 11,399(8)
9,920
6,631
(514)
1,033
431
2,675
5,045
5,443
6,100
6,839
6,412
6,725
6,812(9)
(1) UK statutory basis: This is described in footnote (1) to the Single Total Figure of Remuneration table on page 84.
(2) Dutch Civil Code basis: This is described in footnote (2) to the Single Total Figure of Remuneration table on page 84.
(3) Sir Crispin Davis was CEO from 1 January to 31 March, Ian Smith was CEO from 1 April to 10 November and Erik Engstrom was CEO from 11 November to
31 December.
(4) The 2017, 2016 and 2015 percentages reflect BIP, LTIP and ESOS. The 2014 percentage reflects the final tranche of the discontinued Reed Elsevier Growth Plan
(REGP), BIP and ESOS. The 2013 percentage reflects BIP and ESOS only and the 2012 figure reflects BIP and the first tranche of the discontinued REGP.
(5) The 2012 figure reflects the vesting of the first tranche of the discontinued REGP and includes the entire amount that was performance tested over the 2010-12
period, including the 50% of shares deferred until 2015 in accordance with the plan rules including £3m attributed to share price appreciation.
(6) The 2014 figure includes the vesting of the second and final tranche of the discontinued REGP and includes £8.8m attributed to share price appreciation.
(7) The 2015 figure includes £4.4m attributed to share price appreciation.
(8) The 2016 figure includes £4.2m attributed to share price appreciation. The UK statutory basis has been restated for actual share prices and exchange rates
applicable on the dates of vesting (see page 84 for further detail).
(9) The 2017 figure includes £2.9m attributed to share price appreciation.
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RELX Group Annual reports and financial statements 2017
Comparison of change in CEO pay with change in employee pay
The table below shows the percentage change in remuneration
(salary, benefits and annual incentive) from 2016 to 2017 for the
CEO compared with the average employee.*
% change from 2016 to 2017
Salary
Benefits
Annual incentive
CEO
2.5%
15.8%(2)
4.6%
Average
employee(1)
2.5%
2.5%
5.8%
(1) This reflects a substantial proportion of our global employee population.
(2) The increase relates to an increase in the deemed benefit of tax return
preparation services. Services provided to Mr Engstrom have not changed.
* From financial year 2017, the new Dutch Corporate Governance Code
recommends companies describe pay ratios within the company.
Total employee costs are disclosed below; remuneration for the CEO
is disclosed on page 84 and the total average number of employees (on a full
time equivalent basis) during 2017 was 31,200. The Committee believes these
disclosures provide a meaningful description of the relative pay of the CEO
compared with that of the average employee.
Relative importance of spend on pay
The following table sets out the total employee costs for all
employees, as well as the amounts paid in dividends and share
repurchases.
in respect of one-third of the TSR measure. The proportion of the
TSR measure that vests will be the sum of the three payouts.
The averaging period applied for TSR measurement purposes is
the three months before the start of the financial year in which the
award is granted and the last three months of the third financial
year of the performance period.
The companies for the 2018-20 LTIP cycle were selected on the
following basis (unchanged from prior year):
(a)
they were in a relevant market index or were the largest listed
companies on the relevant exchanges at the end of the year
before the start of the performance period: the FTSE 100 for
the sterling group; the Euronext100 (including the AEX) and
DAX30 for the euro group; and the S&P 500 for the US dollar
group;
(b) certain companies were then excluded:
• those with mainly domestic revenues (as they do not reflect
the global nature of the Group’s customer base);
• those engaged in extractive industries (as they are exposed
to commodity cycles); and
• financial services companies (as they have a different risk/
reward profile).
Employee costs(1)
Dividends
Share repurchases
2017 (£m)
2,273
762
700
2016 (£m)
2,114
683
700
% change
+8%
+12%
–
(c)
the remaining companies were then ranked by market
capitalisation and, for each comparator group, approximately
40 companies with market capitalisations above and below
that of the Group were taken; and
(1) Employee costs include wages and salaries, social security costs,
pensions and share based and related remuneration. After adjusting for
fluctuations in the Group’s principal currencies, employee costs rose 3%
in constant currency.
(d) relevant listed global peers operating in businesses similar
to those of the Group but not otherwise included were added.
Each comparator group comprises approximately 40 companies.
Implementation of remuneration policy in 2018
Salary: The Committee has awarded a salary increase of 2.5% to
each Executive Director, which means that, from 1 January 2018,
Erik Engstrom’s salary rose to £1,218,403 and Nick Luff’s salary
to £717,478. This is in line with the guidelines agreed for employees
in the Group’s most significant locations globally for 2018.
AIP: The operation of the AIP in 2018 changes in accordance
with the terms of the new policy set out on page 97 of this Report.
Details of the 2018 annual financial targets and KPOs will be
disclosed in the 2018 Remuneration Report.
LTIP: In accordance with the terms of the new policy, we will
be granting LTIP awards with a face value of 450% of salary to
Erik Engstrom and 375% to Nick Luff (see page 98). The awards
are subject to a three-year performance period and the net
(after tax) vested shares are to be retained for a further two-year
holding period.
The following metrics, weightings, targets and vesting scales
apply to LTIP awards granted in 2018.
The vesting of LTIP awards is dependent on three separate
performance measures: TSR, EPS and ROIC, weighted
20%:40%:40% respectively and assessed independently.
The TSR measure comprises three comparators (sterling, euro
and US dollar) reflecting the fact that the Group accesses equity
capital markets through three exchanges – London, Amsterdam
and New York – in three currency zones. The Group’s TSR
performance is measured separately against each comparator
group and each ranking achieved will produce a payout, if any,
Vesting percentage of each third
of the TSR tranche*
0%
25%
100%
TSR ranking within the relevant
TSR comparator group
Below median
Median
Upper quartile
* Vesting is on a straight-line basis for performance between the minimum and
maximum levels.
The calculation methodology for the EPS and ROIC measures is
set out in footnotes (2) and (3) on page 86 and the 2013 Notices of
Annual General Meetings, which can be found on the Group’s
website. The targets and vesting scales applicable to the EPS and
ROIC tranches of the 2018 LTIP awards reflect the company’s
approach to acquisitions, disposals and share buybacks and are
set out below.
Vesting percentage
of EPS and ROIC
tranches*
0%
25%
50%
65%
75%
85%
92.5%
100%
Average growth
in adjusted EPS over
the three-year
performance period
below 5% p.a.
5% p.a.
6% p.a.
7% p.a.
8% p.a.
9% p.a.
10% p.a.
11% p.a. or above
ROIC in the third
year of the
performance period
below 12.0%
12.0%
12.4%
12.8%
13.2%
13.6%
14.0%
14.4% or above
* Vesting is on a straight-line basis for performance between the stated average
adjusted EPS growth/ROIC percentages.
Governance Directors’ Remuneration Report
95
Remuneration Committee advice
The Committee consists of independent Non-Executive Directors
and the Chairman of RELX Group plc. Details of members and
their attendance are contained in the Corporate Governance
section on page 77. The Chief Legal Officer & Company Secretary
attends meetings as secretary to the Committee. At the
invitation of the Chairman of the Committee, the CEO of
RELX Group plc attends appropriate parts of the meetings.
The CEO of RELX Group plc is not in attendance during discussions
about his remuneration.
The Human Resources Director advised the Committee during
the year.
Willis Towers Watson is the external adviser, appointed by the
Committee through a competitive process. Willis Towers Watson
also provided actuarial and other human resources consultancy
services to some Group companies during the year. The Committee
is satisfied that the firm’s advice continues to be objective and
independent, and that no conflict of interest exists. The individual
consultants who work with the Committee do not provide advice
to the Executive Directors, or act on their behalf. Willis Towers
Watson is a member of the Remuneration Consultants’ Group and
conducts its work in line with the UK Code of Conduct for executive
remuneration consulting. During 2017, Willis Towers Watson
received fees of £14,489 for advice given to the Committee,
charged on a time and expense basis.
Shareholder voting at 2017 Annual General Meetings
At the Annual General Meeting of RELX NV, on 19 April 2017, votes cast by proxy and at the meeting in respect of the Directors’
remuneration were as follows:
Resolution
Amendments to the Remuneration Policy
(binding)
Amendments to the RELX Group plc
Long-Term Incentive Plan (binding)
Addition of a deferred share element to
the Annual Incentive Plan (binding)
Votes For
670,276,345
% For
95.70%
Votes Against
30,141,484
% Against
Total votes cast
4.30% 700,417,829
Votes Withheld
5,371,474
675,218,276
96.19%
26,749,717
3.81% 701,967,993
3,821,310
692,611,396
98.23%
12,504,128
1.77% 705,115,524
673,779
At the Annual General Meeting of RELX PLC, on 20 April 2017, votes cast by proxy and at the meeting in respect of the Directors’
remuneration were a s follows:
Votes For
788,804,530
787,817,896
% For
94.95%
94.61%
Votes Against
41,992,841
44,903,327
% Against
Total votes cast
5.05% 830,797,371
5.39% 832,721,223
Votes Withheld
26,762,399
24,841,362
772,674,562
92.88%
59,274,998
7.12% 831,949,560
25,619,005
Resolution
Remuneration Policy (binding)
Amendments to the RELX Group plc
Long-Term Incentive Plan (binding)
Remuneration Report (advisory)
Wolfhart Hauser
Chairman, Remuneration Committee
14 February 2018
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96
RELX Group Annual reports and financial statements 2017
Remuneration Policy Report
Set out in this section is a description of the company’s remuneration policy for Directors, as approved by RELX PLC and RELX NV
shareholders at the April 2017 Annual General Meetings. (Its wording has been updated solely to reflect the passage of time since the
policy was first published.) The original wording, as first published, can be found on pages 84 to 90 of the 2016 Annual Reports and
Financial Statements.
Remuneration policy table – Executive Directors
All footnotes to the policy table can be found on pages 98 to 99.
ANNUAL BASE SALARY
Purpose and link to strategy
To recruit and retain the best executive talent globally to execute our strategic objectives at appropriate cost.
Operation
Salaries for Executive Directors are set and reviewed annually by the Remuneration Committee (the Committee) with changes typically
taking effect on 1 January. In exceptional circumstances, the Committee may review salaries more frequently.
When reviewing salaries, the Committee considers the executive’s role and sustained value to the company in terms of skill, experience
and overall contribution and the company’s guidelines for salaries for all employees for the year. Periodically, competitiveness with
companies which are comparable in respect of industry, size, international scope and complexity is also considered in order to ensure
the company’s ability to attract and retain executives.
For the last six years, Executive Directors’ salary increases have been 2.5% per annum.
Performance framework
N/A
Maximum value
Salary increases to Executive Directors will remain within the range of increases for the wider employee population. However, the
Committee has discretion to exceed this to take account of individual circumstances such as change in responsibility, increases in scale
or complexity of the business, inflation or alignment to market level.
Recovery of sums paid
No provision.
RETIREMENT BENEFITS
Purpose and link to strategy
Retirement plans are part of remuneration packages designed to recruit and retain the best executive talent at appropriate cost.
Operation
Our policy is to offer competitive long-term sustainable defined contribution plans. Any amount above applicable limits, for example
HMRC’s annual allowance in the UK, will be paid in cash and will be subject to tax and social security deductions. In certain
circumstances, executives can take cash instead of pension contributions.
The UK defined benefit schemes are closed to new hires. Continued membership of legacy defined benefit schemes requires annual
increases to contributions and participation fees from all members, who have a choice to switch to the defined contribution plan at any time.
The CEO is a member of a UK legacy defined benefit pension arrangement, accruing 1/30th of final year pensionable earnings for each year
(pro-rated for part years) of service, with a normal retirement age of 60. In line with all UK defined benefit scheme members, the CEO’s
contributions have been increasing annually since 2011 and were 11% of pensionable earnings up to the base scheme’s earnings cap as
of 1 March 2017. The contribution rate increases by two percentage points each year during the policy period to 13% as of 1 March 2018,
15% as of 1 March 2019 and 17% as of 1 March 2020. The CEO also pays a participation fee which, from 1 March 2017, was 10% of the
amount of his pensionable earnings in excess of the base scheme’s earnings cap. The participation fee increases by three percentage
points each year during the policy period to 13% as of 1 March 2018, 16% as of 1 March 2019 and 19% as of 1 March 2020. In addition,
since March 2017, a cap applies of 2% per annum on the increase in the CEO’s pensionable earnings.
Performance framework
N/A
Maximum value
Defined contribution plan – maximum company contribution of 25% of salary per annum or equivalent cash in lieu. The CFO received
30% of salary under an arrangement which was made pursuant to the previous remuneration policy, which contained a 30% of salary
maximum. During the policy period, the CFO’s company contribution decreases by one percentage point to 29% from March 2017, by
two percentage points to 27% from March 2018 and by a further two percentage points to 25% from March 2019.
Defined benefit scheme – accrual of 1/30th of final year pensionable earnings for every year of service up to a maximum of 2/3rds of
pensionable earnings. As noted above under “Operation”, the CEO is subject to increases in his contributions and in the participation fee,
as well as a cap on annual increases in pensionable earnings, as part of his ongoing membership of this scheme.
Recovery of sums paid
No provision.
Governance Directors’ Remuneration Report
97
OTHER BENEFITS
Purpose and link to strategy
To provide competitive benefits at appropriate cost.
Operation
Other benefits, subject to periodic review, may include private medical and dental cover, life assurance, tax return preparation costs, car
benefits, directors’ and officers’ liability insurance, relocation benefits and expatriate allowances and other benefits available to employees
generally, including, where appropriate, the tax on such benefits.
Performance framework
N/A
Maximum value
The maximum for ongoing benefits for Executive Directors will not normally exceed 10% of salary (excluding relocation benefits and
any tax related charge on benefits which is met by the company). However, the Committee may provide reasonable benefits beyond this
amount in exceptional situations, such as a change in the individual’s circumstances caused by the company, or if there is a significant
increase in the cost of providing the agreed benefit.1
Recovery of sums paid
No provision.
AIP (ANNUAL INCENTIVE PLAN)
Purpose and link to strategy
The annual incentive provides focus on the delivery of annual financial targets and the achievement of annual objectives and milestones
which are chosen to align with the company’s strategy and create a platform for sustainable future performance. The compulsory
deferral of one-third of any annual incentive earned into RELX shares for three years promotes longer-term alignment of Executive
Directors’ interests with shareholders’ interests, including an element of post-termination shareholding.
Why performance measures are chosen and how targets are set
Performance measures include a balanced set of financial targets and Key Performance Objectives (KPOs), which are appropriately
weighted and which support current strategy and incentivise the Executive Directors to achieve the desired outcomes without undue
risk of focusing on any one financial measure.
The targets are designed to be challenging. They are set with reference to the previous year’s performance and internal and external
forecasts for the following year.
Operation
The Committee reviews and sets the financial targets and KPOs annually, taking into account internal forecasts and strategic plans.
It approves four to six KPOs for each Executive Director, reflecting critical business priorities for which each is accountable. At least one
KPO will relate to the achievement of sustainability targets.
Following year end, the Committee compares actual performance with the financial targets and assesses the achievement of individual
KPOs. Two-thirds of any annual incentive earned is paid in cash to the Executive Director and the remaining one-third is deferred into
RELX shares, which are not released to the Executive Director for three years.
Dividend equivalents accrued during the deferral period are payable in respect of the shares that vest.
On a change in control, the default position is that deferred shares vest. Alternatively, the Committee may determine that deferred
shares will not vest and will instead be exchanged for equivalent awards in the acquiring company.
Performance framework
The measures include financial targets, which have a weighting of at least 70%, and individual KPOs, with each element assessed separately.
§ The minimum payout is zero.
§ If threshold is reached for each of the financial measures, the overall payout for the financial measures is 10.5% of salary. If the
financial measure with the lowest weighting pays out at threshold and the others do not pay out at all, the overall payout for financial
measures is 1.5% of salary. There is no threshold level for KPOs.
§ Payout for target performance is 150% of salary.
Following an assessment of achievement and scoring of KPOs, the Committee agrees the overall level of earned incentive for each
Executive Director.
Committee discretion applies.2,3,4
Maximum value
The maximum potential annual incentive is 200% of annual base salary. This includes the deferred share element but excludes dividend
equivalents payable in respect of the deferred shares.
Recovery of sums paid
Claw-back applies.5
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RELX Group Annual reports and financial statements 2017
LONG TERM INCENTIVE PLAN
Purpose and link to strategy
The Long Term Incentive Plan (LTIP) is designed to provide a long-term incentive for Executive Directors to achieve the key performance
measures that support the company’s strategy, and to align their interests with shareholders.
Why performance measures are chosen and how targets are set
Our strategic focus is on continuing to transform the core business through organic investment and the build out of new products into
adjacent markets and geographies, supplemented by selective portfolio acquisitions and divestments. The performance measures in the
LTIP are chosen to support this strategy by focusing on sustained earnings growth, return on invested capital and shareholder return.
Targets are set with regard to previous results and internal and external forecasts for the performance period and the strategic plan for
the business. They are designed to provide exceptional reward for exceptional performance, whilst allowing a reasonable expectation
that reward at the lower end of the scale is attainable, subject to robust performance.
Operation
Annual awards of performance shares, with vesting subject to:
§ performance measured over three financial years
§ continued employment (subject to the provisions set out in the Policy on payments for loss of office section)
§ meeting shareholding requirements (400% of salary for the CEO and 300% of salary for the CFO)
Executive Directors are to retain their net (after tax) vested shares for a holding period of two years after vesting.
Dividend equivalents accrued during the performance period are payable in respect of the performance shares that vest.
On a change of control, the default position is that awards vest on a pro-rated basis, subject to an assessment of performance against targets
at that time. Alternatively, the Committee may determine that the awards will not vest and will instead be exchanged for equivalent awards in
the acquiring company.
Performance framework
The performance measures are EPS, ROIC and relative TSR, weighted 40%:40%:20% respectively and assessed independently,
such that a payout can be received under any one of the measures (or, for TSR, in respect of one of the three comparator groups).
§ The minimum payout is zero.
§ If each of the measures vests at threshold, the overall payout is 25% of the award. If the measure with the lowest weighting vests
at threshold and the others do not vest at all, the overall payout is 2% of the award.
§ Payout in line with expectations is 50% of the maximum award.
Dividend equivalents are not taken into account in the above payout levels.
Committee discretion applies.2,3,4
Maximum value
The maximum grant in any year is up to 450% of base salary for the CEO and up to 375% of base salary for other Executive Directors
(not including dividend equivalents).
Recovery of sums paid
Claw-back applies.5
1. Other benefits: Maximum value was increased from 5% under the previous policy to 10% under the current policy to reflect increases in the cost of providing the
agreed benefits. The level of benefits provided to Executive Directors was not changed.
2. Discretion in respect of AIP and LTIP payout levels: In determining the level of payout under the AIP and vesting under the LTIP, the Committee takes into account
RELX’s overall business performance and value created for shareholders over the period in review and other relevant factors. It has discretion to adjust the
vesting and payout levels (subject always to the maximum individual limits) if it believes this would result in a fairer outcome. This discretion will only be used in
exceptional circumstances and the Committee will explain in the next Remuneration Report the extent to which it has been exercised and the reasons for doing so.
3. Discretion to vary performance measures under the AIP and the LTIP: The Committee may vary the financial measures applying to a current annual incentive
year and performance measures for LTIP awards already granted if a change in circumstances leads it to believe that the arrangement is no longer a fair
measure of performance. Any new measures will not be materially less, or more, challenging than the original ones.
4. Discretion on termination of employment under the AIP and the LTIP: The Committee’s discretion on termination of employment is described under the
“Policy on payments for loss of office” section on page 101.
5. Malus and claw-back under the AIP and the LTIP: Under the AIP and the LTIP, the Committee has discretion to apply malus and claw-back (i) if the payout
(including the AIP deferred shares element) was calculated on the basis of materially misstated financial or other data, in which case it can withhold a payout
and can seek to recover the difference in value between the incorrect payout and the amount that would have been paid had the correct data been used or (ii) if
there has been serious misconduct on the part of the individual, in which case the Committee may withhold an AIP payout, lapse unvested LTIP awards and may
require repayment of AIP and LTIP gains arising during a specified period. Under the LTIP, the Committee also has discretion to apply malus and claw-back if a
participant breaches post-termination restrictive covenants, in which case unvested awards would lapse and the Committee may require repayment of gains
arising during the period beginning six months before termination and ending on the date the post-termination restrictive covenants are stated to expire.
Serious misconduct has been added as a trigger event under the AIP and the LTIP since the previous policy to increase the circumstances in which we can apply
malus and claw-back.
Governance Directors’ Remuneration Report
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6. Explanation of differences between the company’s policy on Executive Directors’ remuneration and the policy for other employees: Incentives: A larger
percentage of Executive Directors’ remuneration is performance related than that of other employees. All managers participate in an annual incentive plan,
but participation levels, measures and targets vary according to their role, seniority and local business priorities. Approximately 100 senior executives
currently participate in the LTIP and about 1,000 participate in the Executive Share Option Scheme (ESOS). Grant levels under the plans vary according to role
and seniority. In considering the remuneration policy for Executive Directors, under which the Executive Directors only participate in the AIP and the LTIP, the
Committee considered the incentive plan participation for the wider senior management population. Other benefits: The range and level of retirement and other
benefits provided to employees vary according to role, seniority and local market practice. This is to ensure that we provide competitive packages which are
appropriate to specific roles. In reducing the maximum company contribution for Executive Directors under the defined contribution pension plan, the
Committee took into account the contribution rates for Executive Directors and for the wider employee population.
7. Changes to pay components: The changes which were made since the previous remuneration policy, together with the rationale for the changes, are described
in the Committee Chairman’s introduction on pages 81 to 83 of the Annual Reports and Financial Statements 2016 and in notes 1 and 5 above.
Remuneration outcomes in different performance scenarios
The Committee considers the level of remuneration that may be paid in the context of the performance delivered and value added for
shareholders. The charts below are an illustration of how the CEO’s and CFO’s regular annual remuneration could vary under different
performance scenarios. The salary, benefits and pension levels are the same in all three scenarios in each chart. Salary is based on
2017 salary. Benefits is based on the 2016 Single Total Figure table. Pension, annual incentive and LTIP are all based on the policy table’s
award levels and percentages applied to the 2017 salary. Annual incentive amounts include the one-third portion which is subject to
compulsory deferral into RELX shares for three years, although the deferral portion is separately identified within the annual incentive
amount in the charts. The performance assumptions which have been used are as follows: Minimum means no AIP payout and no
LTIP vesting. In line with expectations means AIP payout at 150% of salary (of which one-third is deferred into shares) and LTIP vesting
at half of the award. Maximum means AIP payout at 200% of salary (of which one-third is deferred into shares) and LTIP vesting at 100%
of the award.
No share price movement is assumed and any dividend equivalents payable in respect of the AIP deferred shares and the LTIP are
not included.
CEO REMUNERATION (£’000)
CFO REMUNERATION (£’000)
9,664
6,395
55%
42%
28%
25%
1,937
100%
30%
20%
Minimum
In line with
expectations
Maximum
LTIP
LTIP
AIP deferred
AIP deferred shares
AIP cash
AIP cash
Salary, benefits, pension
Salary, benefits, pension
LTIP
AIP deferred shares
AIP cash
Salary, benefits, pension
3,253
40%
32%
28%
890
100%
4,915
53%
29%
18%
Minimum
In line with
expectations
Maximum
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RELX Group Annual reports and financial statements 2017
Approach to recruitment remuneration – Executive Directors
When agreeing the components of a remuneration package on the appointment of a new Executive Director, or an internal promotion to
the Board, the Committee would seek to align the package with the remuneration policy stated in the policy table. However, on an internal
promotion to the Board, any existing contractual obligations and commitments may continue to be honoured, even if not consistent with
the prevailing policy. For example, if the individual is a member of the legacy defined benefit pension scheme, the Committee will consider
the pension arrangements in the context of the package as a whole and may allow continued participation.
The Committee’s general principle on recruitment is to offer a competitive remuneration package to attract high-calibre candidates
from a global talent pool. Basic salary would be set at an appropriate level for the candidate, taking into account all relevant factors.
As a data analytics and technology-driven business, with half of its revenue in the US, the company primarily competes for talent with
US-based information and technology companies.
The various components and the company’s approach are as follows:
Standard package on recruitment*
To offer remuneration in line with the policy table (including the limits), taking into account the principles set out above.
Compensation for forfeited entitlements
The Committee may make awards and payments on hiring an external candidate to compensate him or her for entitlements forfeited
on leaving the previous employer. If such a decision is made, the Committee will attempt to reflect previous entitlements as closely as
possible using a variety of tools, including cash and share based awards. Malus and claw-back provisions will apply where appropriate.
If necessary to facilitate the grant of awards, the Committee may rely on the one person exemption from shareholder approval in the
UK Listing Rules.
Relocation allowances and expenses
The type and size of relocation allowances and expenses will be determined by the specific circumstances of the new recruit.
*The standard package comprises annual base salary, retirement benefits, other benefits, AIP and LTIP.
Shareholding requirement
The Executive Directors are subject to shareholding requirements. These are a minimum of 400% of annual base salary for the CEO and
300% of annual base salary for other Executive Directors. On joining or promotion to the Board, Executive Directors are given a period of
time, typically up to five years, to build up to their requirement.
Policy on payments for loss of office
In line with the company’s policy, the service contracts of the existing Executive Directors contain 12-month notice periods.
The circumstances in which an Executive Director’s employment is terminated will affect the Committee’s determination of any payment
for loss of office, but it expects to apply the principles outlined in the table on the next page. The Committee reserves the right to depart
from these principles where appropriate in light of any taxation requirements to which the company or the Executive Director is subject
(including, without limitation, section 409A of the US Internal Revenue Code), or other legal obligations. Treatment of legacy awards granted
under multi-year incentive plans in which the Executive Directors no longer participate will be in accordance with those plans and the policy
on payments for loss of office summarised in the Remuneration Policy Report in the 2013 Annual Reports and Financial Statements.
Governance Directors’ Remuneration Report
101
Policy on payments for loss of office (continued)
GENERAL 1
INCENTIVES
Mutually agreed termination/termination by the company other than for cause2
The Executive Director would be entitled to salary, benefits
and other contractual payments in the normal way up to
the termination date and would be paid for any accrued but
untaken holiday.
Salary: Payment of up to 12 months’ salary to reflect the notice
period or payment in lieu of notice.
Other benefits: Where possible, benefits would be continued for
up to the duration of any unworked period of notice (not exceeding
the maximum stated in the policy table) or the Executive Director
would receive a cash payment (not exceeding the cost to the
company of providing those benefits).
Pension: Deferred or immediate pension in accordance with
scheme rules, with a credit in respect of, or payment for up
to, the full period of any unworked period of notice. There is
provision under the defined benefit pension scheme for members
leaving company service by reason of permanent incapacity to
make an application to the scheme trustee for early payment of
their pension.
Other: The company may pay compensation in respect of any
statutory employment rights and may make other appropriate
and customary payments.
The company would have due regard to principles of mitigation
of loss. Reductions would be applied to reflect any portion of the
notice period that is worked and/or spent on gardening leave.
On injury, disability, ill-health or death, the Committee reserves
the right to vary the treatment outlined in this section.
Employee instigated resignation
The Executive Director would not receive any payments for loss
of office. The Executive Director would be entitled to salary,
benefits and other contractual payments in the normal way up
to the termination date and would be paid for any accrued but
untaken holiday.
Pension: A deferred or immediate pension would be payable
in accordance with the scheme rules.
Dismissal for cause
The Executive Director would be entitled to salary, benefits
and other contractual payments in the normal way up to the
termination date and would be paid for any accrued but untaken
holiday, but would not receive any payments for loss of office.
Pension: A deferred or immediate pension would be payable
in accordance with the scheme rules.
Annual incentive: Any unpaid annual incentive for the previous year
and a pro-rata payment in respect of the part of the financial year
up to the termination date would generally be payable (subject to
the deferral provisions), with the amount being determined by
reference to the original performance criteria. However, the
Committee has discretion to decide otherwise depending on the
reason for termination and other specific circumstances. The
company would not pay any annual incentive in respect of any part
of the financial year following the termination date (e.g. for any
unworked period of notice). Any unvested AIP deferred shares
would vest in full at the end of the deferral period. The annual
incentive claw-back provisions would apply.
LTIP: The default position is that unvested LTIP awards would be
pro-rated to reflect time employed and would vest subject to
performance measured at the end of the relevant performance
period and subject to the Executive Director continuing to meet his
shareholding requirement on a pro-rated basis. The Committee
has discretion to allow unvested LTIP awards to vest earlier and
to adjust the application of time pro-rating and performance
conditions, subject to the plan rules.
Annual incentive: The Executive Director would be entitled to receive
an annual incentive for a completed previous year (subject to the
deferral provisions), but not a pro-rated annual incentive in respect
of a part year up to the termination date, unless the Committee
decides otherwise in the specific circumstances. Any unvested
AIP deferred shares would vest in full at the end of the deferral
period. Annual incentive claw-back provisions would apply.
LTIP: All outstanding LTIP awards would lapse on the date of notice.
Annual incentive: The Executive Director would not receive any
unpaid annual incentive. Any unvested AIP deferred shares lapse
on the date of dismissal.
LTIP: All outstanding LTIP awards would lapse on the date of
dismissal.
1.
2.
In addition to what is set out in this section, on termination for any reason, Erik Engstrom will be entitled to payment of amounts held in his “Retirement Account”.
Before he joined the company’s UK defined benefit scheme, he was not a member of any company pension scheme and RELX made annual contributions of 19.5% of
base salary to a deferred compensation plan. Contributions to this Retirement Account ceased when he became a member of the UK defined benefit arrangement.
In cases where the approved leaver treatment applies, the AIP and LTIP have a default position as well as giving the Committee discretion to adjust the default
treatment within certain parameters. The Committee would only expect to exercise such discretion where the Committee believes the personal circumstances
of the Executive Director so require.
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RELX Group Annual reports and financial statements 2017
Remuneration policy table – Non-Executive Directors
FEES
Purpose and link to strategy
To enable RELX to recruit Non-Executive Directors with the right balance of personal skills and experience to make a major contribution
to the Boards and Committees of a global business which is listed in London, Amsterdam and New York.
Operation
RELX Chairman: Receives an aggregate annual fee with no additional fees, e.g. Committee Chairman fees. In respect of RELX PLC and
RELX Group plc, the Committee determines, on the advice of the Senior Independent Director, the Chairman’s fee. In respect of RELX NV,
the Committee makes a recommendation, on the advice of the Senior Independent Director, to the Board of RELX NV, which determines
the Chairman’s fee.
Other Non-Executive Directors: Receive an aggregate annual fee in respect of their memberships of the Boards of RELX PLC, RELX NV
and RELX Group plc. Additional fees are payable to the Senior Independent Director and Committee Chairmen. Fees are also payable for
membership of Board Committees. In future, attendance or international travel fees may be paid. The Boards determine the level of
fees, subject to applicable law.
Fees may be reviewed annually, although in practice they have changed on a less frequent basis. When reviewing fees, consideration is
given to the time commitment required, the complexity of the role and the calibre of the individual. Periodically, comparative market data
is also reviewed, the primary source for which is the practice of FTSE 30 companies, with reference also to the Euronext Amsterdam
(AEX) index and US-listed companies.
Maximum value
The aggregate annual fee limit for fees paid to the Chairman and the Non-Executive Directors in respect of their memberships of the
Boards of RELX PLC, RELX NV and RELX Group plc is approximately £2m. The shareholders of RELX PLC and RELX Group plc have
approved a maximum total annual fee limit of £500,000 and £1,000,000 respectively. Additional fees for membership of or chairing Board
Committees and assuming additional responsibilities such as acting as Senior Independent Director, are not subject to these maximum
limits. The shareholders of RELX NV have approved a maximum annual fee limit of €600,000 for all fees borne by RELX NV.
OTHER BENEFITS
Purpose and link to strategy
To provide competitive benefits at appropriate cost.
Operation
Other benefits for Non-Executive Directors are reviewed periodically and may include private medical cover, tax return preparation
costs, secretarial benefits, car benefits, travel and related subsistence costs, including, where appropriate, the tax on such benefits.
Maximum value
There is no prescribed maximum amount.
Approach to recruitment remuneration –
Non-Executive Directors
Following recruitment, a new Non-Executive Director will
be entitled to fees and other benefits in accordance with the
company’s remuneration policy. No additional remuneration
is paid on recruitment. However, any reasonable expenses
incurred during the recruitment process will be reimbursed.
Policy on payments for loss of office – Non-Executive Directors
In addition to unpaid accrued fees, the Non-Executive Directors
are entitled to receive one month’s fees for loss of office if their
appointment is terminated before the end of its term.
Service contracts and letters of appointment
There are no further obligations in the Directors’ service contracts
and letters of appointment which are not otherwise disclosed in
this Report which could give rise to a remuneration payment or
loss of office payment. All Directors’ service contracts and letters
of appointment are available for inspection at the company’s
registered office. The Executive Directors’ service contracts do not
have a fixed expiry date.
Consideration of employment conditions elsewhere
in the company
When the Committee reviews the Executive Directors’ salaries
annually, it takes into account the company’s guidelines for
salaries for all employees for the forthcoming year. We do not
currently use any other remuneration comparison metrics
when determining the quantum and structure of Directors’ pay.
We have not consulted with employees in connection with our
policy on Directors’ remuneration.
Consideration of shareholder views
Our practice is to consult shareholders and consider their views
when formulating, or changing, our policy. Before the current
policy was approved by shareholders at the 2017 AGMs, the
Committee consulted extensively with shareholders (representing
a total of over 45% of the company’s combined PLC and NV issued
share capital) and shareholder representative bodies in the UK,
the Netherlands and the US on the proposed new remuneration
policy. We were grateful for the constructive feedback, which was
taken into account in our final proposals.
Previous remuneration policy and prior commitments
Any payments which are still to be made under arrangements
made and awards granted under the previous remuneration policy
(which is included in the 2013 Annual Reports and Financial
Statements and was approved by RELX PLC shareholders at the
2014 Annual General Meeting) will be made consistent with that
policy. The provisions of the previous policy which relate to
arrangements and awards granted under the previous policy will
therefore continue to apply until all payments in relation to those
arrangements and awards have been made.
The Committee also reserves the right to make any remuneration
or loss of office payments if the terms were agreed prior to the
approval of the previous policy or prior to an individual being
appointed as a Director.
Governance Report of the Audit Committees
103
Report of the Audit Committees
This report has been prepared by the Audit Committees of
RELX PLC and RELX NV in conjunction with the Audit Committee
of RELX Group plc (the Committees) and has been approved by the
respective Boards. It provides an overview of the membership,
responsibilities and activities of the Committees. The RELX PLC
and RELX NV Audit Committees fulfil their roles from the
perspective of the respective companies and both Committees
have access to the reports to and the work of the RELX Group plc
Audit Committee in this respect.
Membership
The Committees comprise at least three independent
Non-Executive Directors. The members of each of the
Committees who served during the year were:
§ Ben van der Veer (Chairman of the Committees)
§ Adrian Hennah
§ Linda Sanford (until 26 September 2017)
§ Marike van Lier Lels
§ Carol Mills
§ Suzanne Wood (from 26 September 2017)
Adrian Hennah, a UK chartered accountant, Suzanne Wood, a
US chartered accountant, and Ben van der Veer, a registered
accountant in the Netherlands, are considered to have
significant, recent and relevant financial experience.
The Committees as a whole are deemed to have competence
relevant to the sectors in which RELX operates.
Please see pages 66 and 67 for full profiles of Audit Committee
members.
Responsibilities
The main role and responsibilities of the Committees are
to assist the respective Boards in fulfilling their oversight
responsibilities regarding:
§ the integrity of the Group’s interim and full year financial
statements and financial reporting processes;
§ risk management and internal controls, and the
effectiveness of the internal auditors; and
§ the performance of the external auditors and the
effectiveness of the external audit process, including
monitoring the independence and objectivity of Ernst
& Young.
The Committees report to the respective Boards on their
activities, identifying any matters in respect of which they
consider that action or improvement is needed and making
recommendations as to the steps to be taken.
The terms of reference of each Audit Committee are reviewed
annually and a copy of each is published on the Group’s
website,
www.relx.com
Committee meetings
The Committees met four times during 2017. The Audit Committee
meetings are typically attended by the RELX Chief Executive
Officer, the RELX Chief Financial Officer, the RELX Financial
Controller, the RELX Chief Legal Officer, the RELX Head of Audit
and Risk, and audit partners from the external auditors.
Financial reporting
In discharging their responsibilities in respect of the 2017 interim
and full year financial statements, the Committees have:
§ reviewed and discussed areas of significant judgement in the
preparation of the financial statements, including in particular:
i. the carrying values of goodwill and intangible assets – the
significant judgements in respect of asset carrying values
relate to the assumptions underlying the value in use
calculations including discount rates and long-term growth
assumptions. The Committees received and discussed
reports from the RELX Financial Controller on the
methodology and the basis of the assumptions used;
ii. capitalisation of internally generated intangible assets –
the capitalisation of costs related to the development of new
products and business infrastructure, together with the useful
economic lives applied to the resulting assets, requires the
exercise of judgement. The Committees received reports
from the RELX Financial Controller on the amounts
capitalised and asset lives selected for major projects;
iii. uncertain tax positions – assessing potential liabilities
across numerous jurisdictions is complex and requires
judgement in making tax determinations. The Committees
received and discussed reports from the RELX Head of
Taxation on the potential liabilities identified and
judgements applied;
iv. reviewed the recognition of certain pension scheme
liabilities which are subject to judgement. The Committees
received and discussed reports from the RELX Financial
Controller on the methodology and the basis of the
assumptions used;
§ reviewed the critical accounting policies and compliance
with applicable accounting standards, including the
preparations for IFRS 9, 15 and 16, reviewed other disclosure
requirements and received regular update reports on
accounting and regulatory developments, including a review
of compliance with the Dutch Corporate Governance Code
which was issued on 8 December 2016;
§ received and considered the Financial Reporting Council’s
audit quality review of Ernst & Young's audit of the Group’s
financial statements for the year ended 31 December 2016.
There were no significant findings from the review;
§ reviewed the disclosures made in relation to internal control,
risk management, the going concern statement and the
viability statement. The Committees received and discussed
reports from the RELX Head of Audit and Risk and the
RELX Treasurer on the processes undertaken and
assumptions used in formulating these disclosures; and
§ considered whether the Annual Report taken as a whole was
fair, balanced and understandable.
The Committees also received detailed written and verbal reports
from the external auditors on these matters. The Committees were
satisfied with the explanations provided and conclusions reached.
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RELX Group Annual reports and financial statements 2017
Risk management and internal controls
With respect to their oversight of risk management and internal
controls, the Committees have:
§ received and discussed regular reports summarising the
status of the Group’s risk management activities, including
actions to mitigate risks, and the findings from internal audit
reviews and the actions agreed with management. Areas of
focus in 2017 included: operational and financial controls;
regulatory compliance; business continuity and resilience;
review of information (cyber) security; data privacy (including
the EU General Data Protection Regulation readiness); post
acquisition integration; and continued compliance with the
requirements of Section 404 of the US Sarbanes-Oxley Act
relating to the documentation and testing of internal controls
over financial reporting;
§ reviewed and approved the internal audit plan for 2018 and
monitored execution of the 2017 plan, including progress in
respect of recommendations made;
§ reviewed the resources, terms of reference and effectiveness
of the RELX Group plc risk management and internal audit
functions, including the results of an independent external
review of the internal audit function;
§ received presentations from: the RELX Chief Compliance
Officer on the compliance programmes, including the
operation of the Group’s codes of conduct, training
programmes and whistleblowing arrangements and the
RELX Chief Legal Officer on legal issues and claims;
§ received reports from the RELX Chief Strategy Officer
and Chief Legal Officer on information security and other
technology-related risks;
§ received updates from the RELX Treasurer on pension
arrangements and funding, treasury policies and risk
management and compliance with treasury policies;
§ received presentations from the RELX Head of Taxation
on tax policies and related matters;
§ received regular updates from the RELX Chief Financial
Officer on developments within the finance function; and
§ received presentations from chief financial officers of major
businesses.
External audit effectiveness
The Group has a well-established policy on audit effectiveness
and independence of auditors that sets out amongst other things:
the responsibilities of each Audit Committee in the selection
of auditors to be proposed for appointment or re-appointment
and for agreement on the terms of their engagement, scope
and remuneration; the auditor independence requirements and
the policy on the provision of non-audit services; the rotation of
audit partners and staff; and the conduct of meetings between
the auditors and the Audit Committees. The policy is available on
the website,
www.relx.com
The auditors are precluded from engaging in non-audit
services that would compromise their independence or violate
any professional requirements or regulations affecting their
appointment as auditors. The auditors may, however, provide
non-audit services which do not conflict with their independence,
and where their skills and experience make them a logical
supplier, subject to pre-approval by the Audit Committees.
Non-audit services performed in the Netherlands are limited to
audit assurance activities. The Committees will continue to review
the policy on the provision of non-audit services in the light of
ongoing regulatory developments.
The Committees have, each quarter, reviewed and agreed the
non-audit services provided in 2017, together with the associated
fees which are set out in note 4 to the consolidated financial
statements. The non-audit services provided were in the areas
of audit-related activities, such as royalty assurance, and
compliance, due diligence and other transaction-related services.
The external auditors have confirmed their independence and
compliance with the Group policy on auditor independence to the
Audit Committees.
Ernst &Young LLP and Ernst & Young Accountants LLP were first
appointed auditors of RELX PLC, RELC NV and RELX Group plc
for the financial year ended 31 December 2016. The auditors
are required to rotate the lead audit partners responsible
for the audit engagements every five years. The year ended
31 December 2017 was the second year for the lead engagement
partner for RELX PLC, Nigel Jones, and for the lead engagement
partner for RELX NV, Guus van Eimeren. The Audit Committees
confirm that they were in compliance with the provisions of
The Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014 during the
financial year ended 31 December 2017.
The Committees have conducted their review of the performance
of the external auditors and the effectiveness of the external audit
process for the year ended 31 December 2017. The review was based
on a survey of key stakeholders across the Group, consideration
of public reports by regulatory authorities on key Ernst & Young
member firms and the quality of the auditors’ reporting to and
interaction with the Audit Committees. Based on this review, the
Audit Committees were satisfied with the performance of the
auditors and the effectiveness of the audit process.
Audit Committee effectiveness
The effectiveness of the Audit Committees was reviewed as
part of the 2017 evaluation of the Boards which confirmed that
the Committees continue to function effectively. Details of the
evaluation are set out on page 77.
Ben van der Veer
Chairman of the Audit Committees
14 February 2018
Financial statements and other financial information
105
Financial
statements
and other
information
In this section
106 Independent auditors’ report
117 Consolidated financial statements
122 Notes to the consolidated
financial statements
165 5 year summary
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106
RELX Group Annual reports and financial statements 2017
Independent auditors’ report
UNITED KINGDOM – Ernst & Young LLP
TO: THE MEMBERS OF RELX PLC
NETHERLANDS –Ernst & Young Accountants LLP
TO: THE GENERAL MEETING OF RELX NV
For the purpose of these reports, the terms ‘we’ and ‘our’ denote Ernst & Young LLP in relation to the UK responsibilities and reporting
obligations to the Members of RELX PLC and Ernst & Young Accountants LLP in relation to Dutch responsibilities and reporting obligations
to the General Meeting of RELX NV. RELX PLC and RELX NV jointly own RELX Group plc, which holds all the operating businesses and
financing activities. RELX PLC, RELX NV, RELX Group plc and its subsidiaries, joint ventures and associates are together known as
‘the Group’. The reports of Ernst & Young LLP and Ernst & Young Accountants LLP are presented in the left and right hand columns of
this report respectively. Where separate columns are not presented, the content of the reports of Ernst & Young LLP and Ernst & Young
Accountants LLP are identical unless clearly marked otherwise.
The financial statements (‘the Financial Statements’), which are defined below, comprise:
§§ the consolidated financial statements of the Group (‘the Consolidated Financial Statements’);
§§ the parent company financial statements of RELX PLC (‘the PLC Company Accounts’); and
§§ the parent company financial statements of RELX NV (‘the NV Company Accounts’).
1. OPINIONS
We have audited the Consolidated Financial Statements of the Group, which is based in London and Amsterdam, for the year ended
31 December 2017 which comprise the consolidated statement of financial position as at 31 December 2017, the consolidated income
statement, the consolidated statement of comprehensive income, the consolidated statement of cash flows, and the consolidated
statement of changes in equity for the year then ended and notes to the Consolidated Financial Statements 1 to 32, including a summary
of the significant accounting policies and other explanatory information.
In addition, Ernst & Young LLP has audited the PLC Company Accounts (which comprise the company statement of financial position
as at 31 December 2017, the company statement of changes in equity for the year ended 31 December 2017 and the notes 1 to 5
including a summary of the significant accounting policies and other explanatory information) and Ernst & Young Accountants LLP
has audited the NV Company Accounts, based in Amsterdam, (which comprise the company statement of financial position as at
31 December 2017, the company statement of comprehensive income, and the company statement of changes in equity for the year
ended 31 December 2017 and the notes 1 to 8 to the NV Company Accounts, including the summary of the significant accounting
policies and other explanatory information).
RELX PLC
In our opinion:
§§ the Consolidated Financial Statements and the PLC Company
Accounts give a true and fair view of the state of the Group’s
and of RELX PLC’s affairs as at 31 December 2017 and of the
Group’s profit for the year then ended;
§§ the Consolidated Financial Statements have been properly
prepared in accordance with International Financial Reporting
Standards (‘IFRS’) as adopted by the European Union;
§§ the PLC Company Accounts have been properly prepared
in accordance with United Kingdom Generally Accepted
Accounting Practice; and
§§ both the Consolidated Financial Statements and the PLC
Company Accounts have been prepared in accordance with the
requirements of the Companies Act 2006, and, as regards the
group financial statements, Article 4 of the IAS Regulation.
RELX NV
In our opinion:
§§ the Consolidated Financial Statements give a true and fair
view of the financial position of the Group as at 31 December
2017 and of its result and its cash flows for the year then ended
in accordance with International Financial Reporting Standards
(‘IFRS’) as adopted by the European Union and as issued by the
International Accounting Standards Board and with Part 9 of
Book 2 of the Dutch Civil Code; and
§§ the NV Company Accounts give a true and fair view of the
financial position of RELX NV as at 31 December 2017 and of
its result for 2017 in accordance with FRS 101 ‘Reduced
Disclosure Framework’ as a result of applying Section 362 (1)
of Book 2 of the Dutch Civil Code.
The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has
been applied in the preparation of the PLC Company Accounts and the NV Company Accounts financial statements is applicable law
and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally
Accepted Accounting Practice).
Financial statements and other information
Independent auditors' report
107
2. BASIS FOR OPINIONS
RELX PLC
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section 10 of
our report below. We are independent of RELX Group and RELX PLC
in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
RELX NV
We conducted our audit in accordance with Dutch law,
including the Dutch Standards on Auditing. Our responsibilities
under those standards are further described in the ‘Auditor’s
responsibilities’ section 10 of our report.
We are independent of RELX Group in accordance with the
Verordening inzake de onafhankelijkheid van accountants bij
assurance-opdrachten (ViO, Code of Ethics for Professional
Accountants, a regulation with respect to independence) and
other relevant independence regulations in the Netherlands.
Furthermore we have complied with the Verordening
gedrags-en beroepsregels accountants (VGBA, Dutch Code
of Ethics).
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3. USE OF OUR REPORT
RELX PLC
This report is made solely to the company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
4. CONCLUSIONS RELATING TO PRINCIPAL RISKS, GOING CONCERN AND VIABILITY STATEMENT
RELX PLC
We have nothing to report in respect of the following information
in the annual report, in relation to which the ISAs(UK) require us
to report to you whether we have anything material to add or draw
attention to:
§§ the disclosures in the annual report set out on pages 60 to 63
that describe the principal risks and explain how they are being
managed or mitigated;
§§ the directors’ confirmation set out on page 60 in the annual report
that they have carried out a robust assessment of the principal risks
facing the entity, including those that would threaten its business
model, future performance, solvency or liquidity;
§§ the directors’ statement set out on page 79 in the financial
statements about whether they considered it appropriate to adopt
the going concern basis of accounting in preparing them, and their
identification of any material uncertainties to the entity’s ability to
continue to do so over a period of at least twelve months from the
date of approval of the financial statements
§§ whether the directors’ statement in relation to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained
in the audit; or
§§ the directors’ explanation set out on page 80 in the annual report
as to how they have assessed the prospects of the entity, over
what period they have done so and why they consider that period
to be appropriate, and their statement as to whether they have a
reasonable expectation that the entity will be able to continue in
operation and meet its liabilities as they fall due over the period
of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
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RELX Group Annual reports and financial statements 2017
5. OVERVIEW OF OUR AUDIT APPROACH
Key audit matters
§§ Uncertain tax positions
§§ Internally developed intangible assets
§§ Aspects of revenue recognition
§§ Carrying value of goodwill and acquired intangible assets
§§ Finance systems
§§ We performed an audit of the complete financial information of 6 components and audit procedures on
Audit scope
specific balances for a further 5 components.
§§ The components where we performed full or specific audit procedures accounted for 79% of absolute
profit before tax, 78% of revenue and 78% of total assets.
Materiality
§§ Overall Group materiality of £86.7m which represents approximately 5% of profit before tax.
6. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters. We have communicated
the key audit matters to the Boards. The key audit matters are not a comprehensive reflection of all matters discussed.
RISK
OUR RESPONSE TO THE RISK
Uncertain tax positions
KEY OBSERVATIONS COMMUNICATED
TO THE AUDIT COMMITTEES
Risk direction:
Refer to the Report of the Audit Committees on page 103 and note 10 Taxation of the Consolidated Financial Statements on page 134
We concluded that management’s
judgements in relation to the extent of
provisions for uncertain tax positions
are appropriate.
Procedures on the uncertain tax positions
were performed centrally by the Group team
supported by overseas teams including
specialists:
§§ We assessed the processes and tested
controls over the tax provisioning process.
§§ We met with tax management to understand
the Group cross-border transactions, status
of all significant provisions, and any changes
to management’s judgements in the year.
§§ We read correspondence with tax authorities
and external advisors to inform our
assessment of recorded estimates and
evaluate the completeness of the provisions
recorded.
§§ We evaluated management’s methodology
to record or release provisions following tax
audits, settlements and the expiry of
timeframes.
§§ We tested the calculation of the year end
provisions by inspecting underlying
documentation and supporting schedules.
The Group is subject to tax in numerous
jurisdictions. Its complex organisation
and operational structure gives rise
to potential tax exposures that require
management to exercise judgement in
making determinations as to the amount
of tax that is payable.
The Group reports cross-border
transactions undertaken between
subsidiaries on an arm’s-length basis
in tax returns in accordance with
Organisation for Economic Co-operation
and Development (OECD) guidelines.
However, transfer pricing relies on the
exercise of judgement and it is frequently
possible for there to be a range of
legitimate and reasonable views.
The Group is subject to tax authority audits
as a matter of routine and has a number of
open tax enquiries.
As a result, it has recognised a number of
provisions against uncertain tax positions,
the valuation of which requires significant
judgement.
We focused on this area due to the
significance of the balance and
the subjectivity in determining the
quantification of the provision and
the judgement around the trigger for
recognition or release. There is a risk
that the tax provisions may be incorrectly
quantified, impacting the provision and
the effective tax rate.
Financial statements and other information
Independent auditors' report
109
RISK
OUR RESPONSE TO THE RISK
Internally developed intangible assets
KEY OBSERVATIONS COMMUNICATED
TO THE AUDIT COMMITTEES
Risk direction:
Refer to the Report of the Audit Committees on page 103 and note 16 Intangible assets of the Consolidated Financial Statements on page 143
We did not identify any evidence of
material misstatement in the internally
developed intangible assets balance.
The Group capitalised internally developed
intangible assets of £304 million in the
current year (2016: £280 million). The
capitalisation of costs related to the
development of new products and
business infrastructure, together with
the useful economic lives applied to the
resulting assets, requires the exercise
of judgement.
We focused on this area as the Group
has invested significantly in a number
of projects across the business. It is
inherently judgemental with respect to
technical feasibility, intention and ability
to complete the intangible asset, ability to
use or sell the asset, generation of future
economic benefits and the ability to
measure the costs reliably. This results
in a risk that expenditures may be
inappropriately capitalised, amortised
or valued.
We performed full and specific scope audit
procedures over this risk area in 6 locations,
which covered 86% of the account balance:
§§ We assessed the processes and tested
controls for the capitalisation of internally
generated intangible assets and
identification of indicators of impairment.
§§ We assessed the accounting policy and
methodology for capitalisation of expenditures.
§§ We evaluated the accuracy and valuation
of amounts capitalised to assess that costs
are directly attributable and necessary to
create, produce, and prepare the asset to be
capable of operating in the manner intended
by management.
§§ We assessed management’s consideration
as to whether indicators of impairment
existed based on the ongoing business
rationale, including the stage of completion
for internally developed intangible assets.
Where indicators were present, we assessed
management’s recovery projections to
determine the reasonableness of
judgements on expected cash flows that
support recovery of the intangible balance.
Aspects of revenue recognition
Risk direction:
Refer to note 2 Segment Analysis of the Consolidated Financial Statements on page 124
We did not identify evidence of material
misstatement in the revenue
recognised in the year.
The Group earns revenue from a variety
of sources among the different business
areas, including annual subscriptions,
transactional usage and exhibition fees.
The nature of the risk associated with the
accurate recording of revenue varies.
We recognise that revenue is a key metric
upon which the Group is judged, that the
Group has annual internal targets, and
that the Group has incentive schemes that
are partially impacted by revenue growth.
We have determined that there is a risk
in relation to each of the business areas
reflective of the opportunity to commit
fraud in the respective revenue streams
through manual adjustments or override
of controls by management.
We performed full and specific scope audit
procedures over this risk area in 10 locations,
which covered 78% of the risk amount. We
performed procedures to address the specific
risk in each business area.
§§ We assessed the processes and tested
controls over each significant revenue
stream.
§§ We evaluated the appropriateness of journal
entries impacting revenue, as well as other
adjustments made in the preparation of the
financial statements. We considered unusual
journals such as those posted outside of
expected days, or by unexpected individuals.
We also evaluated management’s controls
over such adjustments.
§§ We inspected a sample of contracts to check
that revenue recognition was in accordance
with the contract terms and the group’s
revenue recognition policies.
§§ We tested a sample of transactions around
period end to test that revenue was recorded
in the correct period.
§§ For revenue streams which have
judgemental elements, we evaluated
management’s assumptions.
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RELX Group Annual reports and financial statements 2017
6. KEY AUDIT MATTERS (CONTINUED)
RISK
OUR RESPONSE TO THE RISK
KEY OBSERVATIONS COMMUNICATED
TO THE AUDIT COMMITTEES
Carrying value of goodwill and acquired intangible assets
Risk direction:
Refer to the Report of the Audit Committees on page 103 and note 15 Goodwill and note 16 Intangible assets of the Consolidated
Financial Statements on pages 142 and143, respectively
We noted the assumptions relating
to the impairment models fell within
acceptable ranges.
We agree with management’s
conclusion that no material impairment
of goodwill or intangible assets were
required in the year.
Risk direction:
Our understanding and testing of IT
systems and controls supported our
audit approach.
We focused on this area due the size of
the goodwill balance of £5,965 million
(2016: £6,392 million) and acquired
intangible assets net book amount of
£2,058 million (2016: £2,519 million)
and because the Directors’ assessment
of the value in use of the Group’s Cash
Generating Units (‘CGU’) involves
judgement about the future results of the
Group and the discount rates applied to
cash flow forecasts, and any consequential
impairment that may be necessary.
Finance systems
The Group has many IT systems which are
vital to the ongoing operations and to the
integrity of the financial reporting process.
Due to the global nature of the Group and
its operations, the applications, associated
infrastructure and IT processes which
support significant business and financial
processes are spread across a number
of locations. These are delivered by a mix
of in-house teams and third party support
providers who on occasion reside in
different countries from the physical
location of the IT infrastructure or the
location of the RELX business users.
Understanding the IT environment
including interfaces between them was an
area of audit focus to assess if transactions
are being processed accurately.
We assessed the key information used in
determining the valuation including the
weighted average cost of capital, cash flow
forecasts and the implicit growth, utilising
our specialist support as necessary. We also
conducted a sensitivity analysis to understand
how much these projections would need to
change by for there to be an impairment.
We assessed management’s annual goodwill
and indefinite lived acquired intangible asset
impairment review as well as management’s
consideration as to whether indicators of
impairment existed for finite lived acquired
intangible assets. Where indicators were
present for acquired intangible assets,
we focused on the key judgements in the
impairment review calculations, for example,
the expected cash flows and future benefits
as compared to the costs where applicable.
We utilised IT auditors to support our evaluation
of the design and operation of IT controls to
address the Group's control objectives and
financial reporting risks.
§§ We made inquiries of management to
understand the IT environment and walked
through the financial processes end-to-end
in order to understand where IT systems
were integral to the Group accounting
processes, as applicable.
§§ We performed data analytic procedures
in certain locations and business areas
to understand the flow of transactions
and perform specific test procedures.
§§ We tested the IT general controls
environment for the key applications.
§§ Where appropriate, we received reports
from the service auditors of the outsourced
systems and evaluated the adequacy of the
work performed and followed up on matters
arising, performing further procedures as
necessary.
§§ Where required, we tested compensating
controls or performed alternative
procedures to complement the controls
based audit approach.
In the prior year, our auditor’s report included a key audit matter in relation to Transition as auditor, including auditing opening balances.
As this is our second year auditing the Group, the key audit matter relating to audit transition is no longer applicable.
Financial statements and other information
Independent auditors' report
111
7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for
each entity within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements. We take into
account size, risk profile, the organisation of the group and effectiveness of group-wide controls, changes in the business environment
and other factors such as recent Internal audit results when assessing the level of work to be performed at each entity.
The Group has centralised processes for key judgements and determination of accounting policies. Certain areas of audit focus,
namely internally developed intangible assets, revenue recognition, and IT system management are decentralised processes
delineated by business area. We have tailored our audit response accordingly and procedures for the areas of focus were performed
or directed by the Group audit team.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage
of significant accounts in the financial statements, of the reporting components of the Group, we selected eleven components covering
entities within United Kingdom, the Netherlands, the United States, France, and Switzerland, which represent the principal business
units within the Group.
Of the eleven components selected, we performed an audit of the complete financial information of six components (“full scope
components”) which were selected based on their size or risk characteristics. For the remaining five components (“specific scope
components”), we performed audit procedures on specific accounts within that component that we considered had the potential for the
greatest impact on the significant accounts in the financial statements either because of the size of these accounts or their risk profile.
The reporting components where we performed audit procedures accounted for 79% (2016: 83%) of the Group’s profit before tax on an
absolute basis1, 78% (2016: 83%) of the Group’s Revenue and 78% (2016: 82%) of the Group’s Total assets. For the current year, the full
scope components contributed 57% (2016: 57%) of the Group’s profit before tax on an absolute basis, 70% (2016: 75%) of the Group’s
revenue and 70% (2016: 72%) of the Group’s total assets. The specific scope component contributed 22% (2016: 26%) of the Group’s profit
before tax on an absolute basis, 8% (2016: 8%) of the Group’s revenue and 8% (2016: 10%) of the Group’s total assets. The audit scope of
these components may not have included testing of all significant accounts of the component but will have contributed to the coverage
of significant accounts tested for the Group.
Of the remaining components that together represent 21% of the Group’s profit before tax on an absolute basis, none are individually
greater than 2.1% of the Group’s profit before tax on an absolute basis. For these components, we performed other procedures, including
analytical review, review of internal audit reports, and testing of consolidation journals, intercompany eliminations and foreign currency
translation recalculations at the Group level to respond to any potential risks of material misstatement to the Group financial statements.
The charts below illustrate the coverage obtained from the work performed by our audit teams.
PROFIT BEFORE TAX (ABSOLUTE)
REVENUE
TOTAL ASSETS
21%
22%
22%
22%
57%
8%
8%
70%
70%
Full scope
Specific scope
Other procedures
Changes from the prior year
Changes from the prior year include reducing two components from full to specific scope and reducing three components from specific
scope to other procedures scope as part of our risk focused approach which reflects the experience gained from being in our second
year as auditors.
Integrated team structure
The overall audit strategy is determined by the UK senior statutory auditor, Nigel Jones and Dutch statutory auditor Guus van Eimeren.
RELX Group plc is based in the UK, however, due to the structure of the RELX PLC and RELX NV ownership, the Group team includes
members from both the UK and the Netherlands. The Dutch auditor travelled to the UK many times during the current year’s audit and
members of the Group audit team in both jurisdictions work together as an integrated team. Both partners attended certain Audit
Committee meetings during the course of the audit and concluded on key judgements.
1. Coverage of profit before tax measured on an absolute basis for each component (components with a loss would be added to both the numerator and denominator).
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RELX Group Annual reports and financial statements 2017
7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT (CONTINUED)
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at each of the
components by us, as the primary audit engagement team, or by component auditors from other EY global network firms operating under
our instruction. Of the six full scope components, audit procedures were performed on three of these directly by the Group audit team.
For the five specific scope components, where the work was performed by component auditors, we determined the appropriate level of
involvement to enable us to determine that sufficient audit evidence had been obtained as a basis for our opinion on the Group as a whole.
The Group audit team continued to follow a programme of planned visits that has been designed to ensure that the Senior Statutory
Auditors, or another group audit partner, visit all full scope locations and specific scope locations on a rotational basis. During the
current year’s audit cycle, visits were undertaken by the Group audit team to the component teams in United Kingdom, the Netherlands,
the United States, France, and Switzerland. These visits involved meeting local management and discussing the audit approach with the
component audit team and any issues arising from their work. The Group audit team also participated in key discussions, via conference
calls with all full and specific scope locations. The primary team interacted regularly with the component teams where appropriate
during various stages of the audit, reviewed key working papers and were responsible for the scope and direction of the audit process.
This, together with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on the Group
financial statements.
8. OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit
and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our
audit procedures.
We determined materiality for the Group to be £86.7 million (2016: £74.0 million), which is 5% (2016: 5%) of profit before tax. We believe
that this materiality basis provides us with the best assessment of the requirements of the users of the financial statements.
RELX PLC
We determined materiality for the PLC Company Accounts to
be £63.4 million (2016: £31.3million), which is 2% (2016: 1%) of
equity. Materiality has increased due to this being our second
year auditing the company.
RELX NV
We determined materiality for the NV Company Accounts to
be €87.4 million (2016: €43.1 million), which is 2% (2016: 1%)
of equity. Materiality has increased due to this being our second
year auditing the company.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was that
performance materiality was 75% (2016: 75%) of our materiality, namely £65.0m (2016: £56.0m). We have set performance materiality
at this percentage due to our assessment of the control environment and the historic lack of significant audit findings.
Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement accounts is
undertaken based on a percentage of total performance materiality. The performance materiality set for each component is based on
the relative scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that component.
In the current year, the range of performance materiality allocated to components was £19.5m to £48.7m (2016: £13.5m to £33.8m).
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £4.35m (2016: £3.7m),
which is set at 5% of materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other
relevant qualitative considerations in forming our opinion.
Financial statements and other information
Independent auditors' report
113
RELX NV
Report on other information included the annual report and
financial statements
In addition to the financial statements and our auditors’ report
thereon, the annual reports and financial statements contain
other information that consists of:
§§ Report of the Board of RELX NV;
§§ Other information pursuant to Part 9 of Book 2 of the Dutch
Civil Code;
§§ 5 year summary;
§§ Other financial information;
§§ Shareholder information.
Based on the following procedures performed, we conclude that
the other information:
§§ is consistent with the financial statements and does not
contain material misstatements;
§§ contains the information as required by Part 9 of Book 2 of the
Dutch Civil Code.
We have read the other information. Based on our knowledge
and understanding obtained through our audit of the financial
statements or otherwise, we have considered whether the other
information contains material misstatements. By performing
these procedures, we comply with the requirements of Part 9 of
Book 2 of the Dutch Civil Code and the Dutch Standard 720. The
scope of the procedures performed is less than the scope of those
performed in our audit of the financial statements.
Engagement
We have been engaged by the General Meeting at 13 January 2016
as auditor of RELX NV since the audit of the year 2016 and we are
the statutory auditor since that date up until today.
9. OTHER REPORTING
RELX PLC
Other information
The other information comprises the information included in the
annual report as set out on pages 2-104, other than the financial
statements and our auditor’s report thereon. The directors are
responsible for the other information.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there
is a material misstatement in the financial statements or a
material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report
that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in
the other information and to report as uncorrected material
misstatements of the other information where we conclude that
those items meet the following conditions:
§§ Fair, balanced and understandable set out on page 79 – the
statement given by the directors that they consider the annual
report and financial statements taken as a whole is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the group’s
performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
§§ Audit committee reporting set out on pages 103 -104 – the
section describing the work of the audit committee does not
appropriately address matters communicated by us to the
audit committee; or
§§ Directors’ statement of compliance with the UK Corporate
Governance Code set out on page 71– the parts of the
directors’ statement required under the Listing Rules
relating to the company’s compliance with the UK Corporate
Governance Code containing provisions specified for review
by the auditor in accordance with Listing Rule 9.8.10R(2) do
not properly disclose a departure from a relevant provision
of the UK Corporate Governance Code.
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RELX Group Annual reports and financial statements 2017
9. OTHER REPORTING (CONTINUED)
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
§§ the information given in the strategic report and the directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
§§ the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course
of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
§§ adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
received from branches not visited by us; or
§§ the parent company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
§§ certain disclosures of directors’ remuneration specified by
law are not made; or
§§ we have not received all the information and explanations we
require for our audit.
Financial statements and other information
Independent auditors' report
115
10. SCOPE AND RESPONSIBILITIES
RELX PLC
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 171, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group and parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are; to identify
and assess the risks of material misstatement of the financial
statements due to fraud; to obtain sufficient appropriate audit
evidence regarding the assessed risks of material misstatement
due to fraud, through designing and implementing appropriate
responses; and to respond appropriately to fraud or suspected
fraud identified during the audit. However, the primary
responsibility for the prevention and detection of fraud rests
with both those charged with governance of the entity and
management.
Our approach was as follows:
§§ We obtained an understanding of the legal and regulatory
frameworks that are applicable to the group and
determined that the most significant are those that relate to
the reporting framework (IFRS, FRS 101, the Companies Act
2006 and UK Corporate Governance Code) and the relevant
tax compliance regulations in the jurisdictions in which the
group operates.
§§ We understood how RELX Group is complying with those
frameworks making enquiries of management, internal
audit, those responsible for legal and compliance
procedures and the company secretary. We corroborated
our enquiries through our review of board minutes and
papers provided to the Audit Committee.
RELX NV
Directors’ and Audit Committee’s responsibilities
The Directors are responsible for:
§§ the preparation and fair presentation of the Consolidated
Financial Statements in accordance with IFRSs as adopted by
the European Union and Part 9 of Book 2 of the Dutch Civil Code;
§§ the preparation and fair presentation of the NV Company
Accounts in accordance with FRS 101 ‘Reduced Disclosure
Framework’ as a result of applying Section 362 (1) of Book 2
of the Dutch Civil Code;
§§ the preparation of the other information, including the report
of the Board in accordance with Part 9 of Book 2 of the Dutch
Civil Code and other information pursuant to Part 9 of Book 2
of the Dutch Civil Code;
§§ such internal control as the directors determine is necessary
to enable the preparation of the Financial Statements that are
free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the Directors are
responsible for assessing the Group’s and RELX NV’s ability to
continue as a going concern. Based on the financial reporting
frameworks mentioned, the Directors should prepare the
Consolidated Financial Statements and NV Company Accounts
using the going concern basis of accounting unless the Directors
either intend to liquidate the Group and/or RELX NV or to cease
operations, or have no realistic alternative but to do so. The
Directors should disclose in the Financial Statements events and
circumstances that may cast significant doubt on the Group’s
and/or RELX NV’s ability to continue as a going concern.
The Audit Committee is responsible for overseeing the Group’s
financial reporting process.
Auditor’s responsibilities
Our objective is to plan and perform the audit assignment in a
manner that allows us to obtain sufficient and appropriate audit
evidence for our opinion.
Our audit has been performed with a high, but not absolute, level
of assurance, which means we may not have detected all errors
and fraud.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of these financial statements. The materiality affects
the nature, timing and extent of our audit procedures and the
evaluation of the effect of identified misstatements on our opinion.
For more information about an audit of financial statements,
we refer to the NBA website: https://www.nba.nl/globalassets/
tools-en-voorbeelden/standaardpassages/eng_
beursgenoteerd_01.pdf.
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RELX Group Annual reports and financial statements 2017
10. SCOPE AND RESPONSIBILITIES (CONTINUED)
§§ We assessed the susceptibility of the group’s financial
statements to material misstatement, including how fraud
might occur by meeting with management from various parts
of the business to understand where it considered there was
susceptibility to fraud. We also considered performance
targets and their propensity to influence on efforts made
by management to manage earnings. We considered the
programmes and controls that the group has established to
address risks identified, or that otherwise prevent, deter and
detect fraud; and how senior management monitors those
programmes and controls. Where the risk was considered
to be higher, we performed audit procedures to address each
identified fraud risk. These procedures included testing manual
journals and were designed to provide reasonable assurance
that the financial statements were free from fraud or error.
§§ Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations.
Our procedures involved: journal entry testing, with a focus
on manual consolidation journals and journals indicating large
or unusual transactions based on our understanding of the
business; enquiries of legal counsel, Group management,
internal audit, country management at all full and specific
scope management; and focused testing. In addition, we
completed procedures to conclude on the compliance of the
disclosures in the annual report and accounts with all
applicable requirements.
§§ Any instances of non-compliance with laws and regulations
were communicated by/to components and considered in our
audit approach, if applicable.
A further description of our responsibilities for the audit of the
financial statements is located on theFinancial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Other matters we are required to address
§§ We were appointed by the company on 21 April 2016 to audit the
financial statements for the year ending 31 December 2016 and
subsequent financial periods.
§§ The period of total uninterrupted engagement including
previous renewals and reappointments is two years, covering
the years ending 2016 and 2017.
§§ The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the group or the parent company and we
remain independent of the group and the parent company in
conducting the audit.
§§ The audit opinion is consistent with the additional report to the
audit committee.
11. SIGNING
Nigel Jones
(Senior Statutory Auditor)
For and on behalf of
Ernst & Young LLP
London
14 February 2018
Report on other legal and regulatory requirements
§§ We have been engaged by the General Meeting at 13 January
2016 as auditor of RELX NV since the audit of the year 2016
and we are the statutory auditor since that date up until today.
§§ We have not provided prohibited non-audit services as referred
to in Article 5(1) of the EU Regulation on specific requirements
regarding statutory audit of public-interest entities.
§§ We also submit an additional report to the audit committee
in accordance with Article 11 of the EU Regulation on specific
requirements regarding statutory audit of public-interest
entities. The information included in this additional report
is consistent with our audit opinion in this auditor’s report.
Guus van Eimeren
Ernst & Young Accountants LLP
Amsterdam
14 February 2018
Notes:
1. The maintenance and integrity of the RELX Group web site is the responsibility of the directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since
they were initially presented on the web site.
2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Financial statements and other information Consolidated financial statements
117
Consolidated income statement
FOR THE YEAR ENDED 31 DECEMBER
Revenue
Cost of sales
Gross profit
Selling and distribution costs
Administration and other expenses
Share of results of joint ventures
Operating profit
Finance income
Finance costs
Net finance costs
Disposals and other non-operating items
Profit before tax
Current tax
Deferred tax
Tax expense
Net profit for the year
Attributable to:
RELX PLC and RELX NV shareholders
Non-controlling interests
Net profit for the year
Earnings per share
FOR THE YEAR ENDED 31 DECEMBER
Basic earnings per share
RELX PLC
RELX NV
Diluted earnings per share
RELX PLC
RELX NV
Note
2
3
8
8
9
10
11
11
11
11
2017
£m
7,355
(2,631)
4,724
(1,163)
(1,693)
37
1,905
4
(186)
(182)
11
1,734
(439)
372
(67)
1,667
2016
£m
6,895
(2,488)
4,407
(1,109)
(1,627)
37
1,708
8
(203)
(195)
(40)
1,473
(374)
70
(304)
1,169
2015
£m
5,971
(2,129)
3,842
(965)
(1,444)
64
1,497
3
(177)
(174)
(11)
1,312
(370)
72
(298)
1,014
1,659
8
1,667
1,161
8
1,169
1,008
6
1,014
2017
2016
2015
82.2p
82.2p
56.3p
56.3p
46.4p
49.4p
81.5p
81.5p
55.8p
55.8p
46.0p
48.9p
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RELX Group Annual reports and financial statements 2017
Consolidated statement of comprehensive income
FOR THE YEAR ENDED 31 DECEMBER
Net profit for the year
Items that will not be reclassified to profit or loss:
Actuarial gains/(losses) on defined benefit pension schemes
Tax on items that will not be reclassified to profit or loss
Total items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Fair value movements on cash flow hedges
Transfer to net profit from cash flow hedge reserve
Tax on items that may be reclassified to profit or loss
Total items that may be reclassified to profit or loss
Other comprehensive (loss)/income for the year
Total comprehensive income for the year
Attributable to:
RELX PLC and RELX NV shareholders
Non-controlling interests
Total comprehensive income for the year
Note
2017
£m
1,667
2016
£m
1,169
2015
£m
1,014
6
10
19
19
10
233
(59)
174
(507)
137
25
(30)
(375)
(201)
1,466
1,458
8
1,466
(262)
45
(217)
670
(165)
46
19
570
353
1,522
1,514
8
1,522
157
(34)
123
99
(104)
29
18
42
165
1,179
1,173
6
1,179
Financial statements and other information Consolidated financial statements
119
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER
Cash flows from operating activities
Cash generated from operations
Interest paid
Interest received
Tax paid (net)
Net cash from operating activities
Cash flows from investing activities
Acquisitions
Purchases of property, plant and equipment
Expenditure on internally developed intangible assets
Purchase of investments
Proceeds from disposals of property, plant and equipment
Gross proceeds from business disposals
Payments on business disposals
Dividends received from joint ventures
Net cash used in investing activities
Cash flows from financing activities
Dividends paid to shareholders of RELX PLC and RELX NV
Distributions to non-controlling interests
(Decrease)/increase in short-term bank loans, overdrafts and commercial paper
Issuance of term debt
Repayment of term debt
Repayment of finance leases
Repurchase of ordinary shares
Purchase of shares by Employee Benefit Trust
Proceeds on issue of ordinary shares
Net cash used in financing activities
Note
12
12
14
12
12
12
12
26
26
2017
£m
2016
£m
2015
£m
2,445
(152)
4
(449)
1,848
(131)
(51)
(303)
(10)
1
84
(50)
38
(422)
(762)
(10)
(148)
873
(712)
(5)
(700)
(39)
32
(1,471)
2,236
(160)
8
(402)
1,682
(361)
(51)
(282)
(6)
1
18
(31)
44
(668)
(683)
(9)
271
603
(474)
(7)
(700)
(29)
23
(1,005)
1,882
(140)
8
(343)
1,407
(191)
(65)
(242)
(16)
1
75
(41)
57
(422)
(583)
(8)
(339)
500
(186)
(9)
(500)
(23)
24
(1,124)
(Decrease)/increase in cash and cash equivalents
12
(45)
9
(139)
Movement in cash and cash equivalents
At start of year
(Decrease)/increase in cash and cash equivalents
Exchange translation differences
At end of year
162
(45)
(6)
111
122
9
31
162
276
(139)
(15)
122
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RELX Group Annual reports and financial statements 2017
Consolidated statement of financial position
AS AT 31 DECEMBER
Non-current assets
Goodwill
Intangible assets
Investments in joint ventures
Other investments
Property, plant and equipment
Deferred tax assets
Net pension assets
Derivative financial instruments
Current assets
Inventories and pre-publication costs
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Assets held for sale
Total assets
Current liabilities
Trade and other payables
Derivative financial instruments
Borrowings
Taxation
Provisions
Non-current liabilities
Derivative financial instruments
Borrowings
Deferred tax liabilities
Net pension obligations
Provisions
Liabilities associated with assets held for sale
Total liabilities
Net assets
Capital and reserves
Share capital
Share premium
Shares held in treasury
Translation reserve
Other reserves
Shareholders’ equity
Non-controlling interests
Total equity
Note
2017
£m
2016
£m
15
16
17
17
18
10
6
19
20
21
19
12
22
19
23
25
19
23
10
6
25
26
26
26
27
5,965
3,194
102
141
209
405
22
86
10,124
197
1,822
29
111
2,159
–
12,283
3,237
32
678
560
19
4,526
25
4,208
738
350
62
5,383
–
9,909
2,374
224
3,104
(1,631)
169
487
2,353
21
2,374
6,392
3,604
102
137
242
444
-
49
10,970
209
1,956
20
162
2,347
6
13,323
3,425
85
1,159
612
23
5,304
110
3,684
1,137
636
89
5,656
5
10,965
2,358
226
3,003
(1,471)
727
(165)
2,320
38
2,358
The consolidated financial statements were approved by the Board of Directors and authorised for issue on 14 February 2018.
They were signed on its behalf by:
A J Habgood
Chairman
N L L
Chief Financial Officer
uff
Financial statements and other information Consolidated financial statements
121
Consolidated statement of changes in equity
Share
capital
£m
212
Share
premium
£m
2,820
Shares held
in treasury
£m
(1,107)
Translation
reserve
£m
74
Other
reserves
£m
107
Shareholders’
equity
£m
2,106
Non-
controlling
interests
£m
31
Balance at 1 January 2015
Total comprehensive income
for the year
Dividends paid
Issue of ordinary shares,
net of expenses
Repurchase of ordinary shares
Cancellation of shares
Bonus issue of ordinary shares
Increase in share based
remuneration reserve
(net of tax)
Settlement of share awards
Acquisitions
Exchange differences on
translation of capital
and reserves
Balance at 1 January 2016
Total comprehensive income
for the year
Dividends paid
Issue of ordinary shares,
net of expenses
Repurchase of ordinary shares
Cancellation of shares
Increase in share based
remuneration reserve
(net of tax)
Settlement of share awards
Exchange differences on
translation of capital
and reserves
Balance at 1 January 2017
Total comprehensive income
for the year
Dividends paid
Issue of ordinary shares,
net of expenses
Repurchase of ordinary shares
Cancellation of shares
Increase in share based
remuneration reserve
(net of tax)
Settlement of share awards
Acquisitions
Disposal of business
Exchange differences on
translation of capital
and reserves
Note
14
–
–
–
–
(4)
18
–
–
–
–
–
24
–
–
(18)
–
–
–
–
–
–
(623)
269
–
–
49
–
(2)
224
(78)
2,748
19
(1,393)
14
–
–
–
–
26
(6)
–
–
8
226
–
–
–
–
14
26
(4)
–
–
–
–
2
–
–
23
–
–
–
–
–
–
–
(722)
713
–
39
232
3,003
(108)
(1,471)
–
–
32
–
–
–
–
–
–
–
–
–
(737)
570
–
37
–
–
69
(30)
Balance at 31 December 2017
224
3,104
(1,631)
99
–
1,074
(583)
–
–
–
–
–
–
–
51
224
670
–
–
–
–
–
–
(167)
727
(507)
–
–
–
–
–
–
–
–
–
–
(265)
–
47
(49)
–
10
341
844
(683)
–
–
(707)
44
(39)
35
(165)
1,965
(762)
–
–
(566)
42
(37)
–
–
(51)
169
10
487
1,173
(583)
24
(623)
–
–
47
–
–
–
2,144
1,514
(683)
23
(722)
–
44
–
–
2,320
1,458
(762)
32
(737)
–
42
–
–
–
–
2,353
6
(8)
–
–
–
–
–
–
4
1
34
8
(9)
–
–
–
–
–
5
38
8
(10)
–
–
–
–
–
1
(15)
(1)
21
Total
equity
£m
2,137
1,179
(591)
24
(623)
–
–
47
–
4
1
2,178
1,522
(692)
23
(722)
–
44
–
5
2,358
1,466
(772)
32
(737)
–
42
–
1
(15)
(1)
2,374
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122
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
1 Basis of preparation and accounting policies
Basis of preparation
RELX PLC and RELX NV are separate, publicly-held entities. RELX PLC’s ordinary shares are listed in London and, through a depositary
receipt, in New York, and RELX NV’s ordinary shares are listed in Amsterdam and, through a depositary receipt, in New York. RELX PLC
and RELX NV jointly own RELX Group plc, which holds all the Group’s operating businesses and financing activities. RELX PLC, RELX NV,
RELX Group plc and its subsidiaries, joint ventures and associates are together known as “the Group”.
The Governing Agreement determines the equalisation ratio between RELX PLC and RELX NV shares. One RELX PLC ordinary share
confers an equivalent economic interest to one RELX NV ordinary share.
As a result of these arrangements, all shareholders can be regarded as having interests in a single economic entity. Consequently,
the Directors have concluded that the Group forms a single reporting entity for the presentation of consolidated financial statements.
Accordingly, the Group consolidated financial information represents the interests of both sets of shareholders and is presented by
both RELX PLC and RELX NV as their respective consolidated financial statements.
The Directors of RELX PLC and RELX NV, having made appropriate enquiries, consider that adequate resources exist for the Group
to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis
in preparing the consolidated financial statements for the year ended 31 December 2017.
In preparing the consolidated financial statements, subsidiaries of the Group are accounted for under the acquisition method and
investments in associates and joint ventures are accounted for under the equity method. All intra-group transactions and balances
are eliminated.
On acquisition of a subsidiary, or interest in an associate or joint venture, fair values, reflecting conditions at the date of acquisition, are
attributed to the net assets, including identifiable intangible assets acquired. Adjustments are made to bring accounting policies into line
with those of the Group. The results of subsidiaries sold or acquired are included in the consolidated financial statements up to or from
the date that control passes from or to the Group.
Non-controlling interests in the net assets of the Group are identified separately from shareholders’ equity. Non-controlling interests
consist of the amount of those interests at the date of the original acquisition and the non-controlling share of changes in equity since the
date of acquisition.
Accounting policies
The Group’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union and as issued by the International Accounting Standards Board (IASB). The accounting policies under
IFRS are included in the relevant notes to the consolidated financial statements. The accounting policies below are applied throughout
the financial statements and are unchanged from those applied in preparing the consolidated financial statements for the year ended
31 December 2016 and 2015.
Foreign exchange translation
The consolidated financial statements are presented in sterling.
Transactions in foreign currencies are recorded at the rate of exchange prevailing on the date of the transaction. Non-monetary assets
and liabilities that are measured at historical cost in foreign currencies are translated using the exchange rate at the date of the transaction.
At each statement of financial position date, monetary assets and liabilities that are denominated in foreign currencies are retranslated
at the rate prevailing on the statement of financial position date. Exchange differences arising are recorded in the income statement
other than where hedge accounting applies, as set out on pages 147 to 152.
Assets and liabilities of foreign operations are translated at exchange rates prevailing on the statement of financial position date. Income
and expense items and cash flows of foreign operations are translated at the average exchange rate for the period. Significant individual
items of income and expense and cash flows in foreign operations are translated at the rate prevailing on the date of transaction.
Exchange differences arising are classified as equity and transferred to the translation reserve. When foreign operations are disposed
of, the related cumulative translation differences are recognised within the income statement in the period.
The Group uses derivative financial instruments, primarily forward contracts, to hedge its exposure to certain foreign exchange risks.
Details of the Group’s accounting policies in respect of derivative financial instruments are set out on page 147.
Financial statements and other information Notes to the consolidated financial statements
123
1 Basis of preparation and accounting policies (continued)
Critical judgements and key sources of estimation uncertainty
The most significant accounting policies in determining the financial condition and results of the Group, and those requiring the most
subjective or complex judgement, relate to and are included in the following notes:
§ valuation of goodwill and intangible assets – notes 15 and 16;
§ capitalisation of development spend – note 16;
§ taxation – note 10; and
§ accounting for defined benefit pension schemes – note 6.
Other significant accounting policies
The accounting policy in respect of revenue recognition is also significant in determining the financial condition and results of the Group,
although the application of this policy is more straightforward. This policy is included in note 2.
Standards and amendments effective for the year
The interpretations and amendments to IFRS effective for 2017 have not had a significant impact on the Group’s accounting policies
or reporting.
Standards, amendments and interpretations not yet effective
New accounting standards and amendments and their expected impact on the future accounting policies and reporting of the Group
are set out below.
IFRS 9 – Financial Instruments (effective for the 2018 financial year). The standard replaces the existing classification and measurement
requirements in IAS 39 – Financial Instruments: Recognition and Measurement. Adoption of the standard is not expected to have
a significant impact on the measurement, presentation or disclosure of financial assets and liabilities in the consolidated financial
statements. The most notable impact for the Group relates to cash flow hedge accounting, which will result in additional disclosure
in respect of the costs of hedging reserve balance and movements from 2018 onwards.
IFRS 15 – Revenue from Contracts with Customers (effective for the 2018 financial year). The new standard provides a single point of
reference for revenue recognition, including guidance in relation to identification of contracts and licensing arrangements. RELX Group
will adopt IFRS 15 on a fully retrospective basis. Management have performed a full assessment of the impact of IFRS 15. The adoption of
IFRS 15 will not result in a material change to the 2017 income statement reported numbers, and will not result in material differences to
the 2018 income statement numbers.
IFRS 16 – Leases (early adoption so as to be effective for the 2018 financial year). The new standard eliminates the distinction between
operating and finance leases and requires lessees to recognise all leases with a lease term of greater than 12 months in the statement
of financial position. RELX Group will adopt this standard a year earlier than the mandatory effective date of 1 January 2019. IFRS 16 will
be adopted on a fully retrospective basis. The majority of the RELX Group lease portfolio relates to property leases. Management have
performed a full assessment of the impact of IFRS 16.
The table below sets out the expected impact on the income statement and the most significantly impacted statement of financial
position accounts.
Income statement
Revenue
Adjusted operating profit
Reported operating profit
Net finance costs
Adjusted net profit attributable to RELX PLC and RELX NV shareholders
Reported net profit attributable to RELX PLC and RELX NV shareholders
Adjusted EPS
Reported EPS
Statement of financial position
Right of use asset
Borrowings (including lease liability)
Finance lease receivable
Deferred income
2017 as
reported
£m
IFRS 9
impact
£m
IFRS 15
impact
£m
IFRS 16
impact
£m
2017 as
restated
£m
7,355
2,284
1,905
(182)
1,635
1,659
81.0p
82.2p
16
(4,886)
–
(1,834)
–
–
–
(2)
(2)
(2)
(0.1p)
(0.1p)
–
14
–
–
(14)
(11)
(11)
–
(9)
(9)
(0.5p)
(0.5p)
–
–
–
(76)
–
11
11
(15)
(4)
–
(0.2p)
–
272
(381)
56
–
7,341
2,284
1,905
(199)
1,620
1,648
80.2p
81.6p
288
(5,253)
56
(1,910)
Additionally, a number of amendments and interpretations have been issued which are not expected to have any significant impact
on the Group’s accounting policies and reporting.
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124
Notes to the consolidated financial statements
for the year ended 31 December 2017
2 Segment analysis
Accounting policy
The Group’s reported segments are based on the internal reporting structure and financial information provided to the Boards.
Adjusted operating profit is the key segmental profit measure used by the Group in assessing performance. Adjusted operating
profit is reconciled to operating profit on page 125.
Revenue represents the value of sales less anticipated returns on transactions completed by performance, excluding customer
sales taxes.
Revenues are recognised for the various categories as follows: subscriptions – on periodic dispatch of subscribed product or
rateably over the period of the subscription where performance is not measurable by despatch; transactional – on despatch or
occurrence of the transaction; and advertising – on publication or over the period of online display.
Revenue recognition policies, while an area of management focus, are generally straightforward in application as the timing of
product or service delivery and customer acceptance for the various revenue types can be readily determined. Allowances for
product returns are deducted from revenues based on historical return rates. Where sales consist of two or more components
that operate independently, revenue is recognised as each component is completed by performance, based on attribution of
relative value.
RELX Group is a global provider of information and analytics for professional and business customers across industries operating
in four major market segments: Scientific, Technical & Medical is a global information analytics business that helps institutions and
professionals advance healthcare, open science, and improve performance for the benefit of humanity; Risk & Business Analytics
provides customers with solutions and decision tools that combine public and industry specific content with advanced technology and
analytics to assist them in evaluating and predicting risk and enhancing operational efficiency; Legal is a leading global provider of legal,
regulatory and business information and analytics that helps customers increase productivity, improve decision-making and outcomes
and advance the rule of law around the world; and Exhibitions is the world’s leading events business, enhancing the power of face-to-face
through data and digital tools at over 500 events, in 30 countries, attracting more than 7m participants.
ANALYSIS BY BUSINESS SEGMENT
Revenue
Adjusted operating profit
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
Sub-total
Unallocated items
Total
ANALYSIS OF REVENUE BY GEOGRAPHICAL ORIGIN
North America
United Kingdom
The Netherlands
Rest of Europe
Rest of world
Total
ANALYSIS OF REVENUE BY GEOGRAPHICAL MARKET
North America
United Kingdom
The Netherlands
Rest of Europe
Rest of world
Total
2017
£m
2,478
2,076
1,692
1,109
7,355
–
7,355
2016
£m
2,320
1,906
1,622
1,047
6,895
–
6,895
2015
£m
2,070
1,601
1,443
857
5,971
–
5,971
2017
£m
913
759
332
285
2,289
(5)
2,284
2017
£m
4,004
1,083
855
704
709
7,355
2017
£m
4,081
522
92
1,081
1,579
7,355
2016
£m
853
686
311
269
2,119
(5)
2,114
2016
£m
3,693
1,055
813
707
627
6,895
2016
£m
3,778
504
118
1,091
1,404
6,895
2015
£m
760
575
274
217
1,826
(4)
1,822
2015
£m
3,166
996
649
614
546
5,971
2015
£m
3,215
461
117
958
1,220
5,971
RELX Group Annual reports and financial statements 2017 Financial statements and other information Notes to the consolidated financial statements
125
2017
£m
5,399
834
1,122
7,355
2017
£m
3,808
3,449
98
7,355
2016
£m
4,954
875
1,066
6,895
2016
£m
3,618
3,163
114
6,895
2015
£m
4,179
906
886
5,971
2015
£m
3,123
2,736
112
5,971
2 Segment analysis (continued)
ANALYSIS OF REVENUE BY FORMAT
Electronic
Print
Face-to-face
Total
ANALYSIS OF REVENUE BY TYPE
Subscriptions
Transactional
Advertising
Total
ANALYSIS BY BUSINESS SEGMENT
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
Total
Expenditure on
acquired goodwill and
intangible assets
2017
£m
94
–
6
33
133
2016
£m
19
288
83
21
411
2015
£m
7
41
96
67
211
Capital expenditure
additions
Amortisation of acquired
intangible assets
Depreciation and other
amortisation
2017
£m
97
83
154
23
357
2016
£m
86
67
156
26
335
2015
£m
74
56
161
27
318
2017
£m
77
141
52
44
314
2016
£m
88
147
73
38
346
2015
£m
77
131
56
32
296
2017
£m
81
52
121
18
272
2016
£m
82
45
113
17
257
2015
£m
86
33
95
14
228
Capital expenditure comprises additions to property, plant and equipment and internally developed intangible assets. Amortisation
of acquired intangible assets includes amounts in respect of joint ventures of nil (2016: £3m; 2015: £3m) in Legal and £1m (2016: £1m;
2015: £1m) in Exhibitions.
ANALYSIS OF NON-CURRENT ASSETS BY GEOGRAPHICAL LOCATION
North America
United Kingdom
The Netherlands
Rest of Europe
Rest of world
Total
2017
£m
7,304
978
154
746
429
9,611
2016
£m
8,174
906
135
801
461
10,477
2015
£m
6,824
787
125
723
399
8,858
Non-current assets by geographical location exclude amounts relating to deferred tax, pension assets and derivative financial instruments.
Operating profit is reconciled to adjusted operating profit as follows:
RECONCILIATION OF OPERATING PROFIT TO ADJUSTED OPERATING PROFIT
Operating profit
Adjustments:
Amortisation of acquired intangible assets
Acquisition-related costs
Reclassification of tax in joint ventures
Reclassification of finance income in joint ventures
Adjusted operating profit
2017
£m
1,905
314
56
10
(1)
2,284
2016
£m
1,708
346
51
10
(1)
2,114
2015
£m
1,497
296
35
(6)
–
1,822
The share of post-tax results of joint ventures of £37m (2016: £37m; 2015: £64m) included in operating profit comprised £5m
(2016: £10m; 2015: £37m) relating to Legal, £32m (2016: £27m; 2015: £28m) relating to Exhibitions and nil (2016: nil; 2015: £1m loss)
relating to Risk & Business Analytics.
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126
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
3 Operating profit
Operating profit is stated after charging/(crediting) the following:
Staff costs
Wages and salaries
Social security costs
Pensions
Share based remuneration
Total staff costs
Depreciation and amortisation
Amortisation of acquired intangible assets
Share of joint ventures’ amortisation of acquired intangible assets
Amortisation of internally developed intangible assets
Depreciation of property, plant and equipment
Total depreciation and amortisation
Other expenses and income
Cost of sales including pre-publication costs and inventory expenses
Operating lease rentals expense
Operating lease rentals income
Note
6
16
16
18
2017
£m
1,926
213
95
39
2,273
313
1
203
69
586
2016
£m
1,767
198
111
38
2,114
342
4
189
68
603
2015
£m
1,490
169
58
34
1,751
292
4
157
71
524
2,631
104
(3)
2,488
102
(6)
2,129
90
(5)
The amortisation of acquired intangible assets is included within administration and other expenses.
4 Auditors’ remuneration
Auditors’ remuneration
Payable to the auditors of RELX PLC and RELX NV
Payable to the auditors of the Group’s subsidiaries
Audit services
Audit-related assurance services
Total audit and audit related assurance services
Tax services
Other services: Consulting
Other services: Due diligence and other transaction-related services
Total non-audit related services
Total auditors’ remuneration
2017
£m
0.9
5.6
6.5
0.8
7.3
–
–
0.3
0.3
7.6
2016
£m
2015
£m
0.9
5.3
6.2
0.6
6.8
0.4
0.1
0.4
0.9
7.7
0.8
4.2
5.0
0.8
5.8
0.9
0.2
0.3
1.4
7.2
Amounts payable to the auditors of the Group’s subsidiaries include amounts for the audit of internal controls over financial reporting
in accordance with the US Sarbanes-Oxley Act. Non-audit services performed in the Netherlands by Ernst & Young Accountants LLP in
2017 and 2016 (and Deloitte Accountants BV in 2015) are limited to audit-related assurance services. Included in audit related assurance
services for 2017 are £0.1m in fees for services relating to RELX pension plans. The previously reported 2016 fees paid to EY for audit
services have been revised to include additional amounts for expenses incurred and final fees for statutory audits which took place
subsequent to the audit of the RELX Group consolidated accounts.
5 Personnel
NUMBER OF PEOPLE EMPLOYED: FULL-TIME EQUIVALENTS
At 31 December
Average during the year
Business segment
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
Sub-total
Corporate/shared functions
Total
Geographical location
North America
United Kingdom
The Netherlands
Rest of Europe
Rest of world
Total
2017
2016
2015
2017
2016
2015
7,500
8,100
10,600
4,000
30,200
800
31,000
13,500
5,000
1,300
2,800
8,400
31,000
7,500
8,200
10,700
4,000
30,400
800
31,200
13,700
4,900
1,400
2,800
8,400
31,200
7,200
7,600
10,500
3,800
29,100
900
30,000
13,400
4,700
1,500
2,800
7,600
30,000
7,500
8,200
10,700
4,000
30,400
800
31,200
13,600
5,000
1,400
2,800
8,400
31,200
7,300
7,900
10,600
3,900
29,700
900
30,600
13,500
4,800
1,500
2,800
8,000
30,600
7,200
7,500
10,000
3,700
28,400
900
29,300
13,400
4,500
1,500
2,800
7,100
29,300
Financial statements and other information Notes to the consolidated financial statements
127
6 Pension schemes
Accounting policy
The expense of defined benefit pension schemes and other post-retirement employee benefits is determined using the projected
unit credit method and charged in the income statement as an operating expense, based on actuarial assumptions reflecting market
conditions at the beginning of the financial year. Actuarial gains and losses are recognised in full in the statement of comprehensive
income in the period in which they occur.
Past service costs and credits are recognised immediately at the earlier of when plan amendments or curtailments occur and when
related restructuring costs or termination benefits are recognised. Settlements are recognised when they occur.
Net pension obligations in respect of defined benefit schemes are included in the statement of financial position at the present value
of scheme liabilities, less the fair value of scheme assets. Where schemes are in surplus, i.e. assets exceed liabilities, the net
pension assets are separately included in the statement of financial position. Any net pension asset is limited to the extent that the
asset is recoverable.
The expense of defined contribution pension schemes and other employee benefits is charged in the income statement as incurred.
Critical judgement and key source of estimation uncertainty
At 31 December 2017, the Group operates defined benefit pension schemes in the UK and the US. These schemes require management
to exercise judgement in estimating the ultimate cost of providing post-employment benefits, especially given the length of each
scheme’s liabilities. Accounting for defined benefit pension schemes involves judgement about uncertain events, including the life
expectancy of the members, salary and pension increases, inflation, the future operation of each scheme and the rate at which the
future pension payments are discounted. Estimates for these factors are used in determining the pension cost and liabilities
reported in the financial statements. The estimates made around future developments of each of the critical assumptions are made
in conjunction with independent actuaries, and each scheme is subject to a periodic review by independent actuaries. Information
regarding some of the assumptions used for valuation is provided below, together with a sensitivity analysis.
A number of pension schemes are operated around the world. The largest defined benefit schemes as at 31 December 2017 are in the UK
and the US. In November 2015, the Netherlands defined benefit pension scheme, together with all associated assets and liabilities, was
transferred into an industry-wide collective defined contribution scheme. This scheme is now accounted for as a defined contribution
pension plan, with no deficit or surplus recognised on the balance sheet. Prior to this, the scheme was a career average salary scheme
and was open to new hires.
Major defined benefit schemes in place at 31 December 2017
The UK scheme is a final salary scheme and is closed to new hires. Members accrue a portion of their final pensionable earnings based
on the number of years of service. The US scheme is a cash balance scheme and is closed to new hires. Members earn pay credits
dependent on age and years of service up to certain limits which are added to an account balance that accrues interest at specified
minimum rates. In September 2017, it was announced the US scheme would be closed to future accruals effective 1 January 2019.
Each of the major defined benefit schemes is administered by a separate fund that is legally separated from the Group. The trustees
of the pension funds in the UK and plan fiduciaries of the US scheme are required by law to act in the interest of the funds’ beneficiaries.
In the UK, the trustees of the pension fund are responsible for the investment policy with regard to the assets of the fund. The board of
trustees consists of an equal number of company-appointed and member nominated Directors. In the US, the fiduciary duties for the
scheme are allocated between committees which are staffed by senior employees of the Group; the investment committee has the
primary responsibility for the investment and management of plan assets.
The funding of the Group’s major schemes reflects the different rules within each jurisdiction.
In the UK, the level of funding is determined by statutory triennial actuarial valuations in accordance with pensions legislation.
Where the scheme falls below 100% funded status, the Group and the scheme trustees must agree on how the deficit is to be remedied.
The UK Pensions Regulator has significant powers and sets out in codes and guidance the parameters for scheme funding.
The US scheme has an annual statutory valuation which forms the basis for establishing the employer contribution each year (subject
to ERISA and IRS minimums). Should the statutory funded status fall to below 100%, the US Pension Protection Act requires the deficit
to be rectified with additional contributions over a seven-year period.
Employer cash contributions to defined benefit pension schemes, in respect of 2018, are expected to be approximately £37m including
a pension deficit funding contribution of £20m relating to the UK scheme recovery plan.
In addition to the contributions set out above, the Group has committed to providing a further £110m of deficit funding contributions to the
UK scheme over the period from 2019 to 2022. The triennial valuation will take place during 2018, as part of which funding requirements
in future years will be reassessed.
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128
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
6 Pension schemes (continued)
The pension expense, including amounts in relation to the UK, US (for all years) and NL (for 2015 only) defined benefit schemes, and
defined contribution schemes in total, recognised within operating profit consists of:
Defined benefit pension expense (net of settlement and past service credits)
Defined contribution pension expense
Total
2017
£m
4
91
95
2016
£m
36
75
111
2015
£m
6
52
58
The amounts recognised in the income statement in respect of defined benefit pension schemes during the year are presented by major
scheme as follows:
Service cost
Settlement and past service credits
Defined benefit pension expense
Net interest on net defined benefit obligation
Net defined benefit pension expense
2017
2016
2015
UK
£m
33
(42)
(9)
10
1
US
£m
14
(1)
13
5
18
Total
£m
47
(43)
4
15
19
UK
£m
27
–
27
9
36
US
£m
14
(5)
9
5
14
Total
£m
41
(5)
36
14
50
UK
£m
34
(1)
33
14
47
US
£m
18
–
18
5
23
NL
£m
15
(60)
(45)
2
(43)
Total
£m
67
(61)
6
21
27
Net interest on net defined benefit pension scheme liabilities is presented within net finance costs in the income statement. Service cost,
including settlements and past service credits, is presented within operating profit.
The 2017 settlement and past service cost credits primarily relate to changes to the UK scheme.
Settlements and past service credits in 2015 primarily relate to the transfer of the Netherlands scheme to a collective industry-wide scheme.
The significant valuation assumptions, determined for each major scheme in conjunction with the respective independent actuaries,
are presented below. The net defined benefit pension expense for each year is based on the assumptions and scheme valuations set at
31 December of the prior year.
AS AT 31 DECEMBER
Discount rate
Inflation
2017
2016
2015
UK
2.60%
3.15%
US
3.55%
2.50%
UK
2.65%
3.25%
US
4.00%
2.50%
UK
3.85%
3.05%
US
4.45%
2.50%
Discount rates are set by reference to high-quality corporate bond yields.
Mortality assumptions make allowance for future improvements in longevity and have been determined by reference to applicable
mortality statistics. The average life expectancy assumptions are set out below:
AS AT 31 DECEMBER 2017
Member currently aged 60 years
Member currently aged 45 years
Male average life
expectancy
Female average
life expectancy
UK
86
87
US
86
87
UK
88
90
US
89
89
Financial statements and other information Notes to the consolidated financial statements
129
6 Pension schemes (continued)
The amount recognised in the statement of financial position in respect of defined benefit pension schemes at the start and end of the
year and the movements during the year were as follows:
Defined benefit obligation
At start of year
Service cost
Past service credits
Interest on pension scheme liabilities
Actuarial gain/(loss) on financial assumptions
Actuarial (loss)/gain arising from experience assumptions
Contributions by employees
Benefits paid
Liabilities transferred on settlement*
Exchange translation differences
At end of year
Fair value of scheme assets
At start of year
Interest income on plan assets
Return on assets excluding amounts included in interest income
Contributions by employer
Contributions by employees
Benefits paid
Assets transferred on settlement*
Exchange translation differences
At end of year
Opening net deficit
Service cost
Net interest on net defined benefit obligation
Settlement and past service credits
Contributions by employer
Actuarial gains/(losses)
Exchange translation differences
Overall net pension obligation
2017
US
£m
UK
£m
(3,883)
(33)
42
(101)
45
(39)
(8)
123
–
–
(3,854)
3,390
91
181
42
8
(123)
–
–
3,589
(493)
(33)
(10)
42
42
187
–
(265)
(1,120)
(14)
1
(42)
(61)
1
–
60
–
100
(1,075)
977
37
106
43
–
(60)
–
(91)
1,012
(143)
(14)
(5)
1
43
46
9
(63)
Total
£m
(5,003)
(47)
43
(143)
(16)
(38)
(8)
183
–
100
(4,929)
4,367
128
287
85
8
(183)
–
(91)
4,601
(636)
(47)
(15)
43
85
233
9
(328)
UK
£m
(3,089)
(27)
–
(117)
(774)
22
(7)
109
–
–
(3,883)
2,838
108
502
44
7
(109)
–
–
3,390
(251)
(27)
(9)
–
44
(250)
–
(493)
2016
US
£m
(955)
(14)
5
(45)
(61)
3
–
95
36
(184)
(1,120)
822
40
46
41
–
(95)
(36)
159
977
(133)
(14)
(5)
5
41
(12)
(25)
(143)
Total
£m
(4,044)
(41)
5
(162)
(835)
25
(7)
204
36
(184)
(5,003)
3,660
148
548
85
7
(204)
(36)
159
4,367
(384)
(41)
(14)
5
85
(262)
(25)
(636)
* In 2016, the settlement relates to an annuity purchase in the US.
As at 31 December 2017, the defined benefit obligations comprised £4,690m (2016: £4,760m) in relation to funded schemes and £239m
(2016: £243m) in relation to unfunded schemes.
The weighted average duration of defined benefit scheme liabilities is 20 years in the UK (2016: 20 years) and 13 years in the US
(2016: 13 years). Deferred tax assets of £66m (2016: £145m) are recognised in respect of the pension scheme deficits.
A net pension asset has been recognised in relation to the US funded scheme after considering the guidance in IAS 19 Employee Benefits
and IFRIC 14. The split between net pension obligations and net pension assets is as follows:
Net pension asset
Net pension obligation
Overall net pension obligation
2017
£m
22
(350)
(328)
2016
£m
–
(636)
(636)
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130
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
6 Pension schemes (continued)
Amounts recognised in the statement of comprehensive income are set out below:
Gains and losses arising during the year:
Experience (losses)/gains on scheme liabilities
Experience gains/(losses) on scheme assets
Actuarial (losses)/gains on the present value of scheme liabilities due to changes in:
– discount rates
– inflation
– other actuarial assumptions
Net cumulative losses at start of year
Net cumulative losses at end of year
The major categories and fair values of scheme assets at the end of the reporting period are as follows:
FAIR VALUE OF SCHEME ASSETS
Equities
Government bonds
Corporate bonds
Property funds and ground leases
Structured debt and direct lending
Cash and cash equivalents
Other
Total
UK
£m
1,252
1,395
–
620
253
46
23
3,589
2017
US
£m
143
221
622
–
–
18
8
1,012
Total
£m
1,395
1,616
622
620
253
64
31
4,601
2017
£m
(38)
287
(102)
69
17
233
(846)
(613)
UK
£m
1,261
1,390
–
487
162
69
21
3,390
2016
£m
25
548
(873)
(96)
134
(262)
(584)
(846)
2016
US
£m
330
104
527
–
–
15
1
977
2015
£m
182
(134)
96
(64)
77
157
(741)
(584)
Total
£m
1,591
1,494
527
487
162
84
22
4,367
Assets and obligations associated with the schemes are sensitive to changes in the market values of assets and the market-related
assumptions used to value scheme liabilities. In particular, adverse changes to asset values, discount rates or inflation could increase
future pension costs and funding requirements.
Typically, the Group’s schemes are exposed to: investment risks, whereby actual rates of return on plan assets may be below those
rates used to determine the defined benefit obligations, and interest rate risks, whereby scheme deficits may increase if bond yields
in the UK and the US decline and are not offset by returns in government and corporate bond portfolios. The schemes are also exposed
to other risks, such as unanticipated future increases in member longevity patterns and inflation, all potentially leading to an increase
in scheme liabilities.
Investment policies of each scheme are intended to ensure continuous payment of defined benefit pensions in the short-term and
long-term. Efforts are made to limit risks on marketable securities by adopting investment policies that diversify assets across
geographies and among equities, government and corporate bonds, property funds and cash. Asset allocations are dependent on
a variety of factors including the duration of scheme liabilities and the funded position of the plan.
All equities, government and corporate bonds have quoted prices in active markets.
Sensitivity analysis
The valuation of the Group’s pension scheme liabilities involves significant actuarial assumptions, being the life expectancy of the
members, inflation and the rate at which the future pension payments are discounted. Differences arising from actual experience or future
changes in assumptions may materially affect future pension charges. In particular, changes in assumptions for discount rates, inflation
and life expectancies that are reasonably possible would have the following approximate effects on the defined benefit pension obligations:
Increase/decrease of 0.25% in discount rate:
Increase/decrease of 0.25% in the expected inflation rate:
Increase/decrease of one year in assumed life expectancy:
£m
222
134
179
The above analysis has been calculated on the same basis used to determine the defined benefit obligation recognised in the statement
of financial position. There has been no change in the methods used to prepare the analysis compared with prior years. This sensitivity
analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that changes in the above
assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Financial statements and other information Notes to the consolidated financial statements
131
7 Share based remuneration
Accounting policy
The fair value of share based remuneration is determined at the date of grant and recognised as an expense in the income statement
on a straight-line basis over the vesting period, taking account of the estimated number of shares that are expected to vest. Market
based performance criteria are taken into account when determining the fair value at the date of grant. Non-market based performance
criteria are taken into account when estimating the number of shares expected to vest. The fair value of share based remuneration
is determined by use of a binomial or Monte Carlo simulation model as appropriate. All of the Group’s share based remuneration is
equity settled.
The Group provides a number of share based remuneration schemes to Directors and employees. The principal share based remuneration
schemes are the Executive Share Option Schemes (ESOS), the Long-Term Incentive Plan (LTIP), the Retention Share Plan (RSP) and the
Bonus Investment Plan (BIP). Share options granted under ESOS are exercisable after three years and up to ten years from the date of
grant at a price equivalent to the market value of the respective shares at the date of grant. Conditional shares granted under LTIP, RSP
and BIP are exercisable after three years for nil consideration if conditions are met. Other awards principally relate to all employee
share based saving schemes in the UK and the Netherlands.
Share based remuneration awards are, other than upon retirement or in exceptional circumstances, subject to the condition that the
employee remains in employment at the time of exercise.
Conditional shares granted under LTIP, RSP and BIP between 2014 and 2017 are subject to the achievement of growth targets of adjusted
earnings per share measured at constant exchange rates as well as the achievement of a targeted percentage return on invested capital
of the Group. LTIP grants between 2014 and 2017 and RSP grants in 2014 and 2017 are also variable subject to the achievement of a total
shareholder return performance target.
The weighted average fair value per award is based on full vesting on achievement of non-market-related performance conditions and
stochastic models for market-related components. The conditional shares and option awards are recognised in the income statement
over the vesting period, being between three and five years, on the basis of expected performance against the non-market-related
conditions, with the fair value related to market-related components unchanging.
2017 GRANTS
Share options
Conditional shares
2016 GRANTS
Share options
Conditional shares
2015 GRANTS
Share options
Conditional shares
In respect of RELX PLC
ordinary shares
In respect of RELX NV
ordinary shares
Weighted
average fair
value per
award
£
Number of
shares
’000
Weighted
average fair
value per
award
£
Number of
shares
’000
1,688
1,637
1,727
1,706
1,911
1,841
1.60
13.74
1.49
11.51
1.23
10.44
1,647
1,631
1,668
1,778
1,827
1,874
1.30
13.33
1.12
11.41
0.77
9.72
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132
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
7 Share based remuneration (continued)
The main assumptions used to determine the fair values, which have been established with advice from and data provided by
independent actuaries, are set out below:
ASSUMPTIONS FOR GRANTS MADE DURING THE YEAR
Weighted average share price at date of grant
– Share options*
– Conditional shares
Expected share price volatility
Expected option life
Expected dividend yield
Risk-free interest rate
Expected lapse rate
In respect of RELX PLC
ordinary shares
In respect of RELX NV
ordinary shares
2017
2016
2015
2017
2016
2015
£15.44
£15.07
16%
4 years
3.0%
0.3%
2-5%
£12.52
£12.68
17%
4 years
3.0%
0.7%
2-5%
£11.44
£11.55
19%
4 years
3.5%
0.8%
2-5%
€17.04
€16.71
19%
4 years
3.0%
0.0%
2-5%
€15.31
€15.28
19%
4 years
3.0%
0.0%
2-4%
€14.80
€14.98
19%
4 years
4.2%
0.0%
2-4%
* Weighted average exercise price is disclosed in the table below.
Expected share price volatility has been estimated based on relevant historical data in respect of the RELX PLC and RELX NV ordinary
share prices. Expected share option life has been estimated based on historical exercise patterns in respect of RELX PLC and RELX NV
share options.
The share based remuneration options outstanding as at 31 December 2017, in respect of both RELX PLC and RELX NV ordinary shares,
are set out below:
SHARE OPTIONS
Outstanding at 1 January 2015
Granted
Exercised
Forfeited
Expired
Outstanding at 1 January 2016
Granted
Exercised
Forfeited
Expired
Outstanding at 1 January 2017
Granted
Exercised
Forfeited
Expired
Outstanding at 31 December 2017
Exercisable at 31 December 2015
Exercisable at 31 December 2016
Exercisable at 31 December 2017
In respect of RELX PLC
ordinary shares
In respect of RELX NV
ordinary shares
Number of
shares
under option
’000
9,327
1,911
(2,053)
(254)
(191)
8,740
1,727
(1,954)
(424)
(147)
7,942
1,688
(2,130)
(394)
(140)
6,966
Weighted
average
exercise
price
(pence)
629
978
627
694
618
704
1,164
519
489
470
865
1,396
700
1,135
762
1,031
Number of
shares
under option
’000
9,468
1,827
(1,716)
(680)
(438)
8,461
1,668
(1,778)
(310)
(144)
7,897
1,647
(2,170)
(186)
(140)
7,048
Weighted
average
exercise
price
(€)
7.58
14.80
7.32
7.51
6.18
9.27
15.31
8.05
12.41
8.56
10.71
17.06
9.86
15.54
9.20
12.36
3,105
2,598
2,162
551
598
696
4,886
4,770
4,241
8.02
8.91
10.14
The weighted average share price at the date of exercise of share options and vesting of conditional shares during 2017 was 1,560p
(2016: 1,278p; 2015: 1,118p) for RELX PLC ordinary shares and €17.23 (2016: €15.23; 2015: €14.50) for RELX NV ordinary shares.
Financial statements and other information Notes to the consolidated financial statements
133
7 Share based remuneration (continued)
RANGE OF EXERCISE PRICES FOR OUTSTANDING SHARE OPTIONS
2017
2016
2015
RELX PLC ordinary shares (pence)
401-600
601-800
801-1,000
1,001-1,200
1,201-1,400
1,401-1,600
1,601-1,800
Total
RELX NV ordinary shares (€)
4.01-6.00
6.01-8.00
8.01-10.00
10.01-12.00
12.01-14.00
14.01-16.00
16.01-18.00
18.01-20.00
Total
Weighted
average
remaining
period until
expiry
(years)
Number of
shares
under option
’000
Weighted
average
remaining
period until
expiry
(years)
Number of
shares under
option
’000
Weighted
average
remaining
period until
expiry
(years)
Number of
shares under
option
’000
1,043
733
1,272
1,465
1,530
896
27
6,966
1,032
506
617
865
69
2,600
1,154
205
7,048
2.8
3.6
4.0
5.3
6.1
9.2
9.7
5.2
3.2
1.8
5.4
6.2
6.3
7.7
9.1
9.0
6.5
1,672
1,922
1,732
1,657
949
10
–
7,942
1,380
965
1,181
1,239
114
3,002
16
–
7,897
3.6
3.4
5.3
6.2
9.2
9.7
–
5.1
4.2
2.2
5.6
7.2
7.5
8.7
8.3
–
6.4
2,950
2,856
1,903
1,031
–
–
–
8,740
1,924
1,446
1,971
1,333
143
1,625
19
–
8,461
4.0
4.4
6.3
9.3
–
–
–
5.3
5.4
2.8
5.9
8.2
8.4
9.2
9.0
–
6.3
Share options are expected, upon exercise, to be met by the issue of new ordinary shares.
8 Net finance costs
Accounting policy
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial period of
time to bring to use are capitalised. All other interest on borrowings is expensed as incurred. The cost of issuing borrowings is generally
expensed over the period of borrowing so as to produce a constant periodic rate of charge.
Interest on short-term bank loans, overdrafts and commercial paper
Interest on term debt
Total borrowing costs
Losses on loans and derivatives not designated as hedges
Fair value losses on designated fair value hedge relationships
Net financing charge on defined benefit pension schemes
Finance costs
Interest on bank deposits
Fair value gains on designated fair value hedge relationships
Gains on loans and derivatives not designated as hedges
Finance income
Net finance costs
2017
£m
(10)
(152)
(162)
(9)
–
(15)
(186)
3
1
–
4
(182)
2016
£m
(15)
(160)
(175)
(14)
–
(14)
(203)
6
–
2
8
(195)
2015
£m
(11)
(141)
(152)
(3)
(1)
(21)
(177)
3
–
–
3
(174)
A net gain of £63m (2016: loss of £26m; 2015: loss of £48m) on interest rate derivatives designated as cash flow hedges was recognised in
other comprehensive income and accumulated in the hedge reserve. This included gains of £78m (2016: losses of £18m; 2015: losses of
£42m) related to foreign exchange movements on debt hedges, which were reclassified immediately to the income statement and offset
£78m (2016: £18m gains; 2015: £42m gains) of foreign exchange losses on the related debt. The remaining loss of £15m (2016: £8m;
2015: £6m) recognised in other comprehensive income may be reclassified to the income statement in future periods. Including the
£78m (2016: losses of £18m; 2015: losses of £42m) of foreign exchange gains, net gains of £65m (2016: losses of £27m; 2015: losses of
£48m) in total were transferred from the hedge reserve in the period.
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134
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
9 Disposals and other non-operating items
Accounting policy
Assets of businesses that are available for immediate sale in their current condition and for which a sales process is considered
highly probable to complete are classified as assets held for sale and are carried at the lower of carrying value and fair value less
costs to sell. Fair value is based on anticipated disposal proceeds, typically derived from firm or indicative offers from potential
acquirers. Non-current assets are not amortised or depreciated following their classification as held for sale. Liabilities of
businesses held for sale are also separately classified on the statement of financial position. Fair value movements in the venture
capital portfolio, which are classified as held for trading, are reported within disposals and other items – see note 17.
Revaluation of held for trading investments
Gain/(loss) on disposal of businesses and assets held for sale
Net gain/(loss) on disposals and other non-operating items
10 Taxation
2017
£m
5
6
11
2016
£m
(13)
(27)
(40)
2015
£m
8
(19)
(11)
Accounting policy
Tax expense comprises current and deferred tax. Current and deferred tax are charged or credited in the income statement except
to the extent that the tax arises from a transaction or event which is recognised, in the same or a different period, outside the income
statement (either in other comprehensive income, directly in equity, or through a business combination), in which case the tax
appears in the same statement as the transaction that gave rise to it.
Current tax is the amount of corporate income taxes expected to be payable or recoverable based on the profit for the period as
adjusted for items that are not taxable or not deductible, and is calculated using tax rates and laws that were enacted or substantively
enacted at the date of the statement of financial position. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. Provisions are established where appropriate
on the basis of amounts expected to be paid to the tax authorities.
Current tax includes amounts provided in respect of uncertain tax positions when management expects that, upon examination
of the uncertainty by a tax authority in possession of all relevant knowledge, it is more likely than not that an economic outflow will
occur. Changes in facts and circumstances underlying these provisions are reassessed at the date of each statement of financial
position, and the provisions are remeasured as required to reflect current information.
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the statement of financial position. Deferred tax is calculated using tax rates and laws that have been enacted or
substantively enacted at the end of the reporting period, and which are expected to apply when the related deferred tax asset
is realised or the deferred tax liability is settled.
Deferred tax liabilities are generally recognised for all taxable temporary differences but not recognised for taxable temporary
differences arising on investments in subsidiaries, associates and joint ventures where the reversal of the temporary difference
can be controlled and it is probable that the difference will not reverse in the foreseeable future. Deferred tax liabilities are not
recognised on temporary differences that arise from goodwill which is not deductible for tax purposes.
Deferred tax assets are recognised to the extent it is probable that taxable profits will be available against which the deductible
temporary differences can be utilised, and are reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are not recognised in respect of temporary differences that arise on initial recognition of assets
and liabilities acquired other than in a business combination. Deferred tax is not discounted.
Financial statements and other information Notes to the consolidated financial statements
135
10 Taxation (continued)
Accounting policy (continued)
Critical judgement and key source of estimation uncertainty
The Group is subject to tax in numerous jurisdictions, giving rise to complex tax issues that require management to exercise
judgement in making tax determinations. As a multinational enterprise, our tax returns in the countries in which we operate are
subject to tax authority audits as a matter of routine. While the Group is confident that tax returns are appropriately prepared and
filed, amounts are provided in respect of uncertain tax positions that reflect the risk with respect to tax matters under active
discussion with tax authorities, or which are otherwise considered to involve uncertainty.
Provisions against uncertain tax positions are measured using one of the following methods, depending on which of the methods
management expects will better predict the amount it will pay over to the tax authority:
§ The Single Best Estimate – where there is a single outcome that is more likely than not to occur. This will happen, for example,
where the tax outcome is binary (such as whether an entity can deduct an item of expenditure) or the range of possible outcomes
is narrow or concentrated on a single value. The most likely outcome may be that no tax is expected to be payable, in which case
the provision is nil; or
§ A Probability-Weighted Expected Value – where, on the balance of probabilities, something will be paid to the tax authority but
the possible outcomes are widely dispersed with low individual probabilities (i.e. there is no single outcome more likely than not
to occur). In this case, the provision is the sum of the probability-weighted amounts in the range.
In assessing provisions against uncertain tax positions, management uses in-house tax experts, professional firms and previous
experience to inform the evaluation of risk. However, it remains possible that uncertainties will ultimately be resolved at amounts
greater or smaller than the liabilities recorded.
In particular, although we report cross-border transactions undertaken between Group subsidiaries on an arm’s-length basis in
tax returns in accordance with OECD guidelines, transfer pricing relies on the exercise of judgement and it is frequently possible
for there to be a range of legitimate and reasonable views. This means that it is impossible to be certain that the returns basis will be
sustained on examination. Discussions with tax authorities relating to cross-border transactions and other matters are ongoing in
each of our major trading jurisdictions. Although the timing and amount of final resolution of these uncertain tax positions cannot
be reliably predicted, no significant impact on the profitability of the Group is expected in the near term.
Estimation of income taxes also includes assessments of the recoverability of deferred tax assets. Deferred tax assets are only
recognised to the extent that they are considered recoverable based on existing tax laws and forecasts of future taxable profits
against which the underlying tax deductions can be utilised. The recoverability of these assets is reassessed at the end of each
reporting period, and changes in recognition of deferred tax assets will affect the tax liability in the period of that reassessment.
Current tax
United Kingdom
The Netherlands
Rest of world
Total current tax charge
Deferred tax
Tax expense
2017
£m
(104)
(77)
(258)
(439)
372
(67)
2016
£m
(80)
(51)
(243)
(374)
70
(304)
2015
£m
(65)
(45)
(260)
(370)
72
(298)
Cash tax paid in the year was £449m (2016: £402m; 2015: £343m), which is different to the tax expense for the year set out above.
There are a number of reasons why the cash tax payments in a particular year will be different from the tax expense in the accounts:
Deferred tax:
§ Tax expense includes deferred tax, which is an accounting adjustment arising from temporary differences;
§ Temporary differences occur when an item has to be included in the income statement in one year but is taxed in another year; and
§ For the purposes of acquisition accounting only, the Group recognises deferred tax liabilities arising on intangible assets. Any unwind
of these deferred tax liabilities from the amortisation of intangible assets does not result in cash tax payments.
Timing differences:
§ Tax payments relating to a particular year’s profits are typically due partly in the year and partly in the following year.
Prior period adjustments:
§ Current tax expense is the best estimate at the end of the period of cash tax expected to be paid; and
§ To the extent the final liability is higher or lower than that estimate, any cash tax impact will occur in a later period.
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136
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
10 Taxation (continued)
Items recorded in equity and other comprehensive income:
§ Some of the benefits of tax deductions related to share based payments, pensions and hedging are credited to equity or other
comprehensive income rather than to tax expense, and so the cash tax liability will be lower than the current tax expense in years
when those deductions are available.
Set out below is a reconciliation of the difference between tax expense for the period and the theoretical expense calculated by
multiplying accounting profit by the applicable tax rate.
We believe the most meaningful applicable rate is that obtained by multiplying the accounting profits and losses of all consolidated
entities by the applicable domestic rate in each of those entities’ jurisdictions.
The net tax expense charged on profit before tax differs from the theoretical amount that would arise using the weighted average of tax
rates applicable to accounting profits and losses of the consolidated entities, as follows:
Profit before tax
Tax at average applicable rates
Tax effect of share of results of joint ventures
Expenses not deductible for tax purposes
US state taxes
Non-deductible costs of share based remuneration
Non-deductible disposal-related gains and losses
Tax losses of the period not recognised
Recognition and utilisation of tax losses that arose in prior years
Other adjustments in respect of prior periods
Deferred tax effect of changes in tax rates
Tax expense
2017
2016
2015
£m
1,734
(392)
7
(14)
(18)
(1)
(36)
(10)
16
35
346
(67)
%
22.6%
(0.4)%
0.7%
1.0%
0.1%
2.1%
0.6%
(0.9)%
(2.0)%
(19.9)%
3.9%
£m
1,473
(330)
7
(18)
(13)
(1)
(8)
(2)
32
28
1
(304)
%
22.4%
(0.5)%
1.3%
0.9%
0.1%
0.5%
0.1%
(2.1)%
(1.9)%
(0.1)%
20.7%
£m
1,312
(299)
11
(16)
(9)
(3)
4
(2)
–
16
–
(298)
%
22.8%
(0.8)%
1.1%
0.7%
0.2%
(0.3)%
0.2%
0.0%
(1.2)%
0.0%
22.7%
The weighted average applicable tax rate for the year was 22.6% (2016: 22.4%, 2015: 22.8%), reflecting the applicable rates in the
countries where the Group operates. The Group’s future tax charge will be sensitive to the geographic mix of profits and losses and
the tax rates and laws in force in the jurisdictions in which we operate.
In the UK, a reduction in the corporate tax rate from 18% to 17% from April 2020 was enacted on 6 September 2016. In the US, the Tax
Cuts and Jobs Act which includes a reduction in the federal corporate tax rate from 35% to 21% from January 2018 was enacted on
22 December 2017. Consequently, the Group has measured its US deferred tax assets and liabilities at the end of the reporting period
at a combined (federal and state) tax rate of 26%. This has resulted in the recognition of an exceptional deferred tax credit of £346m in
the income statement and a reduction in the reported tax rate to 3.9% (2016: 20.7%, 2015: 22.7%).
The following tax has been recognised in other comprehensive income or directly in equity during the year:
Tax on items that will not be reclassified to profit or loss
Tax on actuarial movements on defined benefit pension schemes
Tax on items that may be reclassified to profit or loss
Tax on fair value movements on cash flow hedges
Net tax (debit)/credit recognised in other comprehensive income
Tax credit on share based remuneration recognised directly in equity
2017
£m
(59)
(30)
(89)
8
2016
£m
45
19
64
10
2015
£m
(34)
18
(16)
17
The measurement of the US deferred tax assets and liabilities has also resulted in a charge of £10m in other comprehensive income and
a charge of £5m directly in equity.
Financial statements and other information Notes to the consolidated financial statements
137
10 Taxation (continued)
Deferred tax assets
Deferred tax liabilities
Total
2017
£m
405
(738)
(333)
2016
£m
444
(1,137)
(693)
Movements in deferred tax liabilities and assets (before taking into consideration the offsetting of balances within the same jurisdiction)
are summarised as follows:
Deferred tax liabilities
Deferred tax assets
Excess of tax
allowances
over
amortisation
£m
Acquired
intangible
assets
£m
Other
temporary
differences
£m
Excess of
amortisation
over tax
allowances
£m
Tax losses
carried
forward
£m
Pensions
liabilities
£m
Other
temporary
differences
£m
Deferred tax (liability)/asset at
1 January 2016
Credit/(charge) to profit
Credit to equity/other comprehensive
income
Acquisitions
Exchange translation differences
Deferred tax (liability)/asset at
1 January 2017
Credit/(charge) to profit
(Charge)/credit to equity/other
comprehensive income
Acquisitions
Exchange translation differences
Deferred tax (liability)/asset at
(339)
9
–
–
(63)
(393)
97
–
–
29
(702)
91
–
(38)
(118)
(767)
298
–
(2)
45
(291)
4
4
–
(55)
(338)
2
7
–
27
251
(28)
–
–
40
263
(15)
–
–
9
31 December 2017
(267)
(426)
(302)
257
32
26
–
3
9
70
22
–
–
(5)
87
103
(1)
33
–
10
145
–
(76)
–
(3)
66
Total
£m
(651)
70
54
(35)
(131)
(693)
372
(89)
(2)
79
295
(31)
17
–
46
327
(32)
(20)
–
(23)
252
(333)
Other deferred tax liabilities include temporary differences in respect of property, plant and equipment, capitalised development spend
and financial instruments. Other deferred tax assets include temporary differences in respect of share based remuneration provisions
and financial instruments.
As a result of exemptions on dividends from subsidiaries and capital gains on disposal there are no significant taxable temporary
differences associated with investments in subsidiaries, branches, associates and interests in joint arrangements.
Deferred tax assets in respect of tax losses and other deductible temporary differences have only been recognised to the extent that it is
more likely than not that sufficient taxable profits will be available to allow the asset to be recovered. Accordingly, no deferred tax asset
has been recognised in respect of unused trading losses of approximately £143m (2016: £111m) carried forward at year end. The
deferred tax asset not recognised in respect of these losses is approximately £34m (2016: £30m). Of the unrecognised losses, £30m
(2016: £31m) will expire if not utilised within ten years and £113m (2016: £80m) will expire after more than ten years.
Deferred tax assets of approximately £4m (2016: £7m) have not been recognised in respect of tax losses and other temporary
differences carried forward of £23m (2016: £42m), which can only be used to offset future capital gains.
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138
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
11 Earnings per share
Accounting policy
With effect from 6 April 2016, the UK government abolished tax credits on dividends paid after this date, including the 2015 final
dividend, which was paid in May 2016. As a result of the abolition of this credit, dividends and therefore earnings per share are equal
for both RELX PLC and RELX NV. Earnings per share is calculated by taking the reported net profit attributable to shareholders and
dividing this by the total weighted average number of shares.
In calculating earnings per share of the Group up until the end of 2015 (prior to the abolition of the tax credit), the earnings for each
class of share were calculated on the basis that earnings are fully distributed. The Group’s usual practice is for only a portion of
earnings to be distributed by way of dividends. Until the end of 2015, dividends paid to RELX PLC and RELX NV shareholders were,
other than in special circumstances, equalised at the gross level inclusive of the prevailing UK tax credit available to certain
RELX PLC shareholders. The allocation of earnings between the RELX PLC shares and the RELX NV shares reflected the differential
in dividend payments declared as a result of the tax credit, with the balance of earnings assumed to be distributed as a capital
distribution, in equal amounts per share.
Adjusted earnings per share is calculated by dividing adjusted net profit attributable to shareholders by the total weighted average
number of shares for the Group.
EARNINGS PER SHARE – FOR THE YEAR ENDED 31 DECEMBER
2017
Net profit
attributable
to RELX PLC
and RELX NV
shareholders
£m
Weighted
average
number
of shares
(millions)
EPS
(pence)
Net profit
attributable
to RELX PLC
and RELX NV
shareholders
£m
2016
Weighted
average
number
of shares
(millions)
EPS
(pence)
1,659
2,019.4
82.2p
1,161
2,062.3
56.3p
1,659
2,035.2
81.5p
1,161
2,079.8
55.8p
Basic earnings per share for RELX PLC
and RELX NV (pence)
Diluted earnings per share for RELX PLC
and RELX NV (pence)
ALLOCATION OF EARNINGS – 2015
FOR THE YEAR ENDED 31 DECEMBER
RELX PLC
Allocation of distributed earnings
Allocation of undistributed earnings
Total net profit allocated to RELX PLC shares
RELX NV
Allocation of distributed earnings
Allocation of undistributed earnings
Total net profit allocated to RELX NV shares
Total net profit attributable to RELX PLC and RELX NV shareholders
2015
£m
294
224
518
291
199
490
1,008
Financial statements and other information Notes to the consolidated financial statements
139
11 Earnings per share (continued)
EARNINGS PER SHARE – 2015
FOR THE YEAR ENDED 31 DECEMBER
Basic earnings per share
RELX PLC
RELX NV
Diluted earnings per share
RELX PLC
RELX NV
2015
Weighted
average
number of
shares
(millions)
1,116.2
992.4
EPS
(pence)
46.4p
49.4p
1,125.9
1,001.6
46.0p
48.9p
The diluted figures are calculated after taking account of potential additional ordinary shares arising from share options and
conditional shares.
ADJUSTED EARNINGS PER SHARE
2017
2016
2015
Adjusted net
profit
attributable
to RELX PLC
and RELX NV
shareholders
£m
Weighted
average
number
of shares
(millions)
Adjusted
EPS
(pence)
Adjusted net
profit
attributable to
RELX PLC and
RELX NV
shareholders
£m
Weighted
average
number of
shares
(millions)
Adjusted net
profit
attributable to
RELX PLC and
RELX NV
shareholders
£m
Weighted
average
number of
shares
(millions)
Adjusted
EPS
(pence)
Adjusted
EPS
(pence)
Adjusted earnings per share for
RELX PLC and RELX NV (pence)
1,635 2,019.4
81.0p
1,488 2,062.3
72.2p
1,275
2,108.6
60.5p
RECONCILIATION OF ADJUSTED NET PROFIT ATTRIBUTABLE TO RELX PLC AND RELX NV SHAREHOLDERS
Net profit attributable to RELX PLC and RELX NV shareholders
Adjustments (post-tax):
Amortisation of acquired intangible assets
Acquisition-related costs
Net financing charge on defined benefit pension schemes
Disposals and other non-operating items
Other deferred tax credits from intangible assets*
Exceptional tax credit
Adjusted net profit attributable to RELX PLC and RELX NV shareholders
2017
£m
1,659
356
43
11
5
(93)
(346)
1,635
2016
£m
1,161
364
38
10
6
(91)
–
1,488
2015
£m
1,008
311
27
16
(2)
(85)
–
1,275
* Movements on deferred tax liabilities arising on acquired intangible assets that do not qualify for tax amortisation.
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140
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
12 Statement of cash flows
Accounting policy
Cash and cash equivalents comprise cash balances, call deposits and other short-term highly liquid investments and are held in the
statement of financial position at fair value.
RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
Profit before tax
Disposals and other non-operating items
Net finance costs
Operating profit
Share of results of joint ventures
Amortisation of acquired intangible assets
Amortisation of internally developed intangible assets
Depreciation of property, plant and equipment
Share based remuneration
Total non-cash items
Decrease/(increase) in inventories and pre-publication costs
Decrease/(increase) in receivables
(Decrease)/increase in payables
Increase in working capital
Cash generated from operations
CASH FLOW ON ACQUISITIONS
Purchase of businesses
Investment in joint ventures
Deferred payments relating to prior year acquisitions
Total
RECONCILIATION OF NET BORROWINGS
At start of year
(Decrease)/increase in cash and cash equivalents
Decrease/(increase) in short-term bank loans, overdrafts and
commercial paper
Issuance of term debt
Repayment of term debt
Repayment of finance leases
Change in net borrowings resulting from cash flows
Inception of finance leases
Fair value and other adjustments to borrowings and related
derivatives
Exchange translation differences
At end of year
Note
13
Cash and
cash
equivalents
£m
162
Borrowings
£m
(4,843)
Related
derivative
financial
instruments
£m
(19)
(45)
–
–
–
–
(45)
–
–
(6)
111
–
152
(873)
712
5
(4)
(2)
(73)
36
(4,886)
–
(4)
–
–
–
(4)
–
64
2
43
2017
£m
1,734
(11)
182
1,905
(37)
313
203
69
39
624
2
35
(84)
(47)
2,445
2017
£m
(117)
(1)
(13)
(131)
2016
£m
1,473
40
195
1,708
(37)
342
189
68
38
637
(24)
(146)
98
(72)
2,236
2016
£m
(336)
(1)
(24)
(361)
2015
£m
1,312
11
174
1,497
(64)
292
157
71
34
554
(17)
(150)
62
(105)
1,882
2015
£m
(158)
(8)
(25)
(191)
2017
£m
(4,700)
2016
£m
(3,782)
2015
£m
(3,550)
(45)
9
(139)
148
(873)
712
5
(53)
(2)
(271)
(603)
474
7
(384)
(3)
339
(500)
186
9
(105)
(12)
(9)
32
(4,732)
(22)
(509)
(4,700)
4
(119)
(3,782)
Net borrowings comprise cash and cash equivalents, loan capital, finance leases, promissory notes, bank and other loans, derivative
financial instruments that are used to hedge certain borrowings and adjustments in respect of cash collateral received/paid. The Group
monitors net borrowings as part of capital and liquidity management.
Financial statements and other information Notes to the consolidated financial statements
141
13 Acquisitions
During the year, a number of acquisitions were made. The net assets of the businesses acquired are incorporated at their fair value to the
Group. Provisional fair values of the consideration given and of the assets and liabilities acquired are summarised below:
Goodwill
Intangible assets
Property, plant and equipment
Current assets
Current liabilities
Deferred tax
Net assets acquired
Consideration (after taking account of £7m (2016: £10m; 2015: £3m) net cash acquired)
Less: consideration deferred to future years
Less: acquisition date fair value of equity interest
Net cash flow
Fair value
2017
£m
77
56
–
3
(16)
(2)
118
118
(1)
–
117
Fair value
2016
£m
222
189
1
12
(20)
(35)
369
369
(15)
(18)
336
Fair value
2015
£m
100
111
–
9
(23)
(19)
178
178
(20)
–
158
Goodwill, being the excess of the consideration over the net tangible and intangible assets acquired, represents benefits which do not
qualify for recognition as intangible assets, including: the ability of a business to generate higher returns than individual assets; skilled
workforces; and acquisition synergies that are specific to the Group. In addition, goodwill arises on the recognition of deferred tax
liabilities in respect of intangible assets for which amortisation does not qualify for tax deductions.
The fair values of the assets and liabilities acquired in the last 12 months are provisional pending the completion of the valuation
exercises. Final fair values will be incorporated in the 2018 consolidated financial statements. There were no significant adjustments
to the provisional fair values of prior year acquisitions established in 2016.
The businesses acquired in 2017 contributed £12m to revenue, increased adjusted operating profit by £2m, decreased net profit by
£6m and contributed nil to net cash inflow from operating activities for the part year under the Group’s ownership and before taking
account of acquisition financing costs. Had the businesses been acquired at the beginning of the year, on a pro forma basis the Group
revenues, adjusted operating profit and net profit attributable to RELX PLC and RELX NV shareholders for the year would have been
£7,368m, £2,288m and £1,662m respectively, before taking account of acquisition financing costs.
14 Equity dividends
ORDINARY DIVIDENDS PAID IN THE YEAR
RELX PLC
RELX NV
Total
2017
£m
400
362
762
2016
£m
356
327
683
2015
£m
295
288
583
Ordinary dividends declared and paid in the year ended 31 December 2017, in amounts per ordinary share, comprise: a 2016 final
dividend of 25.7p (2016: 22.3p; 2015: 19p) and a 2017 interim dividend of 11.7p (2016: 10.25p; 2015: 7.4p), giving a total of 37.4p (2016: 32.55p;
2015: 26.4p) for RELX PLC; and a 2016 final dividend of €0.301 (2016: €0.288; 2015: €0.285) and a 2017 interim dividend of €0.132
(2016: €0.122; 2015: €0.115), giving a total of €0.433 (2016: €0.410; 2015: €0.400) for RELX NV.
The Directors of RELX PLC have proposed a final dividend of 27.7p (2016: 25.7p; 2015: 22.3p), giving a total for the financial year of 39.4p
(2016: 35.95p; 2015: 29.7p). The Directors of RELX NV have proposed a final dividend of €0.316 (2016: €0.301; 2015: €0.288), giving a total
for the financial year of €0.448 (2016: €0.423; 2015: €0.403). The total cost of funding the proposed final dividends is expected to be
£559m, for which no liability has been recognised at the statement of financial position date.
RELX NV dividends per share were adjusted retrospectively in 2015 to reflect the bonus issue declared on 30 June 2015.
Until the end of 2015, dividends paid to RELX PLC and RELX NV shareholders were, other than in special circumstances, equalised
at the gross level inclusive of the prevailing UK tax credit received by certain RELX PLC shareholders. With effect from 6 April 2016
the UK government abolished the dividend tax credits previously available to certain RELX PLC shareholders, impacting dividends
paid after this date.
The Employee Benefit Trust has currently waived the right to receive dividends on RELX PLC and RELX NV shares. This waiver has
been applied to dividends paid in 2017, 2016 and 2015.
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142
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
15 Goodwill
Accounting policy
On the acquisition of a subsidiary or business, the purchase consideration is allocated between the net tangible and intangible
assets on a fair value basis, with any excess purchase consideration representing goodwill. Goodwill arising on acquisitions also
includes amounts corresponding to deferred tax liabilities recognised in respect of acquired intangible assets.
Goodwill is recognised as an asset and reviewed for impairment when there is an indicator that the asset may be impaired and
at least annually. Any impairment is recognised immediately in the income statement and not subsequently reversed.
On disposal of a subsidiary or business, the attributable amount of goodwill is included in the determination of the profit or loss
on disposal.
At each statement of financial position date, the carrying amounts of tangible and intangible assets and goodwill are reviewed to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount, which is the higher of value in use and fair value less costs to sell, of the asset is estimated in order to determine
the extent, if any, of the impairment loss. Where the asset does not generate cash flows that are independent from other assets, value
in use estimates are made based on the cash flows of the cash generating unit to which the asset belongs. Intangible assets with an
indefinite useful life are tested for impairment at least annually and whenever there is any indication that the asset may be impaired.
If the recoverable amount of an asset or cash generating unit is estimated to be less than its net carrying amount, the net carrying
amount of the asset or cash generating unit is reduced to its recoverable amount. Impairment losses are recognised immediately
in the income statement in administration and other expenses.
Critical judgement and key source of estimation uncertainty
The carrying amounts of goodwill and indefinite lived intangible assets in each business are reviewed for impairment at least
annually. The carrying amounts of all other intangible assets are reviewed where there are indications of possible impairment.
An impairment review involves a comparison of the carrying value of the asset with estimated values in use based on the latest
management cash flow projections, approved by the Boards. Key areas of judgement in estimating the values in use of businesses
are the growth in cash flows over a forecast period of up to five years, the long-term growth rate assumed thereafter and the
discount rate applied to the forecast cash flows. A description of the key assumptions and sensitivities is provided below.
At start of year
Acquisitions
Disposals/reclassified as held for sale
Transfers
Exchange translation differences
At end of year
2017
£m
6,392
77
(72)
11
(443)
5,965
2016
£m
5,231
222
(19)
–
958
6,392
Transfers relate to movements in goodwill as a result of the finalisation of the accounting for prior year acquisitions.
The carrying amount of goodwill is after cumulative amortisation of £1,173m (2016: £1,284m), which was charged prior to the adoption
of IFRS, and £9m (2016: £9m) of subsequent impairment charges recorded in prior years.
Impairment review
Impairment testing of goodwill and indefinite lived intangible assets is performed at least annually in accordance with the methodology
described above. There were no charges for impairment of goodwill in 2017 (2016: nil; 2015: nil).
Goodwill is compiled and assessed among groups of cash generating units, which represent the lowest level at which goodwill is
monitored by management. Typically, acquisitions are integrated into existing business units, and the goodwill arising is allocated to the
groups of cash generating units (CGUs) that are expected to benefit from the synergies of the acquisition. As the business areas have
become increasingly integrated and globalised, the current CGU allocation reflects the global leverage of assets, skills, knowledge and
technology platforms, and the monitoring of goodwill by management.
GOODWILL
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
Total
2017
£m
1,479
2,595
1,390
501
5,965
2016
£m
1,549
2,829
1,499
515
6,392
Financial statements and other information Notes to the consolidated financial statements
143
15 Goodwill (continued)
The key assumptions used for each group of cash generating units are disclosed below:
KEY ASSUMPTIONS
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
2017
2016
Pre-tax
discount
rate
10.1%
12.3%
12.7%
12.6%
Nominal
long-term
market
growth rate
3%
3%
2%
3%
Pre-tax
discount rate
10.0%
11.7%
12.4%
12.6%
Nominal
long-term
market
growth rate
3%
3%
2%
3%
The pre-tax discount rates used are based on the Group’s weighted average cost of capital, adjusted to reflect a risk premium specific to
each business. Nominal long-term market growth rates, which are applied after the forecast period of up to five years, do not exceed the
long-term average growth prospects for the sectors and territories in which the businesses operate.
A sensitivity analysis has been performed based on changes in key assumptions considered to be reasonably possible by management:
an increase in the discount rate of 0.5%, a decrease in the compound annual growth rate for cash flow in the five-year forecast period of
2.0%, and a decrease in the nominal long-term market growth rates of 0.5%. The sensitivity analysis shows that no impairment charges
would result from these scenarios.
16 Intangible assets
Accounting policy
Intangible assets acquired as part of a business combination are stated in the statement of financial position at their fair value as
at the date of acquisition, less accumulated amortisation. Internally generated intangible assets are stated in the statement of
financial position at the directly attributable cost of creation of the asset, less accumulated amortisation.
Intangible assets acquired as part of business combinations comprise: market-related assets (e.g. trademarks, imprints, brands);
customer-related assets (e.g. subscription bases, customer lists, customer relationships); editorial content; software and systems
(e.g. application infrastructure, product delivery platforms, in-process research and development); contract-based assets
(e.g. publishing rights, exhibition rights, supply contracts); and other intangible assets. Internally generated intangible assets
typically comprise software and systems development where an identifiable asset is created that is probable to generate future
economic benefits.
Intangible assets, other than journal titles determined to have indefinite lives, are amortised on a straight-line basis over their
estimated useful lives. The estimated useful lives of intangible assets with finite lives are as follows: market and customer-related
assets – 3 to 40 years; content, software and other acquired intangible assets – 3 to 20 years; and internally developed intangible
assets – 3 to 10 years. Journal titles determined to have indefinite lives are not amortised and are subject to impairment review
at least annually, including a review of events and circumstances to ensure that they continue to support an indefinite useful life.
Critical judgements and key sources of estimation uncertainty
On acquisition of a subsidiary or business, the purchase consideration is allocated between the net tangible and intangible assets
other than goodwill on a fair value basis, with any excess purchase consideration representing goodwill. The valuation of acquired
intangible assets represents the estimated economic value in use, using standard valuation methodologies, including as
appropriate, discounted cash flow, relief from royalty and comparable market transactions. Acquired intangible assets are
capitalised and amortised systematically over their estimated useful lives, subject to impairment review. The assumptions used
are subject to management judgement.
Appropriate amortisation periods are selected based on assessments of the longevity of the brands and imprints, the strength
and stability of customer relationships, the market positions of the acquired assets and the technological and competitive risks
that they face. Certain intangible assets in relation to acquired science and medical publishing businesses have been determined
to have indefinite lives. The longevity of these assets is evidenced by their long-established and well-regarded journal titles, and
their characteristically stable market positions. The assumptions used are subject to management judgement.
Development spend embraces investment in new products and other initiatives, ranging from the building of online delivery
platforms, to launch costs of new services, to building new infrastructure and applications. Launch costs and other ongoing
operating expenses of new products and services are expensed as incurred. The costs of building product applications, platforms
and infrastructure are capitalised as intangible assets, where the investment they represent has demonstrable value and the
technical and commercial feasibility is assured. Costs eligible for capitalisation must be incremental, clearly identified and directly
attributable to a particular project. The resulting assets are amortised over their estimated useful lives. Impairment reviews are
carried out at least annually where indicators of impairment are identified. Judgement is required in the assessment of the potential
value of a development project, the identification of costs eligible for capitalisation and the selection of appropriate asset lives.
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144
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
16 Intangible assets (continued)
Cost
At 1 January 2016
Acquisitions
Additions
Disposals/reclassified as held for sale
Exchange translation differences
At 1 January 2017
Acquisitions
Additions
Disposals/reclassified as held for sale
Transfers
Exchange translation differences
At 31 December 2017
Accumulated amortisation
At 1 January 2016
Charge for the year
Disposals/reclassified as held for sale
Exchange translation differences
At 1 January 2017
Charge for the year
Disposals/reclassified as held for sale
Exchange translation differences
At 31 December 2017
Net book amount
At 31 December 2016
At 31 December 2017
Market and
customer-
related
£m
Content,
software
and other
£m
Total
acquired
intangible
assets
£m
Internally
developed
intangible
assets
£m
3,158
103
–
–
611
3,872
32
–
(26)
(50)
(309)
3,519
1,402
204
–
287
1,893
188
(16)
(158)
1,907
3,133
86
–
–
460
3,679
24
–
(76)
27
(162)
3,492
2,611
138
–
390
3,139
125
(72)
(146)
3,046
6,291
189
–
–
1,071
7,551
56
–
(102)
(23)
(471)
7,011
4,013
342
–
677
5,032
313
(88)
(304)
4,953
2,053
–
280
(100)
317
2,550
–
304
(42)
–
(121)
2,691
1,175
189
(96)
197
1,465
203
(43)
(70)
1,555
Total
£m
8,344
189
280
(100)
1,388
10,101
56
304
(144)
(23)
(592)
9,702
5,188
531
(96)
874
6,497
516
(131)
(374)
6,508
1,979
1,612
540
446
2,519
2,058
1,085
1,136
3,604
3,194
Transfers relate to movements in intangible assets as a result of the finalisation of the accounting for prior year acquisitions.
Included in content, software and other acquired intangible assets are assets with a net book value of £120m (2016: £175m) that arose
on acquisitions completed prior to the adoption of IFRS that have not been allocated to specific categories of intangible assets. Internally
developed intangible assets typically comprise software and systems development where an identifiable asset is created that is
expected to generate future economic benefits.
Included in market and customer-related intangible assets are £112m (2016: £123m) of journal titles relating to Scientific, Technical &
Medical determined to have indefinite lives based on an assessment of their historical longevity and stable market positions. In 2015,
following a review by management, £280m of brands and imprints relating to Scientific, Technical & Medical previously determined to
have an indefinite useful life were assigned a useful life of 20 years. Indefinite lived intangibles are tested for impairment at least annually.
Financial statements and other information Notes to the consolidated financial statements
145
17 Investments
Accounting policy
Investments, other than investments in joint arrangements and associates, are stated in the statement of financial position at fair
value. Investments held as part of the venture capital portfolio are classified as held for trading, with changes in fair value reported
in disposals and other non-operating items in the income statement. All other investments are classified as available for sale with
changes in fair value recognised directly in equity until the investment is disposed of or is determined to be impaired, at which time
the cumulative gain or loss previously recognised in equity is brought into the net profit or loss for the period. All items recognised
in the income statement relating to investments, other than investments in joint arrangements and associates, are reported as
disposals and other non-operating items.
Available for sale investments and venture capital investments held for trading represent investments in listed and unlisted securities.
The fair value of listed securities is determined based on quoted market prices, and of unlisted securities on management’s estimate of
fair value based on standard valuation techniques, including market comparisons and discounts of future cash flows, having regard to
maximising the use of observable inputs and adjusting for risk. Advice from valuation experts is used as appropriate.
All joint arrangements are classified as joint ventures because the Group shares joint control and has rights to the net assets of the
arrangements. Investments in joint ventures and associates are accounted for under the equity method and stated in the statement
of financial position at cost as adjusted for post-acquisition changes in the Group’s share of net assets, less any impairment in value.
Investments in joint ventures
Available for sale investments
Venture capital investments held for trading
Total
2017
£m
102
2
139
243
2016
£m
102
2
135
239
The value of venture capital investments and available for sale investments has been determined by reference to other observable
market inputs or, when these are not available, by reference to inputs we believe would reflect the assumptions market participants
would use. Gains and losses included in the consolidated income statement are provided in note 9.
An analysis of changes in the carrying value of investments in joint ventures is set out below:
At start of year
Share of results of joint ventures
Dividends received from joint ventures
Disposals and transfers
Additions
Exchange translation differences
At end of year
2017
£m
102
37
(38)
–
2
(1)
102
2016
£m
101
37
(44)
(7)
1
14
102
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146
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
17 Investments (continued)
Summarised aggregate information in respect of the Group’s share of joint ventures is set out below:
Revenue
Net profit for the year
Total assets
Total liabilities
Net assets
Goodwill
Total
RELX Group 's share
2017
£m
101
37
85
(42)
43
59
102
2016
£m
131
37
92
(49)
43
59
102
The Group’s consolidated other comprehensive income includes no income or losses relating to joint ventures in either period.
18 Property, plant and equipment
Accounting policy
Property, plant and equipment are stated in the statement of financial position at cost less accumulated depreciation. No depreciation
is provided on freehold land. Freehold buildings and long leaseholds are depreciated over their estimated useful lives up to a
maximum of 50 years. Short leases are written off over the duration of the lease. Depreciation is provided on other assets on a
straight-line basis over their estimated useful lives as follows:
– land and buildings: land – not depreciated; leasehold improvements – shorter of life of lease and 10 years;
– fixtures and equipment: plant – 3 to 20 years; office furniture, fixtures and fittings – 5 to 10 years; computer systems,
communication networks and equipment – 3 to 7 years.
Cost
At start of year
Acquisitions
Capital expenditure
Disposals/reclassified as held for sale
Exchange translation differences
At end of year
Accumulated depreciation
At start of year
Charge for the year
Disposals/reclassified as held for sale
Exchange translation differences
At end of year
2017
Land and
buildings
£m
Fixtures and
equipment
£m
231
–
5
(3)
(17)
216
139
9
(1)
(10)
137
687
–
48
(40)
(41)
654
537
60
(39)
(34)
524
Total
£m
918
–
53
(43)
(58)
870
676
69
(40)
(44)
661
Net book amount
79
130
209
2016
Land and
buildings
£m
Fixtures and
equipment
£m
205
–
6
(13)
33
231
117
9
(7)
20
139
92
595
1
48
(52)
95
687
454
59
(50)
74
537
150
Total
£m
800
1
54
(65)
128
918
571
68
(57)
94
676
242
No depreciation is provided on freehold land of £14m (2016: £16m). The net book amount of property, plant and equipment at
31 December 2017 includes £16m (2016: £20m) in respect of assets held under finance leases relating to fixtures and equipment.
Financial statements and other information Notes to the consolidated financial statements
147
19 Financial instruments
Accounting policy
Financial instruments comprise investments (other than investments in joint ventures or associates), trade receivables, cash and
cash equivalents, payables and accruals, borrowings and derivative financial instruments.
Investments (other than investments in joint ventures and associates) are classified as either held for trading or available for sale,
as described in note 17. (These investments are typically classified as either Level 2 or 3 in the IFRS 13 fair value hierarchy.) The fair
value of such investments is based on standard valuation techniques, including market comparisons and discounts of future cash
flows, having regard to maximising the use of observable inputs and adjusting for risk.
Trade receivables are carried in the statement of financial position at invoiced value less allowance for estimated irrecoverable
amounts. Irrecoverable amounts are estimated based on the ageing of trade receivables, experience and circumstance. Borrowings
and payables are recorded initially at fair value and subsequently carried at amortised cost (other than fixed rate borrowings in
designated hedging relationships for which the carrying amount of the hedged portion of the borrowings is subsequently adjusted
for the gain or loss attributable to the hedged risk).
Derivative financial instruments are used to hedge interest rate and foreign exchange risks. Where an effective hedge is in place
against changes in the fair value of fixed rate borrowings, the hedged borrowings are adjusted for changes in fair value attributable
to the risk being hedged with a corresponding income or expense included in the income statement within finance costs. The
offsetting gains or losses from remeasuring the fair value of the related derivatives are also recognised in the income statement
within finance costs. When the related derivative expires, is sold or terminated, or no longer qualifies for hedge accounting, the
cumulative change in fair value of the hedged borrowing is amortised in the income statement over the period to maturity of the
borrowing using the effective interest method.
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are
recognised (net of tax) in other comprehensive income and accumulated in the hedge reserve. If a hedged firm commitment or
forecasted transaction results in the recognition of a non-financial asset or liability, then, at the time that the asset or liability is
recognised, the associated gains or losses on the derivative that had previously been recognised in other comprehensive income are
included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of an asset or a liability,
amounts deferred in the hedge reserve are recognised in the income statement in the same period in which the hedged item affects
net profit or loss. Any ineffective portion of hedges is recognised immediately in the income statement.
Cash flow hedge accounting is discontinued when a hedging instrument expires or is sold, terminated or exercised, or no longer
qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in other
comprehensive income is either retained in the hedge reserve until the firm commitment or forecasted transaction occurs, or,
where a hedged transaction is no longer expected to occur, is immediately credited or expensed in the income statement.
Derivative financial instruments that are not designated as hedging instruments are classified as held for trading and recorded in
the statement of financial position at fair value, with changes in fair value recognised in the income statement.
The fair values of interest rate swaps, interest rate options, forward rate agreements and forward foreign exchange contracts
represent the replacement costs calculated using observable market rates of interest and exchange. The fair value of long-term
borrowings is calculated by discounting expected future cash flows at observable market rates. (These instruments are accordingly
classified as Level 2 in the IFRS 13 fair value hierarchy).
The main financial risks faced by the Group are liquidity risk, market risk – comprising interest rate risk and foreign exchange risk –
and credit risk. Financial instruments are used to finance the Group's businesses and to manage interest rate and foreign exchange
risks. The Group’s businesses do not enter into speculative derivative transactions. Details of financial instruments subject to liquidity,
market and credit risks are described below.
Liquidity risk
The Group maintains a range of borrowing facilities and debt programmes to fund its requirements at competitive rates.
The balance of long-term debt, short-term debt and committed bank facilities is managed to provide security of funding, taking into account the
cash generation cycle of the business and the uncertain size and timing of acquisition spend. To accommodate the significant free cash flow
generated by the Group and to capitalise on an inexpensive source of funding, a meaningful portion of the overall debt portfolio is typically kept
short-term as long as there exists acceptable liquidity in the commercial paper markets and sufficient capacity under committed credit lines.
The Group's treasury policies ensure adequate liquidity by requiring that (a) no more than $1.5bn of term debt matures in any 12-month period,
(b) the sum of term debt maturing over the ensuing 12 months plus short-term borrowings is less than the sum of available cash plus
committed facilities and (c) minimum levels of borrowing with maturities over three and five years are maintained.
The treasury policies ensure debt efficiency by (a) targeting certain levels of short-term borrowings across a given year, (b) maintaining a
weighted average maturity of the gross debt portfolio of approximately five years and (c) minimising surplus cash balances. From time to
time, based on cash flow and market conditions, the Group may redeem term debt early or repurchase outstanding debt in the open market.
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148
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
19 Financial instruments (continued)
Debt is issued to meet the funding requirements of various jurisdictions and in the currencies that are needed. It is recognised that debt
can act as a natural translation hedge of earnings, net assets and net cash flow in currencies other than the reporting currency. For this
reason, the majority of the Group’s net debt is denominated in US dollars and euros, reflecting the Group’s largest geographical markets.
There were no changes to the Group’s long-term approach to capital and liquidity management during the year.
The remaining contractual maturities for borrowings and derivative financial instruments are shown in the table below. The table shows
undiscounted principal and interest cash flows and includes contractual gross cash flows to be exchanged as part of cross-currency
interest rate swaps and forward foreign exchange contracts where there is a legal right of set-off.
AT 31 DECEMBER 2017
Contractual cash flow
Borrowings
Fixed rate borrowings
Floating rate borrowings
Derivative financial liabilities
Interest rate derivatives
Cross-currency interest rate swaps
Forward foreign exchange contracts
Derivative financial assets
Interest rate derivatives
Cross-currency interest rate swaps
Forward foreign exchange contracts
Total
Carrying
amount
£m
Within
1 year
£m
1-2 years
£m
2-3 years
£m
3-4 years
£m
4-5 years
£m
More than
5 years
£m
Total
£m
(4,417)
(469)
(336)
(464)
(706)
–
(577)
–
(518)
–
(805)
–
(2,198)
(5)
(5,140)
(469)
(13)
(2)
(42)
(1)
(258)
(2,148)
20
42
53
(4,828)
13
246
2,139
(809)
(1)
(17)
(418)
11
7
422
(702)
(2)
(18)
(188)
10
7
193
(575)
(2)
(18)
(41)
1
7
42
(529)
(4)
(18)
–
–
7
–
(820)
(8)
(541)
–
(18)
(870)
(2,795)
–
554
–
(2,198)
35
828
2,796
(5,633)
AT 31 DECEMBER 2016
Contractual cash flow
Borrowings
Fixed rate borrowings
Floating rate borrowings
Derivative financial liabilities
Interest rate derivatives
Cross-currency interest rate swaps
Forward foreign exchange contracts
Derivative financial assets
Interest rate derivatives
Cross-currency interest rate swaps
Forward foreign exchange contracts
Total
Carrying
amount
£m
(3,937)
(906)
Within
1 year
£m
(479)
(822)
(14)
(37)
(144)
–
(21)
(1,675)
35
13
21
(4,969)
17
9
1,598
(1,373)
1-2 years
£m
2-3 years
£m
3-4 years
£m
4-5 years
£m
(345)
(2)
–
(252)
(512)
8
234
467
(402)
(733)
(82)
(1)
(18)
(215)
8
7
205
(829)
(555)
–
(2)
(20)
(51)
9
7
51
(561)
(72)
–
(2)
(20)
–
–
7
–
(87)
More than
5 years
£m
Total
£m
(2,617)
(4)
(4,801)
(910)
(12)
(618)
–
(17)
(949)
(2,453)
–
539
–
(2,712)
42
803
2,321
(5,964)
The carrying amount of derivative financial liabilities comprises £15m (2016: £16m) in relation to fair value hedges, £30m (2016: £153m)
in relation to cash flow hedges and £12m (2016: £30m) not designated as hedging instruments. The carrying amount of derivative
financial assets comprises £20m (2016: £32m) in relation to fair value hedges, £81m (2016: £22m) in relation to cash flow hedges and
£14m (2016: £15m) not designated as hedging instruments, less nil of cash collateral received from swap counterparties which has been
offset against the related derivative financial assets (2016: £4m of cash collateral paid to swap counterparties which has been offset
against the related derivative liabilities) (see 'Credit risk' below). The expected cash flows in respect of the cash collateral have been
included in the tables above together with the cash flows for the related cross-currency interest rate swaps.
Financial statements and other information Notes to the consolidated financial statements
149
19 Financial instruments (continued)
At 31 December 2017, the Group had access to a $2,000m committed bank facility maturing in July 2020, which was undrawn. This facility
backs up short-term borrowings. All borrowings that mature within the next two years can be covered by the facility and by utilising
available cash resources.
The committed bank facility is subject to financial covenants typical to the Group’s size and financial strength. The Group had significant
headroom within these covenants for the year ended 31 December 2017. There are no financial covenants in any outstanding public bonds.
Market risk
The Group’s primary market risks are to interest rate fluctuations and exchange rate movements. Derivatives are used to manage the
risks associated with interest rate and exchange rate movements and the Group does not enter into speculative derivatives. Derivatives
used by the Group for hedging a particular risk are not specialised and are generally available from numerous sources. The impact of
market risks on net post-employment benefit obligations and taxation is excluded from the following market risk sensitivity analysis.
Interest rate exposure management
The Group’s interest rate exposure management policy aims to minimise interest costs with an acceptable level of year on year volatility.
To achieve this, the Group uses fixed rate term debt, interest rate swaps, forward rate agreements and interest rate options. Interest
rate derivatives are used only to hedge an underlying risk and no net market positions are held.
At 31 December 2017, 44% of gross borrowings were either fixed rate or had been fixed through the use of interest rate swaps, forward
rate agreements and options. A 100 basis point reduction in interest rates would result in an estimated decrease in net finance costs of
£26m (2016: £25m), based on the composition of financial instruments including cash, cash equivalents, bank loans and commercial
paper borrowings at 31 December 2017. A 100 basis point rise in interest rates would result in an estimated increase in net finance costs
of £26m (2016: £25m).
The impact on net equity of a theoretical change in interest rates as at 31 December 2017 is restricted to the change in carrying value
of floating rate to fixed rate interest rate derivatives in a designated cash flow hedge relationship and undesignated interest rate derivatives.
A 100 basis point reduction in interest rates would result in an estimated increase in net equity of £2m (2016: £2m) and a 100 basis point
increase in interest rates would reduce net equity by an estimated £2m (2016: £2m). The impact of a change in interest rates on the carrying
value of fixed rate borrowings in a designated fair value hedge relationship would be offset by the change in carrying value of the related
interest rate derivative. Fixed rate borrowings not in a designated hedging relationship are carried at amortised cost.
Foreign currency exposure management
Translation exposures arise on the earnings and net assets of individual businesses whose operational currencies are other than sterling.
Some of these exposures are offset by denominating borrowings in US dollars, euros and other currencies. Currency exposures on
transactions denominated in a foreign currency are generally hedged using forward contracts. In addition, recurring transactions and
future investment exposures may be hedged, in advance of becoming contractual. The precise policy differs according to the specific
circumstances of the individual businesses. Highly predictable future cash flows may be covered for transactions expected to occur during
the next 24 months (50 months for the Scientific, Technical & Medical subscription businesses) within limits defined according to the period
before the transaction is expected to become contractual. Cover takes the form of foreign exchange forward contracts.
As at 31 December 2017, the amount of outstanding foreign exchange cover against future transactions was £1.3bn (2016: £1.5bn).
A theoretical weakening of all currencies by 10% against sterling at 31 December 2017 would decrease the carrying value of net
assets, excluding net borrowings, by £630m (2016: £658m). This would be offset to a degree by a decrease in net borrowings of £448m
(2016: £389m). A strengthening of all currencies by 10% against sterling at 31 December 2017 would increase the carrying value of net
assets, excluding net borrowings, by £630m (2016: £658m) and increase net borrowings by £448m (2016: £389m).
A retranslation of the Group's net profit for the year, assuming a 10% weakening of all foreign currencies against sterling but excluding
transactional exposures, would reduce net profit by £148m (2016: £105m). A 10% strengthening of all foreign currencies against sterling
on this basis would increase net profit for the year by £148m (2016: £105m).
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150
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
19 Financial instruments (continued)
Credit risk
The Group seeks to manage interest rate risk and limit foreign exchange risks described above by the use of financial instruments
and as a result has a credit risk from the potential non-performance by the counterparties to these financial instruments, which are
unsecured. The amount of this credit risk is normally restricted to the amounts of any hedge gain and not the principal amount being
hedged. The Group also has a credit exposure to counterparties for the full principal amount of cash and cash equivalents. Credit risks
are controlled by monitoring the credit quality of these counterparties, principally licensed commercial banks and investment banks
with strong long-term credit ratings, and the amounts outstanding with each of them.
In certain situations, the Group enters into credit support arrangements with derivative counterparties to mitigate the credit exposures
arising from hedge gains on the related financial instruments. Under these arrangements, the Group receives (or pays) cash collateral
equal to the mark to market valuation of the related derivative asset (or liability) on monthly settlement dates. At 31 December 2017, nil
cash collateral had been received, resulting in no payable balance to be offset against the related derivative assets of £2m in the
statement of financial position (2016: £4m of cash collateral paid and the resulting receivable balance offset against the related
derivative liabilities of £5m).
The Group has treasury policies in place which do not allow concentrations of risk with individual counterparties and do not allow
significant treasury exposures with counterparties which are rated lower than A-/A3 by Standard & Poor’s, Moody’s and Fitch.
At 31 December 2017, cash and cash equivalents totalled £111m (2016: £162m), of which 90% (2016: 94%) was held with banks rated
A-/A3 or better.
The Group also has credit risk with respect to trade receivables due from its customers, which include national and state governments,
academic institutions and large and small enterprises including law firms, book stores and wholesalers. The concentration of credit
risk from trade receivables is limited due to the large and broad customer base. Trade receivable exposures are managed locally in the
business units where they arise. Where appropriate, business units seek to minimise this exposure by taking payment in advance and
through management of credit terms. Allowance is made for bad and doubtful debts based on management’s assessment of the risk
taking into account the ageing profile, experience and circumstance. The maximum exposure to credit risk is represented by the
carrying amount of each financial asset, including derivative financial instruments, recorded in the statement of financial position.
Included within trade receivables are the following amounts which are past due but for which no allowance has been made: past due up
to one month £220m (2016: £187m); past due two to three months £97m (2016: £96m); past due four to six months £44m (2016: £45m);
and past due greater than six months £40m (2016: £31m). Examples of trade receivables which are past due but for which no allowance
has been made include those receivables where there is no concern over the creditworthiness of the customer and where the history
of dealings with the customer indicate the amount will be settled.
Hedge accounting
The hedging relationships that are designated under IAS 39 – Financial Instruments are described below.
Fair value hedges
The Group has entered into interest rate swaps and cross-currency interest rate swaps to hedge the exposure to changes in the fair
value of fixed rate borrowings due to interest rate and foreign currency movements which could affect the income statement. Interest
rate derivatives (including cross-currency interest rate swaps) with a principal amount of £2,021m (2016: £1,403m) were in place at 31
December 2017 swapping fixed rate term debt issues denominated in US dollars (USD) and euros to floating rate USD and euro debt
respectively for the whole or part of their term.
Financial statements and other information Notes to the consolidated financial statements
151
19 Financial instruments (continued)
The gains and losses on the borrowings and related derivatives designated as fair value hedges, which are included in the income
statement, for the three years ended 31 December 2017, 2016 and 2015 were as follows:
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
USD debt
Related interest rate swaps
EUR debt
Related interest rate swaps
Total relating to USD and EUR debt
Total related interest rate swaps
Net (loss)/gain
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
USD debt
Related interest rate swaps
GBP debt
Related interest rate swaps
EUR debt
Related interest rate swaps
Total relating to USD, GBP and EUR debt
Total related interest rate swaps
Net loss
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
USD debt
Related interest rate swaps
GBP debt
Related interest rate swaps
EUR debt
Related interest rate swaps
Total relating to USD, GBP and EUR debt
Total related interest rate swaps
Net loss
1 January
2017
£m
16
(16)
–
(33)
32
(1)
(17)
16
(1)
Fair value
movement
gain/(loss)
£m
(1)
1
–
17
(16)
1
16
(15)
1
De-
designated
£m
(2)
2
–
–
–
–
(2)
2
–
Exchange
gain/(loss)
£m
(1)
1
–
(1)
1
–
(2)
2
–
1 January
2016
£m
2
(2)
–
(14)
14
–
(9)
8
(1)
(21)
20
(1)
Fair value
movement
gain/(loss)
£m
13
(13)
–
–
–
–
(21)
21
–
(8)
8
–
1 January
2015
£m
3
(3)
–
(20)
20
–
(26)
26
–
(43)
43
–
De-
designated
£m
–
–
–
14
(14)
–
–
–
–
14
(14)
–
Fair value
movement
gain/(loss)
£m
(2)
2
–
6
(6)
–
15
(16)
(1)
19
(20)
(1)
Exchange
gain/(loss)
£m
1
(1)
–
–
–
–
(3)
3
–
(2)
2
–
Exchange
gain/(loss)
£m
1
(1)
–
–
–
–
2
(2)
–
3
(3)
–
31
December
2017
£m
12
(12)
–
(17)
17
–
(5)
5
–
31
December
2016
£m
16
(16)
–
–
–
–
(33)
32
(1)
(17)
16
(1)
31
December
2015
£m
2
(2)
–
(14)
14
–
(9)
8
(1)
(21)
20
(1)
All fair value hedges were highly effective throughout the three years ended 31 December 2017.
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152
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
19 Financial instruments (continued)
Gross borrowings as at 31 December 2017 included £24m (2016: £30m) in relation to fair value adjustments to borrowings previously
designated in a fair value hedge relationship which were de-designated in 2008. The related derivatives were closed out on de-designation
with a cash inflow of £62m. £3m (2016: £3m) of these fair value adjustments were amortised in the year as a reduction to finance costs.
Gross borrowings were also reduced by £2m (2016: increased by £6m) in relation to fair value adjustments to borrowings previously
designated in a fair value hedging relationship which were de-designated during the year or prior year. £6m (2016: £8m) of these fair
value adjustments were amortised in the year as a reduction to finance costs. The related derivatives remained on the balance sheet
at 31 December 2017 with a carrying value of £2m (2016: £8m).
Cash flow hedges
The Group enters into two types of cash flow hedge:
1
Debt hedges comprising interest rate derivatives which fix the interest expense on a portion of forecast floating rate debt (including
commercial paper, short-term bank loans and floating rate term debt), and cross-currency interest rate derivatives which hedge the
cash flow exposure arising from foreign currency denominated debt.
2
Revenue hedges comprising forward foreign exchange contracts which fix the exchange rate on a portion of future foreign currency
subscription revenues forecast by the businesses for up to 50 months.
Movements in the hedge reserve in 2016 and 2017, including gains and losses on cash flow hedging instruments, were as follows:
Hedge reserve at 1 January 2016: gains/(losses) deferred
Losses arising in 2016
Amounts recognised in income statement
Exchange translation differences
Hedge reserve at 1 January 2017: gains/(losses) deferred
Gains arising in 2017
Amounts recognised in income statement
Exchange translation differences
Hedge reserve at 31 December 2017: gains/(losses) deferred
Debt
hedges
£m
6
(26)
27
1
8
63
(65)
(1)
5
Revenue
hedges
£m
(44)
(139)
19
Total hedge
reserve
pre-tax
£m
(38)
(165)
46
(5)
(169)
74
90
(2)
(7)
(4)
(161)
137
25
(3)
(2)
All cash flow hedges were highly effective throughout the two years ended 31 December 2017.
A deferred tax charge of £1m (2016: credit of £28m; 2015: credit of £8m) in respect of the above gains and losses at 31 December 2017
was also deferred in the hedge reserve.
Of the amounts recognised in the income statement in the year, losses of £90m (2016: losses of £19m; 2015: gains of £19m) were
recognised in revenue, and gains of £65m (2016: losses of £27m; 2015: losses of £48m) were recognised in finance costs. A tax credit
of £1m (2016: £12m; 2015: £1m) was recognised in relation to these items.
The deferred gains and losses on cash flow hedges at 31 December 2017 are currently expected to be recognised in the income
statement in future years as follows:
2018
2019
2020
2021
2022 and beyond
Gains/(losses) deferred in hedge reserve at end of year
Debt
hedges
£m
3
(1)
(2)
(2)
7
5
Revenue
hedges
£m
(18)
–
10
1
–
(7)
Total hedge
reserve
pre-tax
£m
(15)
(1)
8
(1)
7
(2)
The cash flows for these hedges are expected to occur in line with the recognition of the gains and losses in the income statement, other
than in respect of certain forward foreign exchange hedges on subscriptions, where cash flows may be expected to occur in advance of
the subscription year.
Financial statements and other information Notes to the consolidated financial statements
153
20 Inventories and pre-publication costs
Accounting policy
Inventories and pre-publication costs are stated at the lower of cost, including appropriate attributable overhead, and estimated net
realisable value. Such costs typically comprise direct internal labour costs and externally commissioned editorial and other fees.
Pre-publication costs, representing costs incurred in the origination of content prior to publication, are expensed systematically
reflecting the expected sales profile over the estimated economic lives of the related products, generally up to five years.
Annual reviews are carried out to assess the recoverability of carrying amounts.
Raw materials
Pre-publication costs
Finished goods
Total
21 Trade and other receivables
Trade receivables
Allowance for doubtful debts
Prepayments and accrued income
Total
2017
£m
2
157
38
197
2016
£m
2
152
55
209
2017
£m
1,682
(79)
1,603
219
1,822
2016
£m
1,782
(56)
1,726
230
1,956
Trade receivables are predominantly non-interest bearing and their carrying amounts approximate to their fair value.
Trade receivables are stated net of a provision for allowances for doubtful debts. The movements in the provision during the year were
as follows:
At start of year
Charge for the year
Trade receivables written off
Exchange translation differences
At end of year
22 Trade and other payables
Trade payables
Accruals
Social security and other taxes
Other payables
Deferred income
Total
2017
£m
56
39
(15)
(1)
79
2017
£m
240
670
114
379
1,834
3,237
2016
£m
51
4
(6)
7
56
2016
£m
297
650
114
423
1,941
3,425
Trade and other payables are predominantly non-interest bearing and their carrying amounts approximate to their fair value.
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RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
23 Borrowings
Accounting policy
Borrowings are recorded initially at fair value and subsequently carried at amortised cost, other than fixed rate borrowings in
designated hedging relationships for which the carrying amount of the hedged portion of the borrowings is subsequently adjusted
for the gain or loss attributable to the hedged risk. When the related derivative in such a hedging relationship expires, is sold or
terminated, or no longer qualifies for hedge accounting, the cumulative change in fair value of the hedged borrowing is amortised
in the income statement over the period to maturity of the borrowing using the effective interest method.
Financial liabilities measured at amortised cost:
Short-term bank loans, overdrafts and commercial paper
Term debt
Finance leases
Term debt in fair value hedging relationships
Term debt previously in fair value hedging relationships
Total
2017
Falling due
within
1 year
£m
Falling due
in more than
1 year
£m
464
209
5
–
–
678
–
1,696
5
2,069
438
4,208
2016
Falling due
within
1 year
£m
Falling due in
more than
1 year
£m
521
299
5
–
334
1,159
–
2,021
9
1,399
255
3,684
Total
£m
464
1,905
10
2,069
438
4,886
Total
£m
521
2,320
14
1,399
589
4,843
The total fair value of financial liabilities measured at amortised cost is £2,532m (2016: £3,071m). The total fair value of term debt in fair
value hedging relationships is £2,148m (2016: £1,517m). The total fair value of term debt previously in fair value hedging relationships is
£501m (2016: £660m).
RELX PLC and RELX NV have given joint and several guarantees of certain long-term and short-term borrowings issued by subsidiaries
of RELX Group plc. Included within term debt above are debt securities issued by RELX Capital Inc., a 100% indirectly-owned finance
subsidiary of RELX PLC and RELX NV, which have been registered with the US Securities and Exchange Commission. RELX PLC and
RELX NV have fully and unconditionally guaranteed these securities, which are not guaranteed by any other subsidiary of RELX PLC
and RELX NV.
Analysis by year of repayment
2017
2016
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
464
–
–
–
–
–
–
464
Term debt
£m
209
593
508
444
644
2,014
4,203
4,412
Finance
leases
£m
5
3
2
–
–
–
5
10
Total
£m
678
596
510
444
644
2,014
4,208
4,886
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
521
–
–
–
–
–
–
521
Term debt
£m
633
219
700
496
–
2,260
3,675
4,308
Finance
leases
£m
5
4
3
2
–
–
9
14
Total
£m
1,159
223
703
498
–
2,260
3,684
4,843
Within 1 year
Within 1 to 2 years
Within 2 to 3 years
Within 3 to 4 years
Within 4 to 5 years
After 5 years
After 1 year
Total
Short-term bank loans, overdrafts and commercial paper were backed up at 31 December 2017 by a $2,000m (£1,479m) committed bank
facility maturing in July 2020, which was undrawn.
Financial statements and other information Notes to the consolidated financial statements
155
23 Borrowings (continued)
Analysis by currency
US dollars
£ sterling
Euro
Other currencies
Total
2017
2016
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
103
262
76
23
464
Term debt
£m
2,058
299
2,055
–
4,412
Finance
leases
£m
10
–
–
–
10
Total
£m
2,171
561
2,131
23
4,886
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
13
189
240
79
521
Term debt
£m
2,274
604
1,430
–
4,308
Finance
leases
£m
14
–
–
–
14
Total
£m
2,301
793
1,670
79
4,843
Included in the US dollar amounts for term debt above is £742m (2016: £732m) of debt denominated in euros (€600m; 2016: €600m) and
Swiss francs (CHF 275m; 2016: CHF 275m) that was swapped into US dollars on issuance and against which there are related derivative
financial instruments, which, as at 31 December 2017, had a fair value of £38m (2016: £39m).
24 Lease arrangements
Accounting policy
Assets held under leases which confer rights and obligations similar to those attaching to owned assets are classified as assets
held under finance leases and capitalised within property, plant and equipment or software and the corresponding liability to pay
rentals is shown net of interest in the statement of financial position as obligations under finance leases. The capitalised value of the
assets is depreciated on a straight-line basis over the shorter of the periods of the leases or the useful lives of the assets concerned.
The interest element of the lease payments is allocated so as to produce a constant periodic rate of charge.
Operating lease rentals are charged to the income statement on a straight-line basis over the period of the leases. Rental income
from operating leases is recognised on a straight-line basis over the term of the relevant lease.
The Group has exposures to sub-lease shortfalls in respect of certain property leases for periods up to 2024. Provisions are
recognised for net liabilities expected to arise on these exposures. Estimation of the provisions requires judgement in respect
of future head lease costs, sub-lease income and the length of vacancy periods.
Finance leases
At 31 December 2017, future finance lease obligations fall due as follows:
Within one year
In the second to fifth years inclusive
Less: future finance charges
Total
Present value of future finance lease obligations payable:
Within one year
In the second to fifth years inclusive
Total
The fair value of the lease obligations approximates to their carrying amount.
2017
£m
2016
£m
5
5
10
–
10
5
5
10
5
9
14
–
14
5
9
14
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156
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
24 Lease arrangements (continued)
Operating leases
At 31 December 2017, outstanding commitments under non-cancellable operating leases fall due as follows:
Within one year
In the second to fifth years inclusive
After five years
Total
2017
£m
109
287
88
484
2016
£m
114
338
115
567
The Group leases various properties, principally offices, which have varying terms and renewal rights that are typical to the territory
in which they are located. Of the above outstanding commitments, £478m (2016: £559m) relate to land and buildings.
The Group has a number of properties that are sub-leased. The future lease receivables contracted with sub-tenants fall due as follows:
Within one year
In the second to fifth years inclusive
After five years
Total
25 Provisions
2017
£m
21
60
1
82
2016
£m
17
68
–
85
Accounting policy
Provisions are recognised when a present obligation exists as a result of a past event, the obligation is reasonably estimable, and it
is probable that settlement will be required. Provisions are measured at the best estimate of the expenditure required to settle the
obligation at the statement of financial position date.
At start of year
Utilised
Exchange translation differences
Total
2017
£m
112
(24)
(7)
81
2016
£m
121
(24)
15
112
Provisions principally relate to leasehold properties, including sub-lease shortfalls and guarantees given in respect of certain property
leases for various periods up to 2024.
At 31 December 2017, provisions are included within current and non-current liabilities as follows:
Current liabilities
Non-current liabilities
Total
2017
£m
19
62
81
2016
£m
23
89
112
Financial statements and other information Notes to the consolidated financial statements
157
26 Share capital, share premium and shares held in treasury
Accounting policy
Shares of RELX PLC and RELX NV that are repurchased by the respective company and not cancelled are classified as shares held in
treasury. The consideration paid, including directly attributable costs, is recognised as a deduction from equity. Shares of RELX PLC
and RELX NV that are purchased by the Employee Benefit Trust are also classified as shares held in treasury, with the cost
recognised as a deduction from equity. The consolidated share capital of the Group is the aggregate of the RELX PLC and RELX NV
individual share capitals.
RELX PLC
CALLED UP SHARE CAPITAL – ISSUED AND FULLY PAID
At start of year
Issue of ordinary shares
Cancellation of shares
At end of year
RELX NV
CALLED UP SHARE CAPITAL – ISSUED AND FULLY PAID
At start of year
Issue of ordinary shares
Cancellation of shares
At end of year
At end of year*
No. of shares
1,144,122,623
2,019,483
(22,460,000)
1,123,682,106
No. of shares
1,019,893,404
2,067,694
(22,000,000)
999,961,098
2017
£m
165
–
(3)
162
2017
€m
71
–
(1)
70
£m
62
No. of shares
1,175,914,837
1,907,786
(33,700,000)
1,144,122,623
No. of shares
1,048,162,690
1,730,714
(30,000,000)
1,019,893,404
2016
£m
170
–
(5)
165
2016
€m
73
–
(2)
71
£m
61
* The RELX NV sterling information has been translated using the exchange rates as disclosed in note 29 to the consolidated
financial statements.
NUMBER OF ORDINARY SHARES
Year ended 31 December
RELX PLC
At start of period
Issue of ordinary shares
Repurchase of ordinary shares
Net release of shares by the Employee Benefit Trust
Cancellation of shares
At end of year
RELX NV
At start of period
Issue of ordinary shares
Repurchase of ordinary shares
Net release of shares by the Employee Benefit Trust
Cancellation of shares
At end of year
Shares in
issue
(millions)
Treasury
shares
(millions)
2017
Shares in
issue net of
treasury
shares
(millions)
2016
Shares in
issue net of
treasury
shares
(millions)
1,144.1
2.0
–
–
(22.5)
1,123.6
1,019.9
2.1
–
–
(22.0)
1,000.0
(63.6)
–
(23.1)
0.7
22.5
(63.5)
(57.7)
–
(21.4)
0.7
22.0
(56.4)
1,080.5
2.0
(23.1)
0.7
–
1,060.1
962.2
2.1
(21.4)
0.7
–
943.6
1,106.6
1.9
(29.2)
1.2
–
1,080.5
985.3
1.7
(26.1)
1.3
–
962.2
At end of period - RELX PLC and RELX NV
2,123.6
(119.9)
2,003.7
2,042.7
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158
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
26 Share capital, share premium and shares held in treasury (continued)
During the year, RELX PLC repurchased 23.1m (2016: 29.2m; 2015: 25.7m) RELX PLC ordinary shares for an average price of 1,604p and
RELX NV repurchased 21.4m (2016: 26.1m; 2015: 15.8m) RELX NV ordinary shares for an average price of €17.57. The total consideration
for the repurchases was £700m (2016: £700m; 2015: £500m). These shares are held in treasury.
The Employee Benefit Trust purchases RELX PLC and RELX NV shares which, at the trustees’ discretion, can be used in respect of
the exercise of share options and to meet commitments under conditional share awards. During the year, the Employee Benefit Trust
purchased 1.2m RELX PLC shares and 1.3m RELX NV shares for a total cost of £39m (2016: £29m; 2015: £23m). At 31 December 2017,
shares held by the Employee Benefit Trust were £82m (2016: £81m) at cost.
The issue of ordinary shares in the year relates to the exercise of share options. Details of share option and conditional share schemes
are set out in note 7 on page 131.
All of the RELX PLC and RELX NV ordinary shares rank equally with respect to voting rights and rights to receive dividends, except for
shares held in treasury by the respective parent company, which do not attract voting or dividend rights. There are no restrictions on
the rights to transfer shares.
At 31 December 2017, RELX PLC shares held in treasury related to 3,493,817 (2016: 4,229,442) RELX PLC ordinary shares held by
the Employee Benefit Trust; and 60,077,786 (2016: 59,415,287) RELX PLC ordinary shares held by the parent company. At 31 December
2017, RELX PLC shares held by the Employee Benefit Trust were £39m (2016: £38m) at cost. During December 2017, 22.5m (2016: 33.7m)
RELX PLC ordinary shares held in treasury were cancelled.
At 31 December 2017, RELX NV shares held in treasury related to 3,775,905 (2016: 4,519,358) RELX NV ordinary shares held by the
Employee Benefit Trust; and 52,563,100 (2016: 53,204,378) RELX NV ordinary shares held by the parent company. At 31 December 2017,
RELX NV shares held by the Employee Benefit Trust were £43m (2016: £43m) at cost. During December 2017, 22.0m (2016: 30.0m)
RELX NV ordinary shares held in treasury were cancelled.
On 7 December 2017, RELX PLC and RELX NV announced a non-discretionary programme to repurchase further ordinary shares up
to the value of £100m. At 31 December 2017, an accrual of £100m was recognised in respect of this non-discretionary commitment.
A further 3.3m RELX PLC ordinary shares and 2.9m RELX NV ordinary shares have been repurchased in January and February 2018
under this programme.
27 Other reserves
At start of year
Profit attributable to RELX PLC and RELX NV shareholders
Dividends paid
Actuarial gains /(losses) on defined benefit pension schemes
Fair value movements on cash flow hedges
Transfer to net profit from cash flow hedge reserve
Tax recognised in other comprehensive income
Increase in share based remuneration reserve (net of tax)
Cancellation of shares
Settlement of share awards
Exchange translation differences
At end of year
Hedge
reserve
2017
£m
(133)
–
–
–
137
25
(30)
–
–
–
(2)
(3)
Other
reserves
2017
£m
(32)
1,659
(762)
233
–
–
(59)
42
(566)
(37)
12
490
Total
2017
£m
(165)
1,659
(762)
233
137
25
(89)
42
(566)
(37)
10
487
Total
2016
£m
341
1,161
(683)
(262)
(165)
46
64
44
(707)
(39)
35
(165)
Other reserves principally comprise retained earnings and the share based remuneration reserve.
28 Related party transactions
Transactions between the RELX PLC, RELX NV, RELX Group plc and subsidairies of the Group have been eliminated within the
consolidated financial statements. Transactions with joint ventures were made on normal market terms of trading and comprise sales
of goods and services of £16m (2016: £2m; 2015: nil) and the rendering and receiving of goods and services of £0.1m (2016: nil; 2015: £14.0m).
As at 31 December 2017, amounts owed by joint ventures were £2m (2016: nil; 2015: £1m) and amounts due to joint ventures were £1m
(2016: nil; 2015: £1m). See note 6 for details of the Group’s participation in defined benefit pension schemes.
Key management personnel are also related parties as defined by IAS 24 – Related Party Disclosures and comprise the Executive
and Non-Executive Directors of RELX PLC and RELX NV. Key management personnel remuneration is set out below. For reporting
purposes, salary, benefits and annual incentive payments are considered short-term employee benefits.
Financial statements and other information Notes to the consolidated financial statements
159
28 Related party transactions (continued)
KEY MANAGEMENT PERSONNEL REMUNERATION
Salaries, other short-term employee benefits and non-executive fees
Post-employment benefits
Share based remuneration*
Total
2017
£m
5
1
6
12
2016
£m
5
1
5
11
2015
£m
5
1
5
11
EXECUTIVE DIRECTORS
Total Executive Directors
Salary
£’000
1,889
1,843
1,797
Benefits
£’000
101
88
92
2017
2016
2015
Annual
incentive
£’000
1,964
1,881
1,889
Cost of share
based
remuneration*
£’000
5,549
5,409
5,181
Cost of
pension
provision*
£’000
983
1,052
966
Total
£’000
10,486
10,273
9,925
* The share based remuneration charge comprises the multi-year incentive scheme charges in accordance with IFRS 2 – Share Based
Payment. These IFRS 2 charges do not reflect the actual value received on vesting. The cost of pension provision is calculated in
accordance with the methodology set out in the UK Regulations. The amount is reduced by the Directors’ contributions and
participation fee for defined benefit schemes and reduced by the payments made to defined contribution schemes or in lieu of pension.
NON-EXECUTIVE DIRECTORS
Fees and benefits
2017
£’000
1,396
2016
£’000
1,364
2015
£’000
1,145
The remuneration of non-executive directors comprises fees for services, and benefits primarily relating to tax filing support in respect
of filings resulting from their directorships. The value of deemed benefits provided during 2017 to two former Directors’ was £2,460
(2016: nil; 2015: nil). No loans, advances or guarantees have been provided on behalf of any Director. The aggregate gains made by
Executive Directors on the exercise of options during 2017 were £2,804,358 (2016: £3,082,715; 2015: £1,474,715).
29 Exchange rates
The following exchange rates have been applied in preparing the consolidated financial statements:
Euro to sterling
US dollars to sterling
30 Subsequent events
Income statement
2017
1.14
1.29
2016
1.22
1.36
2015
1.38
1.53
Statement of
financial position
2017
1.12
1.35
2016
1.17
1.23
On 29 January 2018, RELX Group announced that it had entered into a definitive agreement to acquire 100% of the share capital of
ThreatMetrix for £580m. The acquisition is subject to customary conditions and regulatory consents and is expected to close during the
first half of 2018. This acquisition will be accounted for as a business combination in accordance with IFRS 3. The results and net assets
of ThreatMetrix will be consolidated into the RELX Group results from the point of close. The assessment of the fair values of the assets
and liabilities acquired will be completed during 2018.
31 Approval of financial statements
The consolidated financial statements were approved and authorised for issue by the Boards of Directors of RELX PLC and RELX NV
on 14 February 2018.
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160
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
32 Related undertakings
A full list of related undertakings (comprising subsidiaries, joint ventures, associates and other significant holdings) is set out below.
All are 100% owned directly or indirectly by the Group except where percentage ownership denoted in (x%).
Company Name
Australia
Adaptris Pty Ltd
Elsevier (Australia) Pty Ltd
Fair Events Pty Ltd (49%)
First 4 Farming Australia Pty Ltd
Fitness Show Pty Ltd (80%)
LexisNexis Risk Solutions Assets Australia Pty Ltd
LexisNexis Risk Solutions Australia Pty Ltd
LexisNexis Risk Solutions Unit Trust
Reed Exhibitions Australia Pty Ltd
Reed International Books Australia Pty Ltd
Reed Oz Comic-Con Pty Ltd (80%)
RELX Australia Pty Ltd
Austria
Expoxx Messebau GmbH
LexisNexis Verlag ARD ORAC GmbH & Co KG
ORAC Gesellschaft m.b.H.
Reed CEE GmbH
Reed Messe Salzburg GmbH
Reed Messe Wien GmbH
RELX Austria GmbH
System StandBau GmbH
Belgium
LexisNexis BVBA
First 4 Farming Europe NV
Brazil
Elsevier Editora Ltda
Elsevier Participacoes Ltda
Fircosoft Brazil Consultoria e Servicos de Informatica Ltda
LexisNexis Informações e Sistemas Empresariais Ltda
LexisNexis Serviços de Análise de Risco Ltda
MLex Brasil Midia Mercadologica Ltda
Reed Exhibitions Alcântara Machado Ltda
Canada
LexisNexis Canada Inc
Reed Exhibitions Inc
RELX Canada Ltd
Reg
Office
AUS1
AUS3
AUS4
AUS1
AUS6
AUS3
AUS3
AUS3
AUS2
AUS3
AUS2
AUS2
AUT1
AUT2
AUT2
AUT1
AUT3
AUT1
AUT3
AUT4
BEL1
BEL2
BRA1
BRA1
BRA2
BRA3
BRA3
BRA4
BRA3
CAN1
CAN2
CAN3
Share
Class
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary and
Redeemable
Preference
Ordinary
Units
Ordinary
Ordinary
Ordinary
Ordinary
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Ordinary
Ordinary-A,
Ordinary-B
Quotas
Quotas
Ordinary
Quotas shares
Quotas shares
Quotas
Quotas shares
Class A (non-voting),
Class B (voting)
Common
Unlimited Class A,
Unlimited Class B,
Unlimited Class C,
Unlimited Class D,
Unlimited Class E,
Unlimited Class F,
Unlimited Class G,
Unlimited Class H
Chile
Encyclopédie Médico-Chirurgicale Chile Limitada
Ordinary
CHL1
China
Beijing Bakery China Exhibitions Co., Ltd (25%)
Registered Capital
Beijing Medtime Elsevier Education Technology Co., Ltd (49%) Registered Capital
Beijing Reed Elsevier Science and Technology Co., Ltd
Registered Capital
Beijing Reed Guanghe Exhibition Co., Ltd (80%)
Registered Capital
C-One Energy Co., Ltd
Registered Capital
Genilex Information Technology Co., Ltd (40%)
Registered Capital
ICIS Consulting (Beijing) Co., Ltd
Registered Capital
KeAi Communications Co., Ltd (49%)
Registered Capital
LexisNexis Risk Solutions (Shanghai) Information
Registered Capital
Technologies Co., Ltd
MLex Consulting (Beijing) Co., Ltd
Reed Elsevier Information Technology (Beijing) Co., Ltd
Reed Exhibitions (China) Co., Ltd
Reed Exhibitions (Shanghai) Co., Ltd
Reed Hongda Exhibitions (Henan) Co., Ltd (51%)
Reed Huabai Exhibitions (Beijing) Co., Ltd (51%)
Reed Huabo Exhibitions (Shenzhen) Co., Ltd (65%)
Reed Huaqun Exhibitions Co., Ltd (52%)
Reed Kuozhan Exhibitions (Shanghai) Co., Ltd (60%)
Reed Sinopharm Exhibitions Co., Ltd (50%)
RELX (China) Investment Co., Ltd
Shanghai CBI Business Development Co., Ltd
Shanghai Datong Medical Information Technology Co., Ltd
Shanghai SinoReal Exhibitions Co., Ltd (27.5%)
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Ordinary
Registered Capital
Registered Capital
Registered Capital
CHN1
CHN2
CHN3
CHN4
CHN6
CHN7
CHN8
CHN9
CHN10
CHN11
CHN3
CHN4
CHN12
CHN13
CHN4
CHN14
CHN4
CHN12
CHN4
CHN15
CHN16
CHN17
CHN18
Company Name
Colombia
LexisNexis Risk Solutions S.A.S.
Denmark
Elsevier A/S
Reed Elsevier Denmark ApS
Dubai, UAE
Reed Exhibitions Free Zone-LLC
RELX Middle East FZ-LLC
Egypt
Elsevier Egypt LLC
France
Elsevier Holding France SAS
Elsevier Masson SAS
Evoluprint SAS
Fircosoft SAS
Gie Edi-Data
Gie Juris-Data
GIE PRK - Publicite Robert Krier
LexisNexis Business Information Solutions
LexisNexis Business Information Solutions Holding
LexisNexis International Development Services
LexisNexis SA
Reed Exhibitions ISG SARL
Reed Expositions France SAS
Reed Midem SAS
Reed Organisation SAS
RELX France S.A.
SAFI SA
Germany
Collexis GmbH
Elsevier GmbH
Elsevier Information Systems GmbH
LexisNexis GmbH
MedCongress GmbH
REC Publications GmbH
Reed Exhibitions (Germany) GmbH
Reed Exhibitions Deutschland GmbH
Reed Exhibitions Holdings GmbH
Reed Travel (Germany) GmbH
RELX Deutschland GmbH
Tschach Solutions GmbH
Hong Kong
Ascend China Holding Ltd
Reed Business Information (China) Ltd
CBI Group Co. Ltd (20%)
JC Exhibition and Promotion Ltd (65%)
JYLN Sager Ltd (40%)
MLex Asia Ltd (91%)
Reed Exhibitions Ltd
RELX (Greater China) Ltd
India
B I Churchill Living Stone Pvt Ltd
Comic Con India Private Ltd (36%)
FircoSoft India Private Ltd
Harcourt (India) Pvt Ltd
Reed Elsevier Publishing (India) Pvt Ltd
Reed Manch Exhibitions Private Ltd (70%)
Reed SI Exhibitions Private Ltd (51%)
Reed Triune Exhibitions Private Ltd (72%)
RELX India Private Ltd
Indonesia
PT Reed Panorama Exhibitions (50%)
Ireland
Armanatta Holding Ltd
Butterworth (Ireland) Ltd
Elsevier Services Ireland Ltd
I.W.P.M. (Holdings) Ltd
LexisNexis Risk Solutions (Ireland) Ltd
LexisNexis Risk Solutions (Europe) Ltd
Share
Class
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Reg
Office
COL1
DNK1
DNK1
UAE1
UAE2
Ordinary
EGY1
Registered Capital
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
Registered capital
Ordinary
Ordinary
Ordinary
Ordinary
Registered capital
Ordinary
Registered capital
Ordinary
Registered capital
Ordinary
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Ordinary
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity shares
Ordinary
Ordinary
Equity shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary, A Ordinary
Ordinary
6% Cumulative,
Deferred Ordinary,
Ordinary
Ordinary
Ordinary
FRA1
FRA1
FRA2
FRA3
FRA4
FRA4
FRA5
FRA4
FRA6
FRA4
FRA4
FRA7
FRA5
FRA7
FRA5
FRA7
FRA8
DEU3
DEU3
DEU3
DEU5
DEU1
DEU1
DEU1
DEU1
DEU1
DEU6
DEU1
DEU7
HNK1
HNK2
HNK3
HNK1
HNK5
HNK6
HNK5
HNK7
IND1
IND2
IND3
IND1
IND4
IND5
IND6
IND7
IND1
IDN1
IRE1
IRE2
IRE4
IRE2
IRE1
IRE1
Financial statements and other information Notes to the consolidated financial statements
161
32 Related undertakings (continued)
Company Name
Israel
LexisNexis Israel Ltd
Italy
Elsevier SRL
ICIS Italia SRL
Reed Exhibitions ISG Italy SRL
Reed Exhibitions Italia SRL
Japan
Ascend Japan KK
Elsevier Japan KK
LexisNexis Japan KK
Reed Exhibitions Japan KK
Reed ISG Japan KK
Share
Class
Ordinary
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Common Stock
Ordinary
Ordinary
Korea (South)
Elsevier Korea LLC
LexisNexis Legal and Professional Service Korea Ltd
Reed Exhibitions Korea Ltd
Reed Exporum Ltd (60%)
Reed K. Fairs Ltd (70%)
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Reg
Office
ISR1
ITA1
ITA2
ITA1
ITA3
JPN1
JPN2
JPN3
JPN4
JPN5
KOR1
KOR2
KOR3
KOR4
KOR3
Luxembourg
FIRCOSOFT Luxembourg Sàrl
Malaysia
LexisNexis Malaysia Sdn Bhd
Reed Exhibitions Sdn Bhd
TJ Ventures Sdn Bhd
Mexico
Masson-Doyma Mexico, S.A.
Reed Exhibitions Mexico S.A. de C.V.
Morocco
Reed Exhibitions Morocco SARL
New Zealand
LexisNexis NZ Ltd
Philippines
Reed Elsevier Shared Services (Philippines) Inc.
Poland
Elsevier sp. z.o.o.
Russia
Ecwatech Company ZAO
LexisNexis OOO
Real Estate Events Direct OOO (80%)
RELX OOO
Saudi Arabia
Reed Sunaidi Exhibitions (50%)
Singapore
Elsevier (Singapore) Pte Ltd
F4F Agriculture (Asia Pacific) Pte Ltd
ICIS Investment Singapore Pte Ltd
Lexis-Nexis Philippines Pte Ltd (75%)
Reed Business Information Pte Ltd
RE (HAPL) Pte Ltd
RELX (Singapore) Pte. Ltd
SAFI Asia Pte Ltd (50%)
South Africa
Fircosoft South Africa (Pty) Ltd
Globalrange SA (Pty) Ltd
Korbitec (Pty) Ltd (90%)
LegalPerfect Software Solutions (Pty) Ltd (90%)
LexisNexis Academic (Pty) Ltd (90%)
LexisNexis (Pty) Ltd (90%)
LexisNexis Risk Management (Pty) Ltd (90%)
Property Payment Exchange (SA) (Pty) Ltd (“Pexsa”) (90%)
RELX (Pty) Ltd
Reed Exhibitions (Pty) Ltd (90%)
Reed Management (Pty) Ltd (90%)
Reed Exhibitions (Pty) Ltd (90%)
Reed Venue Management (Pty) Ltd (90%)
Winsearch Services (Pty) Ltd (90%)
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
A-shares
A-shares
Ordinary
A-shares
Ordinary
Ordinary
LUX1
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
MYS1
MYS1
MYS1
MEX1
MEX2
Ordinary
MAR1
Ordinary
Ordinary
Ordinary
Ordinary
Registered Capital
Registered Capital
Registered Capital
NZL1
PHL1
POL1
RUS1
RUS2
RUS3
RUS2
Ordinary
SAU1
Ordinary
Ordinary
Ordinary
Preference shares
Ordinary
Ordinary
Ordinary
Ordinary
SGP1
SGP2
SGP3
SGP3
SGP4
SGP1
SGP3
SGP4
ZAF1
ZAF2
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF4
ZAF4
ZAF4
ZAF4
ZAF3
Company Name
Spain
Elsevier Espana, S.L.
Switzerland
Elsevier Finance SA
Fircosoft Schweiz GmbH
RELX Intellectual Properties SA
RELX Risks SA
RELX Swiss Holdings SA
Taiwan
Elsevier Taiwan LLC
Thailand
Reed Holding (Thailand) Co., Ltd
Reed Tradex Company Ltd (49%)
The Netherlands
AGRM Solutions C.V.
Elsevier B.V.
Elsevier Employment Services B.V.
LexisNexis Business Information Solutions B.V.
LexisNexis Univentio B.V.
Reed Business B.V.
RELX Finance B.V.
RELX Holdings B.V.
RELX Nederland B.V.
RELX Overseas B.V.
RELX US Holdings (Amsterdam) B.V.
Turkey
Elsevier STM Bilgi Hizmetleri Limited Şirketi
Reed Tüyap Fuarcilik A.Ș.(50%)
United Kingdom
Accuity Solutions Ltd
Accuity Solutions UK Ltd
Adaptris Group Ltd
Adaptris Ltd
Ascend Holdings Ltd
Ascend Worldwide Group Holdings Ltd
Ascend Worldwide Ltd
Avenue Exhibitions Ltd
Axxia Systems Ltd
Berrows Pension Trustees Ltd
Bluegrill Ltd
Bradfield Brett Holdings Ltd
Bradfield, Brett & Company Ltd
Butterworth & Co. (Overseas) Ltd
Butterworth & Co. (Publishers) Ltd
Butterworths Ltd
Cordery Compliance Ltd (72%)
Cordery Ltd (72%)
Crediva Ltd
DBT Ltd
Dew Events Ltd
Drayton Legal Recoveries Ltd
E & P Events LLP (50%)
Elsevier Ltd
Elsevier Life Sciences IP Ltd
Everyform Ltd
Fircosoft Ltd
First 4 Farming Ltd
Formpart (EPL) Ltd
Formpart (EPS) Ltd
Formpart (MDL) Ltd
Formpart (PDL) Ltd
Formpart (SFL) Ltd
Gamermania Ltd
George Philip Holdings Ltd
O
v
e
r
v
i
e
w
B
u
s
i
n
e
s
s
r
e
v
i
e
w
i
F
n
a
n
c
i
a
l
r
e
v
i
e
w
G
o
v
e
r
n
a
n
c
e
i
F
n
a
n
c
i
a
l
s
t
a
t
e
m
e
n
t
s
a
n
d
o
t
h
e
r
i
n
f
o
r
m
a
t
i
o
n
Share
Class
Reg
Office
Participations
ESP1
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
CHE1
CHE2
CHE1
CHE1
CHE1
Registered Capital
TWN1
Ordinary
Preference shares
Partnership Interest
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
E Shares / RE Shares
E Shares / RE Shares
Ordinary
THA2
THA1
NLD1
NLD1
NLD1
NLD1
NLD2
NLD1
NLD1
NLD1
NLD1
NLD1
NLD1
Ordinary
A-shares / B-shares
TUR1
TUR2
GBR2
GBR2
GBR2
GBR2
GBR2
GBR2
GBR2
GBR4
GBR1
GBR1
GBR4
GBR1
GBR1
GBR1
GBR1
GBR5
GBR5
GBR5
GBR6
GBR2
GBR4
GBR7
GBR4
GBR8
GBR8
GBR9
GBR2
GBR2
GBR1
GBR1
GBR1
GBR1
GBR1
GBR2
GBR1
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary,
Ordinary C,
Ordinary D,
Ordinary-A
Ordinary
non-voting, Ordinary
Ordinary,
Ordinary-A
Ordinary
Ordinary
7 1/2% Preferred
Income, Ordinary
Ordinary
Ordinary
4.5% Cum.
Preference,
‘A’ Ordinary,
‘B’ Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
No Shares
Ordinary
Ordinary
Ordinary A,
Ordinary B,
Ordinary C,
Ordinary D
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Cumulative
Preference,
Ordinary,
Ordinary A,
Redeemable
Cumulative
Preference
162
RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
32 Related undertakings (continued)
Company Name
United Kingdom cont.
Hallplaza Ltd
Imbibe Media Ltd
Indicium Financial Ltd
InferMed Ltd
Information Handling Ltd (85%)
Insurance Initiatives Ltd
Legend Exhibitions Ltd
LexisNexis Risk Solutions UK Ltd
Marktile Ltd
MCM Central Ltd
MCM Expo Ltd
MCM Stategy Ltd
Mendeley Ltd
MLex Ltd (91%)
Moreover Technologies Ltd
Mosby International Ltd
Neptune Collections Ltd
Newsflo Ltd
Offshore Europe (Management) Ltd
Offshore Europe Partnership (50%)
OPG 1 Ltd
Oxford Spires Management Co; Ltd (55%)
Peopletracer Ltd
Prean Holdings Ltd
RE (IDM) Ltd
RE (SEG) Ltd
RE (SEL) Ltd
RE (SOE) Ltd
RE Directors (No.1) Ltd
RE Directors (No.2) Ltd
RE Secretaries Ltd
Reed All-Energy Ltd
Reed Business Information (Holdings) Ltd
Reed Business Information Ltd
Reed Consumer Books Ltd
Reed Elsevier (UIG) Ltd
Reed Elsevier Pension Investment Management Ltd
Reed Elsevier Pension Trustee Ltd
Reed Events Ltd
Reed Exhibitions Ltd
Reed Healthcare Communications Ltd
Reed Midem Ltd
Reed Nominees Ltd
Reed Overseas Corporation Ltd
Reed Publishing Corporation Ltd
RELX (Holdings) Ltd
RELX (Investments) plc
RELX (UK) Holdings Ltd
RELX (UK) Ltd
RELX Finance Ltd
RELX Group plc
RELX Overseas Holdings Ltd
REV Venture Partners Ltd
Rowan Marketing Ltd (50%)
Scripta Technica Ltd
Sharpwise Ltd
The Lancet Ltd
The Medicine Publishing Company Ltd
The Medicine Publishing Group Ltd
The Viscom Group Ltd
Tolley Publishing Company Ltd
Tracesmart Group Ltd
Tracesmart Ltd
Wunelli Ltd
Share
Class
Reg
Office
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary-A,
Ordinary-B
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
A Ordinary Shares,
Ordinary
Ordinary
Ordinary
Deferred
Ordinary
Ordinary
Partnership Interest
Ordinary
Ordinary
Ordinary
Deferred, Ordinary
Cumulative
Redeemable
Preference,
Ordinary,
Ordinary-A
Ordinary-A,
Ordinary-B,
Preferred Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Deferred, Ordinary
Ordinary-A
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
‘E’ Ordinary,
Ordinary,
‘R’ Ordinary
Ordinary,
Preference
Ordinary
Ordinary
‘A’ Ordinary, ‘B’
Ordinary,
Cumulative
Preference
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary, A Equity
Ordinary
Ordinary
Ordinary
GBR4
GBR4
GBR10
GBR8
GBR1
GBR10
GBR4
GBR11
GBR1
GBR2
GBR2
GBR2
GBR8
GBR5
GBR1
GBR1
GBR4
GBR1
GBR4
GBR4
GBR1
GBR12
GBR6
GBR1
GBR2
GBR4
GBR4
GBR4
GBR1
GBR1
GBR1
GBR4
GBR2
GBR2
GBR1
GBR1
GBR1
GBR1
GBR4
GBR4
GBR2
GBR4
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR2
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR6
GBR6
GBR13
Company Name
United States
Accuity Asset Verification Services Inc
Accuity Europe Inc
Accuity Holdings Inc
Accuity Inc
C.L.U.E. Inc
Charles Jones LLC
De Pluimen LLC
Derman, Inc
Diio LLC
Dunlap-Hanna Publishers (50%)
Elsevier Inc
Elsevier Holdings Inc
Elsevier Medical Information LLC
Elsevier STM Inc
Enclarity, Inc
ExitCare LLC
Fire Solutions Inc
Flightstats, Inc
Gaming Business Asia LLC (50%)
Globalrange Corporation
Gold Standard, Inc
Health Market Science, Inc
IDG-RBI China Publishers LLC (50%)
Informed Decisions, LLC
Innovata, LLC
Intelligize, Inc
Internet-Journals LLC
J.Allan Sheehan Scholarship Fund Inc
Knovel Corporation
Lex Machina Inc
LexisNexis Claims Solutions Inc
LexisNexis Coplogic Solutions Inc
LexisNexis of Puerto Rico Inc
LexisNexis Risk Assets Inc
LexisNexis Risk Data Management Inc
LexisNexis Risk Holdings Inc
LexisNexis Risk Solutions Bureau LLC
LexisNexis Risk Solutions FL Inc
LexisNexis Risk Solutions Inc
LexisNexis Special Services Inc
LexisNexis VitalChek Network Inc
Managed Technology Services LLC (51%)
Matthew Bender & Company, Inc.
MLex US, Inc (91%)
MWW Clinical Sales Force, Inc. (50%)
Nexis, Inc
PoliceReports.US, LLC
Portfolio Media, Inc
Ravel Law Inc
Re (CMDGC) Inc
Reed Business Information Inc
Reed Technology and Information Services Inc.
Reed Westminster Cares Inc
RELX Capital Inc
RELX Inc
RELX US Holdings Inc
Reman, Inc
REV IV Partnership LP
Ronald G. Segel Memorial Scholarship Fund Inc.
SAFI Americas LLC (50%)
tClara LLC (51%)
The Elsevier Foundation
The Michie Company
The Reed Elsevier Ventures 2005 Partnership LP
The Reed Elsevier Ventures 2006 Partnership LP
The Reed Elsevier Ventures 2008 Partnership LP
The Reed Elsevier Ventures 2009 Partnership LP
The Reed Elsevier Ventures 2010 Partnership LP
The Reed Elsevier Ventures 2011 Partnership LP
The Reed Elsevier Ventures 2012 Partnership LP
The Reed Elsevier Ventures 2013 Partnership LP
The Remick Publishers (50%)
World Compliance, Inc
Venezuela
Share
Class
Reg
Office
Common Stock
Common Stock
Common Stock and
Preferred Stock
Common Stock
Common Stock
Membership Interest
Membership Interest
Common Stock
Membership Interest
Partnership Interest
Common Stock
Common Stock
Membership Interest
Common Stock
Common Stock
Membership Interest
Common and
Preferred Stock
Common Stock
Membership Interest
Common Stock
Ordinary shares
Common Stock
Membership Interest
Membership Interest
Membership Interest
Common Stock
Membership Interest
No Shares
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Membership Interest
Common Stock
Common Stock
Common Stock
Common Stock
Membership
Interest
Common Stock
Common Stock
Common Stock
Common Stock
Membership Interest
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
No Stock
Common Stock
Common Stock
Common Stock
Common Stock
No shares
No shares
Membership Interest
Membership Interest
No Shares
Common Stock
Partnership Interest
Partnership Interest
Partnership Interest
Partnership Interest
Partnership Interest
Partnership Interest
Partnership Interest
Partnership Interest
Partnership Interest
Common Stock
USA1
USA1
USA1
USA1
USA2
USA2
USA3
USA4
USA5
USA8
USA3
USA3
USA3
USA3
USA2
USA3
USA4
USA5
USA3
USA5
USA3
USA2
USA3
USA3
USA5
USA3
USA3
USA3
USA3
USA3
USA2
USA2
USA6
USA2
USA2
USA2
USA2
USA2
USA2
USA6
USA2
USA9
USA3
USA3
USA3
USA4
USA2
USA3
USA3
USA3
USA5
USA3
USA 4
USA4
USA3
USA3
USA3
USA4
USA3
USA3
USA4
USA3
USA4
USA4
USA4
USA4
USA4
USA4
USA4
USA4
USA4
USA8
USA4
Encyclopédie Médico-Chirurgicale Venezuela C.A.
Ordinary
VEN1
Financial statements and other information Notes to the consolidated financial statements
163
32 Related undertakings (continued)
Registered offices
Australia
AUS1: Building B, Level 2, Unit 11, 1 Maitland Place, Baulkham Hills NSW 2153,Australia
AUS2: Level 10, 10 Help Street, Chatswood NSW 2067, Australia
AUS3:
AUS4: Grant Thornton, Level 17, 393 Kent St, Sydney, NSW 2000, Australia
AUS5: KPMG, 147 Collins Street, Melbourne, Vic, 3000
AUS6: Fordham Business Advisors Pty Ltd, Rialto South Tower Level 35, 525 Collins
‘Tower 2’ Level 10, 475 Victoria Avenue, Chatswood NSW 2067
Street, Melbourne, Vic, 3000
Registered offices
Dubai, UAE
UAE1: Office No. 328, Building 02, third floor, P.O. Box 502425, Dubai, United Arab
Emirates
UAE2: Al Sufouh Complex, Floor 3, No. 304, Dubai, United Arab Emirates
Egypt
EGY1:
Land Mark Office Building, 2nd Floor, 90th Street, City Center, 5th Settlement,
New Cairo, Cairo, Egypt
Austria
AUT1: Messeplatz 1, 1020, Wien, Austria
AUT2: Marxergasse 25, 1030, Wien, Austria
AUT3: Am Messezentrum 6, 5020, Salzburg, Austria
Belgium
BEL1: Grotesteenweg-Zuid 39, 9052 Gent, Belgium
BEL2: Leernseteenweg 128 Box E, 9800 Deinze, Belgium
67 rue de la Loi, 1040 Etterbeek, Belgium
BEL3:
65, rue Camille Desmoulins, 92130, Issy les Moulineaux, France
France
FRA1:
FRA2: Parc Euronord – 10, rue du Parc – 31150 Bruguieres
FRA3: 247 rue de Bercy 75012 Paris
FRA4: 141 rue de Javel, 75015 Paris
FRA5: 52 Quai de Dion Bouton 92800 Puteaux
FRA6:
FRA7: 27 quai Alphonse Le Gallo, 92100, Boulogne-Billancourt, France
FRA8: 6-8 Rue Chaptal, 75009 Paris
Immeuble « Technopolis », 350 rue Georges Besse –Nîmes (30000)
Brazil
BRA1: Rua Sete de Setembro, nº 111, salas 601,1501/1502, 1601/1602, 1701/1702 e 802 – 8º
Andar, Centro, cidade do Rio de Janeiro, estado do Rio de Janeiro, CEP 20.050-006
BRA2: São Paulo, State of São Paulo, at Rua Bela Cintra, nº 1.200, 8th floor, CEP 01415-002
BRA3: Rua Bela Cintra no. 1200, 10th floor, Sâo Paulo, 01415-001, Brazil
BRA4: Avenida paulista, 2300-Piso Pilotis room 28, Sao Paulo, Sao Paulo 01310-300
Canada
CAN1: 123 Commerce Valley Drive East, Suite 700, Markham, Ontario, L3T 7W8, Canada
CAN2: 905 King Street West, 4TH Floor, Toronto, Ontario, Canada M6K 3G9
CAN3: 555 RIichmond Street West, Toronto, Ontario, Canada, M5V 3B1
Chile
CHL1: Serrano 172, Santiago, Chile
China
CHN1: Zhongkun Building, Room 612, Gaoliangqiaoxie Street, No. 59, Haidan District,
Beijing, 100044, China
Germany
DEU1: Völklinger Strasse 4, 40219, Düsseldorf, Germany
DEU3: Theodor-Heuss-Allee 108, D-60488, Frankfurt am Main, Hesse, Germany
DEU4: Hackerbrücke 6, 80335, Munich, Germany
DEU5: Heerdter Sandberg 30, 40549, Düsseldorf, Germany
DEU6: Schwannstr. 6, 40476 Düsseldorf
DEU7: Steinhäuserstrasse 9, 76135, Karlsruhe, Germany
Hong Kong
HNK1: 20/F Alexandra House, 18 Chater Road, Central, Hong Kong
HNK2: Level 28, Building 8, 3 Pacific Place, 1 Queens Road East, HONG KONG, Hong Kong
HNK3: Unit 204 2/F, Malaysia Bldg., 50 Gloucester Rd, Wanchai, Hong Kong
HNK4: Level 54 Hopewell Center, 183 Queens Road East (Tricor Office), Hong Kong
HNK5: Flat 2, 19/F Henan Building 90-92, Jaffe Road Wanchai, Hong Kong, Hong Kong
HNK6: 703 Silvercord, Tower 2, 30 Canton Road, Tsimshatsui, Kowloon, Hong Kong
HNK7: 3901, 39th Floor Hopewell Center, 183 Queens Road East, Wanchai, Hong Kong,
Hong Kong
CHN2: West Building of Administration Building, Xueyuan Road No. 38 Peking University
Health Science Center, Haidan District, Beijing, 100191, China
CHN3: Oriental Plaza, No. 1 East Chang An Ave, Tower W1, 7th Floor, Unit 1-7, Dong Cheng
India
IND1:
District, Beijing, 100738, China
CHN4: Ping An International Finance Center, Room 1504, 15th Floor, Tower A-101, 3-24
floor, Xinyuan South Road, Chaoyang District, Beijing, 100027, China
CHN5: 4/F Block C, No 999 Jingzhong Road, Changning District, Shanghai, China
CHN6: 9/F, No 3 Zhongshan Er Road, Guangzhou, China
CHN7: Unit 2480, Building 2, No. 7, Chuangxin Road, Science Park of Changping District,
Beijing, China
CHN8: Room 12B, 7th Floor, Oriental Plaza, 1 East Chang An Avenue, Beijing, China
CHN9: 16 Donghuangchenggen North Street, Beijing, 100717, China
CHN10: Room 5106, Raffle City, 268 Middle Xizang Road, Huangpu District, Shanghai,
200001, China
CHN11: Room A 100 of Room 0307, Floor 3, Building 3, 7 Middle Dongsanhuan road,
Chaoyang District, Beijing
CHN12: Intercontinental Center, 42F, 100 Yutong Road, Zhabei District, Shanghai, 200070,
China
CHN13: World Expo Mansion, 14F, No. 04-05, No. 8 Business Out Ring Road, Zhengzou New
District, Zhengzou, 450000, China
CHN14: Shenzhen International Chamber of Commerce Tower, Room 1801-1802, 1805,
Fuhua 3rd Road, Futian District, Shenzhen, 518048, China
CHN15: Room 319, 238 Jiangchangsan Road, Jing’an District, Shanghai, China
CHN16: Room 702-2, 200 Huiyuan Road, Jiading Industrial Area, Shanghai
CHN17: No 498, GouShouJing Road, Building 6 Unit 12502-505, Shanghai, Pudong New
District, 201203, China
CHN18: Building 2, Room No. 3895, Changjiang Avenue, No. 161, Changliang Farm,
Chongming County, Shanghai Municipality
Colombia
COL1: Philippe Prietocarrizosa & Uria Abogados, Carrera 9 No. 74-08 Oficina 105,
Bogotá, d.c., 76600, Colombia
Denmark
DNK1: Niels Jernes Vej 10, 9220, Aalborg Øst, Denmark
818, 8th Floor, Indraprakash Builing, 21 Barakhamba Road, New Delhi, 110001,
India
IND2: B9/5 Vasant Vihar, New Delhi, 110057, India
IND3:
n°664 Level 6 – Chennai Regus – Citi Centre – 10/11 Dr Radhakrishnan Salai,
Mylapore – Chennai 600004
18, Kotla Lane, Rouse Avenue, New Delhi, 110002, India
IND4:
IND5: B-15/192, Pharma Apartments, Patparganj, I.P. Extension, New Delhi, 110092,
India
IND6: B-9, "A" Block, LSC, Naraina Vihar, Ring Road, New Delhi, 110028, India
IND7: #25, 3rd floor, 8th Main Road, Vasanthnager, Bangalore, 560052, India
Indonesia
IDN1:
Panorama Building, 5th Floor, Jalan Tomang Raya No. 63, Jakarta, 11440,
Indonesia
Ireland
IRL1:
IRL2:
IRL3:
IRL4:
80 Harcourt Street, Dublin 2, Ireland
Arthur Cox Building, Earlsfort Terrace, Dublin 2, Ireland
(A&L Goodbody Secretarial Services), 25/28 North Wall Quay, Dublin 1, D01 H104,
Ireland
Suite 4320, Atlantic Avenue, Westpark Business Campus, Shannon, Clare, Ireland
Israel
ISR1: Meitar, attorneys at Law, 16 Abba Hillel Road, Ramat Gan, 5250608, Israel
Italy
ITA1:
ITA2:
ITA3: Milano (MI) Via Marostica 1 cap 20146
Via Marostica 1, 20146, Milan, Italy
Studio Colombo e Associati, Via Cino del Duca 5, 20122, Milano, Italy
Japan
JPN1: Kyodo Tsushin Kaikam 2F, 2-2-5 Toronomon, Minato-ku, Tokyo, 105-0001
JPN2: Ark Mori Building, 1-12-32 Akasaka, Minato-ku, Tokyo, 107-6029, Japan
JPN3:
JPN4: Shinjuku-Nomura Bldg., 1-26-2 Nishi-shinjuku, Shinjuku-ku, Tokyo, Japan
JPN5:
1-9-15, Higashi Azabu, Minato-ku Tokyo Japan
13-12 Rokubancho, Chiyoda-ku, Tokyo, Japan
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RELX Group Annual reports and financial statements 2017
Notes to the consolidated financial statements
for the year ended 31 December 2017
32 Related undertakings (continued)
Registered offices
Korea (South)
KOR1: Chunwoo Building, 4th floor, 534 Itaewon-dong, Yongsan-gu, Seoel, 140-861,
Registered offices
Thailand
THA1: Sathorn Nakorn Building, Floor 32, No. 100/68-69 North Sathon Road, Silom,
Bangrak, Bangkok, 10500, Thailand
THA2: 540 Mercury Tower, 22nd Floor, Ploenchit Road, Lumpini, Pathumwan, Bangkok
10330
The Netherlands
NLD1: Radarweg 29, 1043 NX Amsterdam, Netherlands
NLD2: Galileiweg 8, 2333 BD Leiden, Netherlands
Turkey
TUR1: Maslak Mah. Bilim Sokak Sun Plaza Kat:13 Şişli-Maslak, Istanbul, Turkey
TUR2: Tüyap Fuar ve Kongre Merkezi, E – 5 Karayolu Üzeri, Gürpınar Kavşağı 34500,
Büyükçekmece, Istanbul, 34500, Turkey
United Kingdom
GBR1: 1-3 Strand, London, WC2N 5JR, United Kingdom
GBR2: Quadrant House, The Quadrant, Sutton, Surrey, SM2 5AS, United Kingdom
GBR3: AG Gateway Global Network, 85 Great Portland Street, First Floor, London,
W1W 7LT, United Kingdom
GBR4: Gateway House 28 The Quadrant, Richmond, Surrey, TW9 1DN, United Kingdom
GBR5: Lexis House, 30 Farringdon Street, London, EC4A 4HH, United Kingdom
GBR6: Global Reach, Dunleavy Drive, Cardiff, CF11 0SN, United Kingdom
GBR7: The Eye, 1 Procter Street, London, WC1V 6EU, United Kingdom
GBR8: The Boulevard, Langford Lane, Kidlington, Oxford, OX5 1GB, United Kingdom
GBR9: c/o RELX (UK) Limited, Butterworths Limited, 4 Hill Street, Edinburgh,
EH2 3JZ, Scotland
GBR10: 35 – 37 St. Marys Gate, Nottingham, United Kingdom, NG1 1PU
GBR11: 1st Floor 80 Moorbridge Road, Maidenhead, Berkshire, London, SL8 8BW,
United Kingdom
GBR12: 40 Kimbolton Road, Bedford, England, MK40 2NR
GBR13: 1000 Lakeside, Western Road, Portsmouth, PO6 3EN, United Kingdom
1007 Church Street, Evanston IL 60201
US
USA1:
USA2: 1000 Alderman Dr., Alpharetta, GA 30005
USA3: 230 Park Ave, New York, NY 10169
USA4: 1105 North Market St, Wilmington, DE 19801
USA5: 3355 West Alabama Street, Houston, TX 77098
USA6: Puerta Del Condado #1095, Wilson Ave, Local #3, San Juan, PR 00907
USA7:
USA8:
USA9: 1209 Orange Street, Wilmington, DE 19801
N909 N. Sepulveda Blvd., 11th Floor, El Segundo, CA 90245
313 Washington Street, Suite 400, Newton, MA 02458
Venezuela
VEN1: Avenida Banca, Torre BOD, Piso 21, La Castellana, Estado Miranda, Caracas,
Venezuela
Korea, Republic of
KOR2: 206 Noksapyeong-daero, Yongsan-gu, Seoel, Korea, Republic of
KOR3:
"Room 4401, Trade Tower, 159-1, Samseong-dong, Gangnam-gu Seoul, 135-729,
Republic of Korea”
KOR4: 1324 Block A Tera Tower II, 201, Songpa-daero, Songpa-gu, Seoul, 05854
Luxembourg
LUX1: Bloc B 19-21, Route d’Arlon, L-8009 Strassen, Luxembourg
Malaysia
MYS1: 6th Floor, Akademi Etiqa, No. 23 Jalan Melaka, 50100 Kuala Lumpur, Malaysia
Mexico
MEX1:
Insurgentes Sur # 1388 Piso 8, Col. Actipan, Deleg. Benito Juarez, C.P. 03230
Ciudad de México, México
MEX2: Av. Insurgentes No. 1388, Piso 8, Col. Actipan, 03230 Mexico, Mexico
Morocco
MAR1: Forum Bab Abdelaziz au 62, Angle Blvd. d’Anfa, 6ème étage, Apt 61, Casablanca,
Morocco
New Zealand
NZL1:
Level 1, 138 The Terrace, P.O. Box 472, Wellington 6011, New Zealand
Philippines
PHL1: Building H, 2nd Floor, U.P. Ayalaland TechnoHub, Commonwealth Avenue, Quezon
City, Metro Manila, 1101, Philippines
Poland
POL1: Natpoll Building, ul. Migdalowa 4/59, 02-796, Warsaw, Poland
Russia
RUS1: Pokrovka Street 27, Building 1, Moscow, Russian Federation
RUS2: 24 Bolshaya Nikitskaya Str., bldg. 5, Moscow 125009, Russian Federation
RUS3: Petrozavodskaya street 28/4, Building VI, room 2, 125475, Moscow, Russian
Federation
Saudi Arabia
SAU1: Al Fadl Commercial Center, Jeddah, 21411, Saudi Arabia
3 Killiney Road, #08-01 Winsland House 1, Singapore, 239119, Singapore
Singapore
SGP1:
SGP2: 16 Raffles Quay, #33-03 Hong Leong Building, Singapore, 048581, Singapore
SGP3: 80 Robinson Road, #02-00, Singapore, 068898, Singapore
SGP4:
1 Changi Business Park Crescent, #06-01 Plaza 8 & CBP, Singapore, 48602551,
Singapore
South Africa
ZAF1: Regus Brooklyn Bridge, 3rd Floor Steven House, Brooklyn Bridge Office Park,
Fehrsen Street, Brooklyn, Pretoria
ZAF2: Fourways Gold Park, 1st Floor – Wentworth Building, 32 Roos Street, Fourways,
ZAF3:
2191, South Africa
215 Peter Mokaba Road (North Ridge Road), Morningside, Durban, Kwa-Zulu
Natal, 4001, South Africa
ZAF4: Thebe House, 2nd Floor, 166 Jan Smuts Avenue, Rosebank, Johannesburg, 2196,
South Africa
Spain
ESP1: C/ Josep Tarradellas 20-30, 1º / 20029, Barcelona, Spain
ESP2: Calle Zancoeta 0009, 48013, Bilbao, Viscaya, Spain
Switzerland
CHE1: Espace de L’Europe 3, 2002 Neuchatel, Switzerland
CHE2: Bahnhofstrasse 100 – 8001 Zurich
Taiwan
TWN1: Suite N-818, 8/F, Chia Hsin Cement Building, 96 Zhong Shan North Road, Section 2,
Taipei, 10449, Taiwan
Financial statements and other information Notes to the consolidated financial statements
165
5 year summary
RELX Group consolidated financial information
Revenue
Reported operating profit
Adjusted operating profit
Reported net profit attributable to shareholders
Adjusted net profit attributable to shareholders
RELX PLC financial information
Reported earnings per ordinary share (pence)
Adjusted earnings per ordinary share (pence)
Dividend per ordinary share (pence)
RELX NV financial information(3)
Reported earnings per ordinary share (pence)
Reported earnings per ordinary share (euro)
Adjusted earnings per ordinary share (euro)
Dividend per ordinary share (euro)
Note
2017
£m
2016
£m
2015
£m
2014
£m
Restated(3)
7,355
1,905
2,284
1,659
1,635
82.2p
81.0p
39.4p
82.2p
€0.936
€0.923
€0.448
1
1
2
2
6,895
1,708
2,114
1,161
1,488
56.3p
72.2p
35.95p
56.3p
€0.687
€0.880
€0.423
2013
£m
6,035
1,376
1,749
1,110
1,197
49.0p
54.1p
24.6p
5,971
1,497
1,822
1,008
1,275
46.4p
60.5p
29.7p
5,773
1,402
1,739
955
1,213
43.0p
56.3p
26.0p
49.4p
€0.682
€0.835
€0.403
45.8p
€0.568
€0.698
€0.383
51.6p
€0.609
€0.638
€0.329
(1) Adjusted figures are presented as additional performance measures used by management. A reconciliation of the adjusted
measures to the comparable GAAP measures can be found on page 186. Adjusted measures are stated before amortisation and
impairment of acquired intangible assets and goodwill, the net financing cost on defined benefit pension schemes and acquisition-
related costs, exceptional tax credits (in 2017, resulting from the US Tax Cuts and Jobs Act), and in respect of attributable net profit,
reflect a tax rate that excludes the effect of movements in deferred taxation assets and liabilities that are not expected to crystallise
in the near term and includes the benefit of tax amortisation where available on acquired goodwill and intangible assets.
Acquisition-related financing costs and profit and loss from disposal gains and losses and other non-operating items are also
excluded from the adjusted figures.
(2) Dividend per ordinary share is based on the interim dividend and proposed final dividend for the relevant year.
(3) RELX NV amounts and dividend per share reflect the bonus share issue declared on 30 June 2015.
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166
RELX Group Annual reports and financial statements 2017
Financial statements and other financial information
167
RELX PLC
Annual Report and
Financial Statements
In this section
168 Directors’ Report
172 RELX PLC statement of financial position
173 RELX PLC statement of changes in equity
173 RELX PLC accounting policies
174 Notes to the RELX PLC financial statements
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168
RELX Group Annual reports and financial statements 2017
Directors’ Report
The Directors present their report, together with the financial
statements of the Group and RELX PLC (the Company), for the year
ended 31 December 2017.
RELX PLC is incorporated as a public limited company and is
registered in England and Wales with registered number 77536.
RELX PLC’s registered office is 1-3 Strand, London, WC2N 5JR.
Corporate structure
RELX PLC and RELX NV are separate, publicly-listed holding
companies. RELX PLC’s ordinary shares are traded on the
London and New York stock exchanges, and RELX NV’s ordinary
shares are traded on the Amsterdam and New York stock
exchanges. RELX PLC and RELX NV have equal voting rights in
RELX Group plc, which holds all of RELX Group’s operating
businesses, subsidiaries and financing activities. RELX PLC,
RELX NV, RELX Group plc and its subsidiaries, joint ventures and
associates are together known as ‘RELX Group’ or ‘the Group’.
Financial statement presentation
Under the Governing Agreement between RELX PLC and RELX NV,
one RELX PLC ordinary share confers an equivalent economic
interest to one RELX NV ordinary share. Therefore, all shareholders
can be regarded as having interests in a single economic entity.
Accordingly, the Group forms a single reporting entity for the
presentation of consolidated financial statements. The Group
consolidated financial statements represent the interests of both
sets of shareholders and are presented by both RELX PLC and
RELX NV as their respective consolidated financial statements.
This Directors’ Report and the financial statements of the Group
and Company should be read in conjunction with the other reports
set out on pages 2 to 104. A review of the Group’s performance
during the year is set out on pages 8 to 52, the principal risks facing
the Group are set out on pages 60 to 63, and the Group statement
on corporate responsibility is set out on pages 42 to 52.
The shares of RELX PLC and RELX NV are regarded as two
separate classes of share which together form the consolidated
issued share capital of the Group. In calculating the earnings per
share of the Group, the earnings for each company are calculated
on a fully distributed basis. The Group’s usual practice is for only a
portion of earnings to be distributed by way of dividends. Dividends
paid to RELX PLC and RELX NV shareholders are, other than in
special circumstances, equalised at a gross level and reported
earnings per share have the same value for each RELX PLC and
RELX NV share.
In addition to the reported figures, adjusted figures are presented
as additional performance measures used by management to
assess the performance of the business. These exclude the Group’s
share of amortisation of acquired intangible assets, acquisition-
related costs, tax in joint ventures, disposal gains and losses and
other non-operating items, related tax effects, and movements
in deferred taxation assets and liabilities related to acquired
intangible assets, and include the benefit of tax amortisation
where available on acquired goodwill and intangible assets.
In 2017, the exceptional tax credit arising as a result of the
US Tax Cuts and Jobs Act has been excluded from our adjusted
measures.
Company financial statements
The individual company financial statements of the Company
are presented on page 172, and were prepared under Financial
Reporting Standard 101 (FRS 101).
Distributable reserves as at 31 December 2017 were £1,518m
(2016: £1,472m), comprising reserves less shares held in treasury.
Parent company shareholders’ funds as at 31 December 2017
were £3,174m (2016: £3,112m).
Strategic Report
The Companies Act 2006 requires the Company to present a fair
review of the Group during the financial year. The Strategic Report,
which includes a review of the Group’s business areas, a financial
review, the principal risks facing the Group, any important events
affecting the Group since 31 December 2017, and the likely future
developments in the Group’s business, is set out on pages 2 to 63
which are incorporated into this Directors’ Report by reference.
The Directors’ Report, inclusive of the Strategic Report
incorporated therein, forms the management report for the
purposes of the Financial Conduct Authority’s Disclosure and
Transparency Rule 4.1.8R.
Dividends
The Board is recommending a final dividend of 27.7p (2016: 25.7p)
per ordinary share to be paid on 22 May 2018 to shareholders
appearing on the Register at the close of business on 27 April 2018.
Payment of this final dividend remains subject to the approval of the
Company’s shareholders at its 2018 Annual General Meeting (AGM).
Together with the interim dividend of 11.7p (2016: 10.25p) per
ordinary share, paid in August 2017, the total ordinary dividends
for the year will be 39.4p (2016: 35.95p).
Details of dividend cover and dividend policy are set out on page 58.
Corporate Governance
The Company has complied throughout the year with the provisions
of the UK Corporate Governance Code 2016 (the UK Code), which
is publicly available on the Financial Reporting Council website
(www.frc.org.uk). Details of how the main principles of the UK Code
have been applied and the Directors’ statement on internal control
are set out in the Corporate Governance report on pages 72 to 80,
which are incorporated into this Directors’ Report by reference.
Greenhouse gas emissions
The Company is required to state the annual quantity of emissions
in tonnes of carbon dioxide equivalent from Group operational
activities. Details of our emissions during the year ended
31 December 2017 and the actions being taken to reduce them
are set out in the Corporate Responsibility section of the Strategic
Report on pages 51 and 52, which are incorporated into the Directors’
Report by reference. Further details can be found in our online
Corporate Responsibility Report at www.relx.com/go/CRReport.
Directors
The names of the Directors who served on the Board during the
year, and changes to the Board, are set out on pages 66, 67, 76 and
77, which are incorporated into this Directors’ Report by reference.
Financial statements and other information Directors' Report
169
Share capital
The Company’s issued share capital comprises a single class of
ordinary shares, all of which are listed on the London and New York
stock exchanges. All issued shares are fully paid up and carry no
additional obligations or special rights. Each share carries the right
to one vote at general meetings of the Company.
In a general meeting, subject to any rights and restrictions attached
to any shares, on a show of hands every member who is present in
person shall have one vote and every proxy present who has been
duly appointed by one or more members entitled to vote on the
resolution has one vote (although a proxy has one vote for and one
vote against the resolution if: (i) the proxy has been duly appointed by
more than one member entitled to vote on the resolution; and (ii) the
proxy has been instructed by one or more of those members to vote
for the resolution and by one or more other of those members to
vote against it). Subject to any rights or restrictions attached to any
shares, on a vote on a resolution on a poll every member present in
person or by proxy shall have one vote for every share of which he/
she is the holder.
Authority to purchase shares
At the 2017 AGM, shareholders passed a resolution authorising
the purchase of up to 114.4m ordinary shares in the Company
(representing less than 10% of the issued ordinary shares) by
market purchase. During the year, 23,122,499 ordinary shares
with a nominal value of 1451/116p (representing 2.0% of the ordinary
shares in issue on 31 December 2017) were purchased under this
and the previous authority, for a total consideration of £371m,
including expenses, and subsequently transferred to be held in
treasury. The purpose of the share buyback is to reduce the capital
of the Company.
On 27 December 2017, the Company cancelled 22.46m ordinary
shares held in treasury. Therefore, as at 31 December 2017 there
were 60,077,786 ordinary shares held in treasury, representing
5.3% of the issued ordinary shares. A further 3,304,631 ordinary
shares were purchased between 2 January 2018 and the date of
this report. The authority to make market purchases will expire at
the 2018 AGM, at which a resolution to further extend the authority
will be submitted to shareholders.
Proxy appointments and voting instructions must be received by
the registrars not less than 48 hours before a general meeting.
There are no specific restrictions on the size of a holding nor on
the transfer of shares, which are both governed by the general
provisions of the Articles and prevailing legislation. The Company
is not aware of any agreements between shareholders that may
result in restrictions on the transfer of shares or on voting rights
attached to the shares.
At the 2017 AGM, shareholders passed a resolution authorising
the Directors to issue shares for cash on a non-pre-emptive basis
up to a nominal value of £8.2m, representing less than 5% of the
Company’s issued share capital, and authorising the Directors
to issue up to an additional 5% of the issued share capital for cash
on a non-pre-emptive basis in connection with an acquisition or
specified investment. Since the 2017 AGM, no shares have been
issued under this authority. The shareholder authority also
permitted the Directors to issue shares in order to satisfy
entitlements under employee share plans, and details of such
allotments are noted below. The authorities to issue shares will
expire at the 2018 AGM. Two separate resolutions to extend the
authorities will be proposed at the 2018 AGM: (i) to authorise the
Directors to issue shares for cash on a non-pre-emptive basis up
to 5% of the issued share capital and to satisfy entitlements under
employee share plans; and (ii) to authorise the Directors to issue
up to 5% of the issued share capital for cash on a non-pre-emptive
basis in connection with an acquisition or specified investment
subject to certain conditions in accordance with the Pre-Emption
Group’s Statement of Principles.
During the year, 2,019,483 ordinary shares in the Company were
issued in order to satisfy entitlements under employee share
plans as follows: 717,932 under a UK Sharesave option scheme
at prices between 410.80p and 1251.20p per share; and 1,301,551
under executive share option schemes at prices between 466.50p
and 1494.50p per share.
The issued share capital as at 31 December 2017 is shown in note 26
to the consolidated financial statements.
Substantial share interests
As at 31 December 2017, the Company had been notified by the
following shareholders that they held an interest of 3% or more
in voting rights of its issued share capital pursuant to Rule 5 of
the Disclosure and Transparency Rules (DTR):
Notifications received as at 31 December 2017
% of voting rights
§ BlackRock Inc
§ Invesco Limited
§ Legal & General Group plc
9.62%
5.03%
3.40%
The percentage interests stated above are as disclosed at the date
on which the interests were notified to the Company.
Between 31 December 2017 and 14 February 2018, the Company
did not receive any notifications under DTR 5.
Employee Benefit Trust
The trustee of the Employee Benefit Trust held an interest in
3,493,817 ordinary shares in the Company (representing 0.3% of the
issued ordinary shares) as at 31 December 2017. The trustee may
vote or abstain from voting any shares it holds in any way it sees fit.
Significant agreements – change of control
The Governing Agreement between RELX PLC and RELX NV states
that, upon a change of control of RELX PLC (for these purposes, the
acquisition by a third party of 50% or more of the issued share
capital having voting rights), should there not be a comparable offer
from the offeror for RELX NV, RELX NV may serve notice upon the
Company varying certain provisions of the Governing Agreement,
including the governance and the standstill provisions.
There are a number of borrowing agreements including credit
facilities that, in the event of a change of control of both the Company
and RELX NV and, in some cases, a consequential credit rating
downgrade to sub-investment grade may, at the option of the
lenders, require repayment and/or cancellation as appropriate.
Articles
The Company’s Articles of Association, which were not amended
during the year, may only be amended by a special resolution of
shareholders passed at a general meeting of the Company.
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170
RELX Group Annual reports and financial statements 2017
Appointment and replacement of Directors
The appointment, re-appointment and replacement of Directors
is governed by the Company’s Articles, the Governing Agreement
between RELX PLC and RELX NV, the Companies Act 2006 and
related legislation. RELX PLC shareholders maintain their right
to appoint and re-appoint Directors by way of an ordinary
resolution in accordance with the Articles. However, no individual
may be appointed to the Board unless recommended by the joint
Nominations Committee of RELX PLC and RELX NV. Subject to this
restriction, the Directors may appoint additional or replacement
Directors, who may only serve until the following AGM of the
Company, at which time they must retire and, if appropriate, seek
election by the Company’s shareholders. A Director may be
removed from office by the Company as provided for by applicable
law, in certain circumstances set out in the Company’s Articles,
and at a general meeting of the Company by the passing of an
ordinary resolution.
The Articles provide for a Board of Directors consisting of not
fewer than two, but not more than 20 Directors, who manage the
business and affairs of the Company.
Powers of Directors
Subject to the provisions of the Companies Act 2006, the Company’s
Articles and any directions given by special resolutions, the
business of the Company shall be managed by the Board which
may exercise all the powers of the Company.
Directors’ indemnity
In accordance with its Articles, the Company has granted Directors
an indemnity, to the extent permitted by law, in respect of liabilities
incurred as a result of their office. This indemnity was in place for
Directors that served at any time during the 2017 financial year,
and also for each serving Director as at the date of approval of this
report. The Company also purchased and maintained throughout
the year Directors’ and Officers’ liability insurance in respect of
itself and its Directors.
Related party transactions
Internal controls are in place to ensure that any related party
transactions involving Directors or their connected persons are
carried out on an arm’s-length basis and are properly recorded
and disclosed where appropriate.
Conflicts of interest
Under the Companies Act 2006, the Directors have a duty to
avoid situations in which they have, or could have, a direct or
indirect interest that conflicts with the interests of the Company.
The Board has established formal procedures for identifying,
assessing and reviewing any situations where a Director has
an interest that conflicts, or may possibly conflict, with the
interests of the Company.
The Nominations Committee considers any such conflict or
potential conflict and makes a recommendation to the Board
on whether to authorise it, as permitted under the Company’s
Articles. In reaching its decision, the Board is required to act
in a way it considers would be most likely to promote the success
of the Company and may impose limits or conditions when
giving its authorisation, if it thinks this is appropriate. Actual
or potential conflicts of interest are reviewed annually by the
Nominations Committee.
Financial Instruments
The Group’s financial risk management objectives and policies,
including hedging activities and exposure to risks, are described in
note 19 to the consolidated financial statements on pages 147 to 152.
Political donations
The Group does not make donations to European Union (EU) political
organisations or incur EU political expenditure. In the US, Group
companies donated £62,791 (2016: £74,264) to political
organisations. In line with US law, these donations were not made at
federal level, but only to candidates and political parties at the state
and local levels.
Employee relations
The Group is committed to employee involvement and participation.
Where appropriate, major announcements are communicated to
employees through internal briefings. Information on performance,
development, organisational changes and other matters of interest
is communicated through briefings and electronic bulletins.
The Company is an equal opportunity employer and does not
discriminate on the grounds of race, gender or other characteristics
in its recruitment or employment policies. The Group seeks
opinions from employees through a triennial survey. The last
employee survey was carried out in 2015. Certain employees
throughout the Group are eligible to participate in the Group’s
share incentive plans.
Disabled persons
RELX Group has a positive approach to diversity and inclusion.
Details of the Group’s Diversity and Inclusion Statement are set out
on page 46, which is incorporated into this Directors’ Report by
reference. The Group is committed to the full and fair treatment
of people with disabilities in relation to job applications, training,
promotion and career development. Where existing employees
become disabled, our policy is to provide continuing employment,
support and training wherever practicable.
Disclosures required under UK Listing Rule 9.8.4
The information required by Listing Rule 9.8.4 is set out on the
pages below:
Information required
(1)
Interest capitalised by the Group
(2) Publication of unaudited financial information
(4) Long-term incentive schemes
(5)
Waiver of emoluments by a director
(6) Waiver of future emoluments by a director
(7) Non pro-rata allotments for cash (issuer)
Page
n/a
n/a
n/a
n/a
n/a
n/a
(8) Non pro-rata allotments for cash (major subsidiaries) n/a
(9) Parent participation in a placing by a listed subsidiary n/a
(10) Contracts of significance
(11) Provision of services by a controlling shareholder
(12) Shareholder waiver of dividends
(13) Shareholder waiver of future dividends
(14) Agreements with controlling shareholders
n/a
n/a
141
141
n/a
Financial statements and other information Directors' Report
171
Financial statements and accounting records
The Directors are responsible for preparing the Directors’ Report
and the financial statements in accordance with applicable law
and regulations.
§ the Directors’ Report includes a fair review of the development
and performance of the business and the position of the Group,
together with a description of the principal risks and
uncertainties that it faces.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the consolidated financial statements
in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU and Article 4 of the IAS Regulation.
The Directors have elected to prepare the individual company
financial statements in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework. Under company
law the Directors must not approve the accounts unless they are
satisfied that they give a true and fair view of the state of affairs of
the Company and of the profit or loss of the Company for that period.
In preparing the individual company financial statements, the
Directors are required to: select suitable accounting policies and
then apply them consistently; make judgements and accounting
estimates that are reasonable and prudent; state whether Financial
Reporting Standard 101 Reduced Disclosure Framework has been
followed, subject to any material departures being disclosed and
explained in the financial statements; and prepare the financial
statements on a going concern basis unless it is inappropriate to
presume that the Company will continue in business.
In preparing the Group financial statements, IAS1 requires that
Directors: properly select and apply accounting policies; present
information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable
information; provide additional disclosures when compliance with
the specific requirements of IFRS are insufficient to enable users
to understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial
performance; and make an assessment of the company’s ability
to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure
that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Directors’ responsibility statement
Each of the Directors, whose names and roles can be found on
pages 66 to 67, confirms that, to the best of their knowledge:
§ the consolidated financial statements, prepared in accordance
with International Financial Reporting Standards as issued by
the International Accounting Standards Board and as adopted
by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group;
§ the individual company financial statements, prepared in
accordance with Financial Reporting Standard 101 ‘Reduced
Disclosure Framework’ (FRS 101), give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company; and
Having taken into account all the matters considered by the Board
and brought to the attention of the Board during the year, the
Directors are satisfied that the Annual Report and Accounts, taken
as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s
position and performance, business model and strategy.
Neither the Company nor the Directors accept any liability to any
person in relation to the Annual Report except to the extent that
such liability could arise under English law. Accordingly, any
liability to a person who has demonstrated reliance on any untrue
or misleading statement or omission shall be determined in
accordance with Section 90A of the Financial Services and
Markets Act 2000.
Disclosure of information to auditors
In accordance with Section 418 of the Companies Act 2006, each
Director in office at the date the Directors’ Report is approved,
confirms that:
§ so far as the Director is aware, there is no relevant audit
information of which the Company’s auditors are unaware; and
§ he/she has taken all the steps that he/she ought to have taken
as a Director to make himself/herself aware of any relevant
audit information and to establish that the Company’s auditors
are aware of that information.
Going concern
The Directors’ statement regarding the appropriateness of adopting
the going concern basis of accounting is set out on page 79, which
is incorporated into this Directors’ Report by reference.
Long-term viability statement
The Directors’ statement regarding the long-term viability of the
Group is set out on page 80, which is incorporated into this Directors’
Report by reference.
Auditors
Resolutions for the re-appointment of Ernst & Young LLP as
auditors of the Company and to authorise the Audit Committee,
on behalf of the Board, to determine their remuneration will be
submitted to shareholders at the 2018 AGM.
By order of the Board
Henry Udow
Company Secretary
14 February 2018
Registered Office
1-3 Strand
London
WC2N 5JR
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172
RELX Group Annual reports and financial statements 2017
RELX PLC statement of financial position
AS AT 31 DECEMBER
Non-current assets
Investments in subsidiary undertakings
Investments in joint ventures
Current assets
Receivables: amounts due from joint ventures
Total assets
Current liabilities
Taxation
Other payables
Net assets
Capital and reserves
Share capital
Share premium
Shares held in treasury
Capital redemption reserve
Other reserves
Net profit
Reserves
Shareholders’ equity
Note
1
1
2
2017
£m
–
3,027
3,027
205
205
2016
£m
77
3,025
3,102
68
68
3,232
3,170
2
56
58
3
55
58
3,174
3,112
162
1,309
(753)
25
160
817
1,454
3,174
165
1,295
(645)
22
158
717
1,400
3,112
The RELX PLC company financial statements were approved by the Board of Directors and authorised for issue on 14 February 2018.
They were signed on its behalf by:
A J Habgood
Chairman
N L Luff
Chief Financial Officer
Financial statements and other information RELX PLC financial statements
173
RELX PLC statement of changes in equity
Balance at 1 January 2016
Total comprehensive income for the year
Dividends paid (4)
Repurchase of ordinary shares
Cancellation of shares
Issue of ordinary shares, net of expenses
Equity instruments granted to employees of the Group
Transfer of net profit to reserves
Balance at 1 January 2017
Total comprehensive income for the year
Dividends paid (4)
Repurchase of ordinary shares
Cancellation of shares
Issue of ordinary shares, net of expenses
Equity instruments granted to employees of the Group
Transfer of net profit to reserves
Balance at 31 December 2017
Share
capital
£m
170
–
–
–
(5)
–
–
–
165
–
–
–
(3)
–
–
–
162
Share
premium
£m
1,284
–
–
–
–
11
–
–
1,295
–
–
–
–
14
–
–
1,309
Shares
held in
treasury
£m
(604)
–
–
(376)
335
–
–
–
(645)
–
–
(371)
263
–
–
–
(753)
Capital
redemption
reserve(1)
Other
reserves(2)
£m
17
–
–
–
5
–
–
–
22
–
–
–
3
–
–
–
25
£m
156
–
–
–
–
–
2
–
158
–
–
–
–
–
2
–
160
Net
profit
£m
665
717
–
–
–
–
–
(665)
717
817
–
–
–
–
–
(717)
817
Reserves(3)
£m
1,426
–
(356)
–
(335)
–
–
665
1,400
–
(400)
–
(263)
–
–
717
1,454
Total
£m
3,114
717
(356)
(376)
–
11
2
–
3,112
817
(400)
(371)
–
14
2
–
3,174
(1) The capital redemption reserve does not form part of the distributable reserves balance.
(2) Other reserves relate to equity instruments granted to employees of the Group under share based remuneration arrangements, and do not
form part of the distributable reserves balance.
(3) Distributable reserves at 31 December 2017 were £1,518m (2016: £1,472m) comprising net profit and reserves, net of shares held in treasury.
(4) Refer to note 14 of the RELX Group consolidated financial statements on page 141 for further dividend disclosure.
RELX PLC accounting policies
Basis of preparation
RELX PLC meets the definition of a qualifying entity under FRS 100
(Financial Reporting Standard 100) issued by the Financial
Reporting Council (FRC). Accordingly, the financial statements
are prepared in accordance with FRS 101 (Financial Reporting
Standard 101) ‘Reduced Disclosure Framework’ as issued by the
Financial Reporting Council, incorporating the Amendments to
FRS 101 issued by the FRC in July 2015 and the amendments to
Company law made by The Companies, Partnerships and Groups
(Accounts and Reports) Regulations 2015.
As permitted by FRS 101, RELX PLC has taken advantage of the
disclosure exemptions available under that standard in relation to
share based payments, financial instruments, capital management,
presentation of comparative information in respect of certain
assets, presentation of a cash flow statement, standards not yet
effective, impairment of assets and related party transactions.
The RELX PLC financial statements have been prepared on the
historical cost basis.
Unless otherwise indicated, all amounts in the financial statements
are in millions of pounds.
The RELX PLC financial statements should be read in conjunction
with the Group consolidated financial statements and notes
presented on pages 117 to 164, which are also presented as the
RELX PLC consolidated financial statements. See the Basis of
preparation of the consolidated financial statements on page 122.
The RELX PLC financial statements are prepared on a going
concern basis, as explained on page 171.
As permitted by section 408 of the Companies Act 2006, and in
compliance with The Companies, Partnerships and Groups
(Accounts and Reports) Regulations 2015, the company has not
presented its own profit and loss account but has presented the
net profit for the year on the statement of financial position.
The RELX PLC accounting policies under FRS 101 are set out below.
Investments
Fixed asset investments are stated at cost, less provision, if
appropriate, for any impairment in value. The fair value of the
award of share options and conditional shares over RELX PLC
ordinary shares to employees of the Group are treated as a
capital contribution.
Other assets and liabilities are stated at historical cost, less
provision, if appropriate, for any impairment in value.
Shares held in treasury
The consideration paid, including directly attributable costs, for
shares repurchased is recognised as shares held in treasury and
presented as a deduction from total equity. Details of share capital
and shares held in treasury are set out in note 26 of the Group
consolidated financial statements.
Foreign exchange translation
Transactions entered into in foreign currencies are recorded at
the exchange rates applicable at the time of the transaction.
Taxation
Refer to note 10 on pages 134-135 of the consolidated financial
statements for the taxation accounting policies.
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174
RELX Group Annual reports and financial statements 2017
Notes to the RELX PLC financial statements
1 Investments
At 1 January 2016
Equity instruments granted to employees of the Group
At 1 January 2017
Impairment
Equity instruments granted to employees of the Group
At 31 December 2017
The joint venture is set out in note 3.
2 Related party transactions
Subsidiary
undertaking
£m
77
–
77
(77)
–
–
Joint
venture
£m
3,023
2
3,025
–
2
3,027
Total
£m
3,100
2
3,102
(77)
2
3,027
All transactions with joint ventures, subsidiaries and the Group’s employees, which are related parties of RELX PLC, are reflected in these
financial statements. Transactions with key management personnel including share based remuneration costs are set out in note 28 of the
Group consolidated financial statements and details of the Directors’ remuneration are included in the Directors’ Remuneration Report on
pages 83 to 102.
3 Joint venture as at 31 December 2017
RELX Group plc
Incorporated and operating in Great Britain
1-3 Strand
London WC2N 5JR
RELX Group plc is a holding company for group financing activities and
operating businesses involved in scientific and medical, risk and business
analytics, legal markets and organisation of trade exhibitions
63,226 ordinary voting shares
15,487 non-voting E shares
21,287 non-voting R shares
Equivalent to a 52.9% equity interest and a
50% interest in the voting shares
50%
–
100%
% holding as at
31 December
4 Contingent liabilities
There are contingent liabilities in respect of borrowings of joint ventures guaranteed by RELX PLC as follows:
Guaranteed jointly and severally with RELX NV
2017
£m
4,644
2016
£m
4,643
Financial instruments disclosures in respect of the borrowings covered by the above guarantees are given in note 19 of the Group’s
consolidated financial statements.
5 Subsequent events
As set out on page 3, a set of measures that will further simplify the RELX Group corporate structure into a single parent company have
been proposed. The simplification is subject to the approval of both RELX NV and RELX PLC shareholders. We expect a circular to be sent
to shareholders in the second quarter of 2018, with implementation in the third quarter of 2018, subject to various conditions including
shareholder approval. An implementation of the proposal would result in the merger of RELX NV's assets and liabilities into RELX PLC.
Financial statements and other information
175
RELX NV
Annual Report and
Financial Statements
In this section
176 Report of the Board
179 RELX NV statement of comprehensive income
179 RELX NV statement of financial position
180 RELX NV statement of changes in equity
180 RELX NV accounting policies
181 Notes to the RELX NV financial statements
182 Additional information (unaudited)
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176
RELX Group Annual reports and financial statements 2017
Report of the Board
The Non-Executive and Executive Directors present their joint
report, together with the financial statements of the Group and
of RELX NV (the Company), for the year ended 31 December 2017.
RELX PLC and RELX NV are separate, publicly-listed holding
companies. RELX PLC’s ordinary shares are traded on the London
and New York stock exchanges, and RELX NV’s shares are traded
on the Amsterdam and New York stock exchanges. RELX PLC
and RELX NV have equal voting rights in RELX Group plc, which
holds all of RELX Group’s operating businesses, subsidiaries and
financing activities. RELX PLC, RELX NV, RELX Group plc and its
subsidiaries, associates and joint ventures are together known
as 'RELX Group' or 'the Group'.
This Report of the Board and the company financial statements
should be read in conjunction with the consolidated financial
statements and other reports set out on pages 2 to 165, which are
incorporated by reference herein. Summary consolidated financial
information in euros is set out on page 184. The consolidated
financial statements on pages 106 to 164 are to be considered as
part of the notes to the statutory financial statements. The Annual
Report of RELX NV within the meaning of article 2:391 of the
Dutch Civil Code consists of pages 175 to 182 and, incorporated by
reference, pages 2 to 165 and the Corporate Governance Statement
of RELX NV dated 14 February 2018 which is published on the
RELX Group website (www.relx.com) is incorporated by reference
herein in accordance with the Besluit inhoud bestuursverslag .
Principal activities
RELX NV is a holding company. Its principal investment is its
direct 47.1% shareholding in RELX Group plc. RELX Group plc
is a global provider of information and analytics for professional
and business customers across industries. The remaining
shareholding in RELX Group plc is held by RELX PLC. A full
description is set out on page 71.
Financial statement presentation
Under the Governing Agreement between RELX PLC and RELX NV,
one RELX PLC ordinary share confers an equivalent economic
interest to one RELX NV share. Therefore all shareholders can
be regarded as having interests in a single economic entity.
Accordingly, the Group forms a single reporting entity for the
presentation of consolidated financial statements. The Group
consolidated financial statements represent the interests of both
sets of shareholders and are presented by both RELX PLC and
RELX NV as their respective consolidated financial statements.
A review of the Group’s performance during the year is set out on
pages 7 to 39, a summary of the principal risks facing the Group is
set out on pages 60 to 63, and the Group statement on corporate
responsibility is set out on pages 41 to 51.
The shares of RELX PLC and RELX NV are regarded as two
separate classes of share which together form the consolidated
issued share capital of the Group. In calculating earnings per
share of the Group, the earnings for each company are calculated
on a fully distributed basis. The Group’s usual practice is for only a
portion of earnings to be distributed by way of dividends. Dividends
paid to RELX PLC and RELX NV shareholders are, other than in
special circumstances, equalised at the gross level and reported
earnings per share have the same value for each RELX NV and
RELX PLC share.
In addition to the reported figures, adjusted profit figures are
presented as additional performance measures used by
management. These exclude the Group’s share of amortisation of
acquired intangible assets, acquisition-related costs, tax in joint
ventures, disposal gains and losses and other non-operating
items, related tax effects, and movements in deferred taxation
assets and liabilities related to acquired intangible assets and
include the benefit of tax amortisation where available on
acquired goodwill and intangible assets.
Parent company financial statements
In accordance with article 2:362(1) of the Dutch Civil Code, the
individual company financial statements of RELX NV (presented
on pages 179 to 182) were prepared under Financial Reporting
Standard 101 (FRS 101).
The profit attributable to the shareholders of RELX NV was €819m
(2016: €869m) and net assets as at 31 December 2017, principally
representing the investment in RELX Group plc under the
historical cost method and loans to their subsidiaries were €4,370m
(2016: €4,318m). Free reserves as at 31 December 2017 were
€4,095m (2016: €4,046m), comprising reserves and paid-in
surplus less shares held in treasury.
Dividends
The Board is recommending a final dividend of €0.316 per ordinary
share. This gives total ordinary dividends for the year of €0.448
(2016: €0.423), (up 6%). The final dividend will be paid on 22 May 2018.
Payment of this final dividend remains subject to approval of the
Company's shareholders at its 2018 Annual General Meeting.
Details of dividend cover and dividend policy are set out on page 58.
Financial statements and other information Report of the Board
177
Share capital
All issued shares are fully paid up and carry no additional
obligations or special rights.
During 2017, 2,067,694 ordinary shares in RELX NV were issued
as follows:
§ under convertible debentures at prices between €5.099
and €18.470
§ under executive share option schemes at prices between
€5.403 and €16.723
Information regarding shares outstanding at 31 December 2017
is shown in note 26 to the consolidated financial statements. At
31 December 2017, the total shares held in treasury were 52,563,100.
Another 3,775,905 shares were held by the Employee Benefit Trust.
At the 2017 Annual General Meeting, the shareholders approved
the reduction of the capital of RELX NV by the cancellation of up
to 50 million of its shares held in treasury. On 27 December 2017,
22 million ordinary shares held in treasury were cancelled on the
basis of this authorisation.
Substantial holdings
As at 14 February 2018, based on the public database of and on
notification received from the Netherlands Authority for the
Financial Markets, the Company is aware of interests in the capital
and voting rights of the issued share capital of the Company of at
least 3% by the following persons or organisations:
§ RELX NV
§ Janus Henderson Group Plc
§ BlackRock, Inc.
§ The Bank of New York Mellon Corporation
§ Jupiter Asset Management Ltd.
§ Massachusetts Financial Services Company
§ FIL Limited
Authority to purchase shares
At the 2017 Annual General Meeting, shareholders passed a
resolution delegating authority to the Board to acquire shares in
RELX NV for a period of 18 months from the date of the Annual
General Meeting up to and including 18 October 2018, for the
maximum amount of 10% of the issued capital. During the year,
21 million shares were purchased under this and the previous
delegation of authority. As at 31 December 2017 there were
52,563,100 shares held in treasury, representing 5.26% of the
issued shares. A further 2.9 million shares were purchased
between 2 January 2018 and the date of this report.
A resolution to renew the delegation of the authority is to be put
to the 2018 Annual General Meeting, together with a proposal
for approval of the reduction of RELX NV’s capital by cancellation
of accumulated shares held in treasury.
Corporate Governance
RELX NV is subject to the Dutch Corporate Governance Code
issued in December 2016 (the Dutch Code). The Dutch Code
replaces the former Code (issued in 2008) and is applicable to
financial years starting on or after 1 January 2017. For further
information on the application of the Dutch Code, see the
Corporate Governance Statement of RELX NV published on the
RELX Group website, www.relx.com, which is incorporated into
this Report of the Board by reference.
Significant agreements – change of control
The Governing Agreement between RELX NV and RELX PLC states
that upon a change of control of RELX NV (for these purposes,
the acquisition by a third party of 50% or more of the issued share
capital having voting rights), should there not be a comparable
offer from the offeror for RELX PLC, RELX PLC may serve notice
upon RELX NV varying certain provisions of the Governing
Agreement, including the governance and the standstill provisions.
There are a number of borrowing agreements including credit
facilities that in the event of a change of control of both RELX NV
and RELX PLC and, in some cases, a consequential credit rating
downgrade to sub-investment grade may, at the option of the
lenders, require repayment and/or cancellation as appropriate.
Financial statements and accounting records
The financial statements provide a true and fair view of the state
of affairs of the Company and the Group as of 31 December 2017
and of the profit or loss in 2017. In preparing the financial statements,
the Board ensures that suitable accounting policies, consistently
applied and supported by reasonable judgements and estimates,
have been used and applicable accounting standards have been
followed. The Board is responsible for keeping proper accounting
records, which disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that
the financial statements comply with the law. The Board has
general responsibility for taking reasonable steps to safeguard
the assets of the company and to prevent and detect fraud and
other irregularities.
Internal control
As required under sections 1.4.2 and 1.4.3 of the Dutch Code, the
Board has reviewed the effectiveness of the systems of internal
control and risk management during the last financial year. The
objective of these systems is to manage, rather than eliminate,
the risk of failure to achieve business objectives. Accordingly, they
can only provide reasonable, but not absolute, assurance against
material misstatement or loss. The outcome of this review has
been discussed with the external auditors.
The Board confirmed that this report provides sufficient insights
into the functioning of the risk management and control systems
as set out on pages 78-79 and that with regards to financial
reporting the risk management and control systems provide
reasonable assurance against material inaccuracies or loss.
They further confirmed that based on the current state of affairs,
it is justified that the financial reporting is prepared on a going
concern basis; and that the annual report describes those
material risks and uncertainties that are relevant to the
expectation of the Company’s continuity for the period of twelve
months after the preparation of the report.
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178
RELX Group Annual reports and financial statements 2017
Corporate Simplification
As set out on page 3, a set of measures that will further simplify
the RELX Group corporate structure into a single parent company
have been proposed. The simplification is subject to the approval
of both RELX NV and RELX PLC shareholders. We expect a circular
to be sent to shareholders in the second quarter of 2018, with
implementation in the third quarter of 2018, subject to various
conditions including shareholder approval. An implementation of
the proposal would result in the merger of the Company’s assets
and liabilities into RELX PLC.
Going concern
The Directors' statement on the appropriateness of adopting the
going concern basis of accounting is set out on page 79, which is
incorporated into this Report of the Board by reference.
Long-term viability statement
The Directors’ statement regarding the long-term viability of
the Group as required by the UK Corporate Governance Code is
set out on page 80, which is incorporated into this Report of the
Board by reference.
Directors’ responsibility statement
Each of the Directors whose names and roles can be found on
pages 66 to 67 confirms that to the best of their knowledge that
§ the consolidated financial statements, prepared in accordance
with International Financial Reporting Standards as issued by
the International Accounting Standards Board and as adopted
by the European Union and Part 9 of Book 2 of the Dutch Civil
Code, give a true and fair view of the financial position and profit
or loss of the Group;
§ the individual company financial statements prepared in
accordance with Financial Reporting Standard 101 'Reduced
Disclosure Framework' (FRS 101) and Part 9 of Book 2 of the
Dutch Civil Code, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
§ the Report of the Board includes a fair review of the
development and performance of the business during the
financial year and the position of the Group as at 31 December
2017 together with a description of the principal risks and
uncertainties that it faces.
Neither the Company nor the Directors accept any liability to
any person in relation to the Annual Report except to the extent
that such liability arises under Dutch law.
Disclosure of information to auditors
As part of the process of approving the RELX NV 2017 financial
statements, the Board has taken steps to ensure that all relevant
information was provided to the Company's auditors and, so far
as the Board is aware, there is no relevant audit information of
which the Company's auditors are unaware.
Auditors
Resolutions for the re-appointment of Ernst & Young Accountants
LLP as the Company's auditors and to authorise the Board to
determine their remuneration will be submitted to the forthcoming
Annual General Meeting on 18 April 2018.
Signed by:
Executive Directors
E Engstrom
(Chief Executive Officer)
N Luff
(Chief Financial Officer)
Non-Executive Directors
A Habgood
(Chairman)
W Hauser
(Senior Independent Director)
A Hennah
M van Lier Lels
R MacLeod
C Mills
L Sanford
B van der Veer
S Wood (appointed 26 September 2017)
Registered office
Radarweg 29
1043 NX Amsterdam
The Netherlands
Chamber of Commerce Amsterdam
Register file No: 33155037
14 February 2018
Financial statements and other information RELX NV financial statements
179
RELX NV statement of comprehensive income
FOR THE YEAR ENDED 31 DECEMBER
Administrative expenses
Operating profit
Dividends received from joint ventures
Finance income from joint ventures
Profit before tax
Tax expense
Net profit for the year
Other comprehensive income
Total comprehensive income for the year
RELX NV statement of financial position
before appropriation of profit
AS AT 31 DECEMBER
Non-current assets
Investments in joint ventures
Current assets
Amounts due from joint ventures – funding
Amounts due from joint ventures – other
Total assets
Current liabilities
Taxation
Other payables
Net assets
Capital and reserves
Share capital
Paid-in surplus
Shares held in treasury
Other reserves
Reserves
Net profit
Shareholders’ equity
Note
2
2017
€m
(2)
(2)
800
27
825
(6)
819
–
819
2016
€m
(2)
(2)
850
27
875
(6)
869
–
869
Note
2017
€m
2016
€m
4
4
4
1
2
4,180
4,178
279
7
286
4,466
35
58
93
4,373
70
2,339
(894)
203
1,836
819
4,373
230
5
235
4,413
36
59
95
4,318
71
2,318
(872)
201
1,731
869
4,318
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180
RELX Group Annual reports and financial statements 2017
RELX NV statement of changes in equity
Balance at 1 January 2016
Total comprehensive income for the year
Dividends paid (4)
Repurchase of shares
Cancellation of shares
Issue of shares, net of expenses
Equity instruments granted to employees of the Group
Transfer of net profit to reserves
Balance at 1 January 2017
Total comprehensive income for the year
Dividends paid (4)
Repurchase of shares
Cancellation of shares
Issue of shares, net of expenses
Equity instruments granted to employees of the Group
Transfer of net profit to reserves
Balance at 31 December 2017
Share
capital
€m
73
–
–
–
(2)
–
–
–
71
–
–
–
(1)
–
–
–
70
Paid-in
surplus (1)
€m
2,304
–
–
–
–
14
–
–
2,318
–
–
–
–
21
–
–
2,339
Shares
held in
treasury
€m
(948)
–
–
(386)
462
–
–
–
(872)
–
–
(375)
353
–
–
–
(894)
Other
reserves(2)
Net profit(3)
Reserves(3)
€m
199
–
–
–
–
–
2
–
201
–
–
–
–
–
2
–
203
€m
787
869
–
–
–
–
–
(787)
869
819
–
–
–
–
–
(869)
819
€m
1,803
–
(399)
–
(460)
–
–
787
1,731
–
(412)
–
(352)
–
–
869
1,836
Total
€m
4,218
869
(399)
(386)
–
14
2
–
4,318
819
(412)
(375)
–
21
2
–
4,373
(1) Within paid-in surplus, an amount of €2,186m (2016: €2,165m) is free of tax.
(2) Other reserves relate to equity instruments granted to employees of the Group under share based remuneration arrangements.
Other reserves do not form part of free reserves.
(3) Free reserves of the company at 31 December 2017 were €4,100m (2016: €4,046m), comprising net profit reserves and paid-in
surplus less shares held in treasury.
(4) Refer to note 14 of the RELX Group consolidated financial statements on page 141 for further dividend disclosure.
RELX NV accounting policies
Basis of preparation
The RELX NV financial statements have been prepared on the
historical cost basis. As permitted by 2:362 subsection 1 of the
Dutch Civil Code for companies with international operations, the
RELX NV financial statements have been prepared in accordance
with FRS 101 and in accordance with Part 9 of Book 2 of the Dutch
Civil Code.
RELX NV meets the definition of a qualifying entity under FRS 100
(Financial Reporting Standard 100) issued by the Financial
Reporting Council, the standard setting body in the UK.
Accordingly, the financial statements are prepared in accordance
with FRS 101 (Financial Reporting Standard 101) ‘Reduced
Disclosure Framework’ as issued by the Financial Reporting
Council, incorporating the Amendments to FRS 101 issued by
the FRC in July 2015.
As permitted by FRS 101, the company has taken advantage of
the disclosure exemptions available under that standard in
relations to share based payments, financial instruments,
capital management, presentation of comparative information in
respect of certain assets, presentation of a cash flow statement,
standards not yet effective, impairment of assets and related
party transactions.
The RELX NV financial statements have been prepared on the
historical cost basis.
Unless otherwise stated, the financial statements are in millions
of euros.
The RELX NV financial statements and notes should be read in
conjunction with the Group consolidated financial statements and
notes presented on pages 117 to 164, which are also presented as
the RELX NV consolidated financial statements. See the Basis of
preparation of the RELX Group consolidated financial statements
on page 122.
The RELX NV financial statements are prepared on a going
concern basis, as explained on page 79.
The RELX NV accounting policies under FRS 101 are set out below.
Investments
Fixed asset investments are stated at cost, less provision,
if appropriate, for any impairment in value. The fair value of the
award of share options and conditional shares over RELX NV
ordinary shares to employees of the Group are treated as a
capital contribution.
Other assets and liabilities are stated at historical cost, less
provision, if appropriate, for any impairment in value.
Financial statements and other information RELX NV financial statements
181
Shares held in treasury
The amount of consideration paid, including directly attributable
costs, for shares repurchased is recognised as shares held in
treasury and presented as a deduction from total equity. Details
of share capital and shares held in treasury are set out in note 26
of the Group consolidated financial statements.
Foreign exchange translation
Transactions entered into in foreign currencies are recorded
at the exchange rates applicable at the time of the transaction.
Taxation
Refer to note 10 on pages 134 to 135 of the RELX Group consolidated
financial statements for the taxation accounting policies.
Notes to the RELX NV financial statements
1 Other payables
Other payables include €6m (2016: €6m) of the Group’s employee convertible debenture loans with a weighted average interest rate
of 0.5% (2016: 0.8%). Depending on the conversion terms, the surrender of €200 par value debenture loans qualifies for 50 RELX NV
ordinary shares.
2 RELX NV and consolidated financial statements
YEAR ENDED 31 DECEMBER
RELX NV profit attributable to shareholders
RELX PLC profit attributable to shareholders
Consolidated net profit attributable to RELX PLC and RELX NV shareholders
2017
€m
819
931
2016
€m
869
875
1,891
1,416
The difference between the RELX NV and RELX Group consolidated net profit arises as the RELX NV profit and loss accounts include
dividends from RELX Group plc and other intra-group transactions (which are eliminated on a consolidated basis) whereas the RELX
Group consolidated net profit includes the consolidated net profit of the Group's subsidiaries and the Group's share of the results of its
joint ventures and associates.
AS AT 31 DECEMBER
RELX NV shareholders’ funds
RELX PLC shareholders' funds
Consolidated shareholders’ equity
2017
€m
4,373
3,555
2016
€m
4,318
3,641
2,635
2,714
The difference between the RELX NV and RELX Group consolidated shareholders’ funds arise as the RELX NV shareholders’ funds
includes the investment in RELX Group plc held at cost less any provision for impairment, and other intra-group transactions, such
as intra-group funding, which eliminate on consolidation, whereas the RELX Group consolidated equity includes the investment in
subsidiaries and the assets and liabilities (including external borrowings) of the Group as a whole.
3 Related party transactions
All transactions with joint ventures and the Group’s employees, which are related parties of RELX NV, are reflected in these financial
statements. Joint ventures are set out in note 4.
Transactions with key management personnel including share based remuneration costs are set out in note 28 to the Group consolidated
financial statements and details of the Directors’ remuneration are included in the Directors’ Remuneration Report on pages 83 to 102.
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182
RELX Group Annual reports and financial statements 2017
Notes to the RELX NV financial statements
4 Joint venture as at 31 December 2017
RELX Group plc
Incorporated and operating in Great Britain
1-3 Strand
London WC2N 5JR
RELX Group plc is a holding company for group financing activities and
operating businesses involved in scientific and medical, risk and business
analytics, legal markets and organisation of trade exhibitions
63,226 ordinary voting shares
15,487 non-voting E shares
21,287 non-voting R shares
Equivalent to a 47.1% equity interest and a
50% interest in the voting shares
50%
100%
–
Investments in joint ventures include equity instruments granted to the Group’s employees of €2m (2016: €2m)
% holding as at
31 December
5 Contingent liabilities
There are contingent liabilities in respect of borrowings of joint ventures guaranteed by RELX NV as follows:
Guaranteed jointly and severally with RELX PLC
2017
€m
2016
€m
5,202
5,432
Financial instruments disclosures in respect of the borrowings covered by the above guarantees are given in note 19 of the Group’s
consolidated financial statements.
6 Auditors' remuneration
Information on the audit and non-audit fees paid by RELX Group to Ernst & Young Accountants LLP and its associates is set out in note 4
to the Group’s consolidated financial statements.
7 Subsequent events
As set out on page 3, a set of measures that will further simplify the RELX Group corporate structure into a single parent company have
been proposed. The simplification is subject to the approval of both RELX NV and RELX PLC shareholders. We expect a circular to be
sent to shareholders in the second quarter of 2018, with implementation in the third quarter of 2018, subject to various conditions
including shareholder approval. An implementation of the proposal would result in the merger of the Company’s assets and liabilities
into RELX PLC.
8 Approval of financial statements
The RELX NV financial statements were signed and authorised for issue by the Board of Directors on 14 February 2018.
A J Habgood
Chairman of the Board
N L Luff
Chief Financial Officer
Additional information (unaudited)
Profit allocation
The Articles of Association provide that distributions of dividend may only be made insofar as the company’s equity exceeds the
amount of the paid-in capital, increased by the reserves which must be kept by virtue of the law and may be made in cash or in shares,
at the proposal of the Board. Distribution of dividends on ordinary shares shall be made in proportion to the nominal value of each share.
The Board may resolve what amount of dividend shall be paid on each ordinary share. Distribution of dividends on ordinary shares are
subject to approval at the General Meeting of Shareholders. Details of dividends proposed in relation to the financial year are in note 14
to the consolidated financial statements.
OVERVIEW OF PROFIT FOR THE YEAR AND DIVIDENDS PAID
Final dividend on ordinary shares for prior financial year
Interim dividend on ordinary shares for financial year
Surplus for the year
Total
2017
€m
287
125
407
819
2016
€m
281
118
470
869
2015
€m
283
114
390
787
Financial statements and other information
183
Other financial
information
In this section
184 Summary financial information in euros
185 Summary financial information in US dollars
186 Reconciliation of adjusted to GAAP measures
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184
RELX Group Annual reports and financial statements 2017
Summary financial information in euros
Basis of preparation
The Group’s consolidated financial information is presented in sterling. The summary financial information is a simple translation
of the Group’s consolidated financial statements into euros at the stated rates of exchange.
EXCHANGE RATES FOR TRANSLATION
Euro to sterling
Consolidated income statement
FOR THE YEAR ENDED 31 DECEMBER
Revenue
Operating profit
Profit before tax
Net profit attributable to RELX PLC and RELX NV shareholders
Adjusted operating profit
Adjusted profit before tax
Adjusted net profit attributable to RELX PLC and RELX NV shareholders
Adjusted earnings per ordinary share
Basic earnings per ordinary share
RELX PLC
RELX NV
Net dividend per ordinary share paid in the year
RELX PLC
RELX NV
Net dividend per ordinary share paid and proposed in relation to the financial year
RELX PLC
RELX NV
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
(Decrease)/increase in cash and cash equivalents
Movement in cash and cash equivalents
At start of year
(Decrease)/increase in cash and cash equivalents
Exchange translation differences
At end of year
Adjusted cash flow
Consolidated statement of financial position
AS AT 31 DECEMBER
Non-current assets
Current assets
Assets held for sale
Total assets
Current liabilities
Non-current liabilities
Liabilities associated with assets held for sale
Total liabilities
Net assets
Income statement
Statement of
financial position
2017
1.14
2016
1.22
2015
1.38
2017
1.12
2016
1.17
2017
€m
8,385
2,172
1,977
1,891
2,604
2,415
1,864
2016
€m
8,412
2,084
1,797
1,416
2,579
2,359
1,815
2015
€m
8,240
2,066
1,811
1,391
2,514
2,303
1,760
€0.923
€0.880
€0.835
€0.936
€0.936
€0.687
€0.687
€0.640
€0.682
€0.426
€0.433
€0.397
€0.410
€0.364
€0.400
€0.449
€0.448
€0.439
€0.423
€0.410
€0.403
2017
€m
2,107
(481)
(1,677)
(51)
190
(51)
(15)
124
2,499
2016
€m
2,052
(815)
(1,226)
11
166
11
13
190
2,460
2017
€m
11,339
2,418
–
13,757
5,069
6,029
–
11,098
2,659
2015
€m
1,942
(582)
(1,552)
(192)
356
(192)
2
166
2,363
2016
€m
12,835
2,746
7
15,588
6,206
6,617
6
12,829
2,759
Financial statements and other information Other financial information
185
Summary financial information in US dollars
Basis of preparation
The Group’s consolidated financial information is presented in sterling. The summary financial information is a simple translation of
the Group’s consolidated financial statements into US dollars at the stated rates of exchange. It does not represent a restatement under
US GAAP which would be different in some significant respects.
EXCHANGE RATES FOR TRANSLATION
US dollars to sterling
Consolidated income statement
FOR THE YEAR ENDED 31 DECEMBER
Revenue
Operating profit
Profit before tax
Net profit attributable to RELX PLC and RELX NV shareholders
Adjusted operating profit
Adjusted profit before tax
Adjusted net profit attributable to RELX PLC and RELX NV shareholders
Adjusted earnings per American Depositary Share (ADS)
Basic earnings per ADS
RELX PLC (Each ADS comprises one ordinary share)
RELX NV (Each ADS comprises one ordinary share)
Net dividend per ADS paid in the year
RELX PLC
RELX NV
Net dividend per ADS paid and proposed in relation to the financial year
RELX PLC
RELX NV
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
(Decrease)/increase in cash and cash equivalents
Movement in cash and cash equivalents
At start of year
(Decrease)/increase in cash and cash equivalents
Exchange translation differences
At end of year
Adjusted cash flow
Consolidated statement of financial position
AS AT 31 DECEMBER
Non-current assets
Current assets
Assets held for sale
Total assets
Current liabilities
Non-current liabilities
Liabilities associated with assets held for sale
Total liabilities
Net assets
Income statement
2017
1.29
2016
1.36
Statement of
financial position
2015
1.53
2017
1.35
2016
1.23
2017
US$m
9,488
2,457
2,237
2,140
2,946
2,732
2,109
$1.044
$1.060
$1.060
2016
US$m
9,377
2,323
2,003
1,579
2,875
2,630
2,024
$0.982
2015
US$m
9,136
2,290
2,007
1,542
2,788
2,554
1,951
$0.926
$0.766
$0.766
$0.710
$0.756
$0.482
$0.490
$0.443
$0.457
$0.404
$0.444
$0.508
$0.507
$0.489
$0.472
$0.437
$0.439
2017
US$m
2,384
(544)
(1,898)
(58)
199
(58)
9
150
2,828
2016
US$m
2,287
(908)
(1,367)
12
179
12
8
199
2,742
2017
US$m
13,667
2,915
–
16,582
6,110
7,267
–
13,377
3,205
2015
US$m
2,153
(646)
(1,720)
(213)
431
(213)
(39)
179
2,619
2016
US$m
13,493
2,887
7
16,387
6,524
6,957
6
13,487
2,900
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186
RELX Group Annual reports and financial statements 2017
Reconciliation of adjusted to GAAP measures
The Group uses adjusted figures, which are not defined by generally accepted accounting principles (“GAAP”) such as IFRS, as additional
performance measures. These measures are used by management, alongside the comparable GAAP measures, in evaluating the business
performance. The measures may not be comparable to similarly reported measures by other companies.
A reconciliation of non-GAAP measures to relevant GAAP measures is as follows:
YEAR ENDED 31 DECEMBER
Operating profit
Adjustments:
Amortisation of acquired intangible assets
Acquisition-related costs
Reclassification of tax in joint ventures
Reclassification of finance income in joint ventures
Adjusted operating profit
Profit before tax
Adjustments:
Amortisation of acquired intangible assets
Acquisition-related costs
Reclassification of tax in joint ventures
Net interest on net defined benefit schemes
Disposals and other non-operating items
Adjusted profit before tax
Tax charge
Adjustments:
Deferred tax movements on goodwill and acquired intangible assets
Tax on acquisition-related costs
Reclassification of tax in joint ventures
Tax on net interest on net defined benefit schemes
Tax on disposals and other non-operating items
Other deferred tax credits from intangible assets*
Exceptional tax credit**
Adjusted tax charge
Net profit attributable to RELX PLC and RELX NV shareholders
Adjustments (post tax):
Amortisation of acquired intangible assets
Acquisition-related costs
Net interest on net defined benefit obligation
Disposals and other non-operating items
Other deferred tax credits from intangible assets*
Exceptional tax credit**
Adjusted net profit attributable to RELX PLC and RELX NV shareholders
Cash generated from operations
Adjustments:
Dividends received from joint ventures and associates
Purchases of property, plant and equipment
Proceeds on disposals of property, plant, and equipment
Expenditure on internally developed intangible assets
Payments in relation to acquisition-related costs/other
Adjusted cash flow
2017
£m
1,905
314
56
10
(1)
2,284
2016
£m
1,708
346
51
10
(1)
2,114
1,734
1,473
314
56
10
15
(11)
2,118
346
51
10
14
40
1,934
(67)
(304)
42
(13)
(10)
(4)
16
(93)
(346)
(475)
18
(13)
(10)
(4)
(34)
(91)
–
(438)
1,659
1,161
356
43
11
5
(93)
(346)
1,635
364
38
10
6
(91)
–
1,488
2,445
2,236
38
(51)
1
(303)
62
2,192
44
(51)
1
(282)
68
2,016
* Movements on deferred tax liabilities arising on acquired intangible assets that do not qualify for tax amortisation.
** One-off non-cash credit from a deferred tax adjustment arising from the US Tax Cuts and Jobs Act.
Financial statements and other information
187
Shareholder
information
In this section
188 Shareholder information
190 Shareholder information and contacts
191 2018 financial calendar
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188
RELX Group Annual reports and financial statements 2017
Shareholder information
Annual Reports and Financial Statements 2017
The RELX Group Annual Reports and consolidated Financial
Statements for RELX PLC and RELX NV for the year ended
31 December 2017, and the Corporate Governance Statement
of RELX NV are available on the Group’s website, and from the
registered offices of the respective parent companies shown
on page 190. Additional financial information, including the
interim and full-year results announcements, trading updates
and presentations, is also available on the Group’s website,
www.relx.com
The consolidated financial statements set out in the Annual
Reports and Financial Statements are expressed in sterling,
with summary financial information expressed in euros and
US dollars. The financial statements of RELX PLC and RELX NV
are expressed in sterling and euros respectively.
Share price information
RELX PLC’s ordinary shares are traded on the London Stock
Exchange.
Trading symbol
ISIN
PLC
REL
GB00B2B0DG97
RELX NV’s ordinary shares are traded on the Euronext
Amsterdam Stock Exchange.
Trading symbol
ISIN
NV
REN
NL000614495
The RELX PLC and RELX NV ordinary shares are traded on the
New York Stock Exchange in the form of American Depositary
Shares (ADSs), evidenced by American Depositary Receipts
(ADRs).
Ratio to ordinary shares
Trading symbol
CUSIP code
PLC ADRs
1:1
RELX
759530108
NV ADRs
1:1
RENX
75955B102
The RELX PLC and RELX NV ordinary share prices and the ADR
prices may be obtained from the Group’s website, other online
sources and the financial pages of some newspapers.
For further information visit the ‘Investor Centre’ section
of the Group’s website www.relx.com/investorcentre
Information for RELX PLC ordinary
shareholders
Shareholder services
The RELX PLC ordinary share register is administered by Equiniti
Limited. Equiniti provides a free online portal for shareholders at
www.shareview.co.uk. Shareview allows shareholders to monitor
the value of their shareholdings, view their dividend payments and
submit dividend mandate instructions. Shareholders can also
submit their proxy voting instructions ahead of company meetings,
as well as update their personal contact details. Shareview
Dealing provides a share purchase and sale facility. Equiniti’s
contact details are shown on page 190.
Electronic communications
While hard copy shareholder communications continue to be
available to those shareholders requesting them, in accordance
with the Companies Act 2006 and the Company's articles of
association, RELX PLC uses the Group’s website as the main
method of communicating with shareholders. By registering their
details online at Shareview, shareholders can be notified by email
when shareholder communications are published on the Group’s
website. Shareholders can also use the Shareview website to
appoint a proxy to vote on their behalf at shareholder meetings.
Shareholders who hold their RELX PLC shares through CREST
may appoint proxies for shareholder meetings through the CREST
electronic proxy appointment service by using the procedures
described in the CREST manual.
Dividend mandates
Shareholders are encouraged to have their dividends paid
directly into a UK bank or building society account. This method
of payment reduces the risk of delay or loss of dividend cheques
in the post and ensures the account is credited on the dividend
payment date. A dividend mandate form can be obtained online
at www.shareview.co.uk, or by contacting Equiniti at the address
shown on page 190.
Equiniti has established a service for overseas shareholders
in over 90 countries, which enables shareholders to have their
dividends automatically converted from sterling and paid
directly into their nominated bank account. Further details
of this service, and the fees applicable, are available at
www.shareview.co.uk/info/ops or by contacting Equiniti
at the address shown on page 190.
Dividend Reinvestment Plan
Shareholders can choose to reinvest their RELX PLC dividends
by purchasing further shares through the Dividend Reinvestment
Plan (DRIP) provided by Equiniti. Further information
concerning the DRIP facility, together with the terms and
conditions and an application form can be obtained online at
www.shareview.co.uk/info/drip or by contacting Equiniti at the
address shown on page 190.
Financial statements and other information Shareholder information
189
Share dealing service
A telephone and internet dealing service is available through
Equiniti, which provides a simple way for UK resident shareholders
to buy or sell RELX PLC shares. For telephone dealing call
0345 603 7037 between 8.30am and 5.30pm (UK time), Monday
to Friday (excluding public holidays in England and Wales), and
for internet dealing log on to www.shareview.co.uk/dealing.
You will need your shareholder reference number shown on
your dividend confirmation.
How to avoid share fraud and boiler room scams
The Financial Conduct Authority (FCA) has issued some guidance
on how to recognise and avoid investment fraud:
§ Legitimate firms authorised by the FCA are unlikely to contact
you unexpectedly with an offer to buy or sell shares
§ If you receive an unsolicited phone call, do not get into a
conversation, note the name of the person and firm contacting
you and then end the call
§ Check the Financial Services Register available at
https://register.fca.org.uk/ to see if the person and firm
contacting you is authorised by the FCA. If you wish to call
the person or firm back, only use the contact details listed
on the Register
§ Call the FCA on 0800 111 6768 if the firm does not have any
contact details on the Register, or if you are told that they
are out of date
§ Search the list of unauthorised firms to avoid at
https://www.fca.org.uk/consumers/unauthorised-firms-
individuals#list
§ If you do buy or sell shares through an unauthorised firm,
you will not have access to the Financial Ombudsman Service
or the Financial Services Compensation Scheme
§ Consider obtaining independent financial and professional
advice before you hand over any money. If it sounds too good
to be true it probably is.
How to report a scam
If you are approached by fraudsters, please tell the FCA using
the share fraud reporting form at www.fca.org.uk/consumers/
report-scam-unauthorised-firm, where you can find out more
about investment scams. You can also call the FCA Consumer
Helpline on 0800 111 6768.
If you have already paid money to share fraudsters, you should
contact Action Fraud on 0300 123 2040 or use their online tool:
http://www.actionfraud.police.uk/report_fraud
ShareGift
The Orr Mackintosh Foundation operates a charity share donation
scheme for shareholders with small parcels of shares whose
value makes it uneconomic to sell them. Details of the scheme
can be obtained from the ShareGift website at www.sharegift.org,
or by telephoning ShareGift on 020 7930 3737.
Sub-division of ordinary shares and share consolidation
On 28 July 1986, each RELX PLC ordinary share of £1 nominal
value was sub-divided into four ordinary shares of 25p each.
On 2 May 1997, each 25p ordinary share was sub-divided into two
ordinary shares of 12.5p each. On 7 January 2008, the ordinary
shares of 12.5p each were consolidated on the basis of 58 new
ordinary shares of 14⁵¹⁄₁₁₆p nominal value for every 67 ordinary
shares of 12.5p each held.
Capital gains tax
The mid-market price of RELX PLC’s £1 ordinary shares on
31 March 1982 was 282p. Adjusting for the sub-divisions and
share consolidation referred to above results in an equivalent
mid-market price of 40.72p for each existing ordinary share
of 14⁵¹⁄₁₁₆p nominal value.
Warning to shareholders –
unsolicited investment advice
§ From time to time shareholders may receive unsolicited
calls from fraudsters
§ Fraudsters use persuasive and high-pressure tactics to lure
investors into scams, sometimes known as boiler room scams
§ They may offer to sell shares that turn out to be worthless or
non-existent, or to buy shares at an inflated price in return for
an upfront payment
§ While high profits are promised, if you buy or sell shares in
this way you will probably lose your money
§ Thousands of people contact the Financial Conduct Authority
about investment fraud each year, with victims losing an
average of £32,000
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190
RELX Group Annual reports and financial statements 2017
Shareholder information and contacts
Information for RELX NV ordinary
shareholders
Information for RELX PLC and RELX NV
ADR holders
Shareholder services
Enquiries from holders of RELX NV registered ordinary shares
in relation to share transfers, dividends, change of address and
bank accounts should be directed to the Company Secretary of
RELX NV, at the registered office address shown below.
ADR shareholder services
The RELX PLC and RELX NV ADR Depositary is Citibank NA.
Enquiries concerning RELX PLC and RELX NV ADRs should be
addressed to the ADR Depositary at the address shown below.
Dividends
Dividends on RELX NV ordinary shares are declared and paid in
euros. Registered shareholders in RELX NV will receive dividends
from the Company by transmission to the bank account which they
have notified to the Company. Dividends on shares in bearer form
are paid through the intermediary of a bank or broker.
Dividend Reinvestment Plan
By instructing their bank or intermediary, shareholders can
choose to reinvest their RELX NV dividends by purchasing further
shares through the Dividend Reinvestment Plan (DRIP) provided
by ABN AMRO Bank NV. Further information concerning the DRIP
facility can be obtained online at www.securitiesinfo.com.
Consolidation of ordinary shares
On 7 January 2008, the RELX NV ordinary shares of €0.06 each
were consolidated on the basis of 58 new ordinary shares of
€0.07 each for every 67 ordinary shares of €0.06 each held.
Contacts
RELX PLC
Head Office and Registered Office
1-3 Strand
London WC2N 5JR
United Kingdom
Tel: +44 (0)20 7166 5500
Fax: +44 (0)20 7166 5799
Auditors
Ernst & Young LLP
1 More London Place
London SE1 2AF
United Kingdom
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing BN99 6DA
West Sussex
United Kingdom
www.shareview.co.uk
Tel: 0371 384 2960 (UK callers)
Tel: +44 121 415 7047 (callers outside the UK)
Dividends
Dividend payments on RELX PLC and RELX NV ADRs are
converted into US dollars by the ADR Depositary.
Annual Report on Form 20-F
The RELX Group Annual Report on Form 20-F is filed electronically
with the United States Securities and Exchange Commission.
A copy of the Form 20-F is available on the Group’s website, or
from the ADR Depositary at the address shown below.
RELX NV
Head Office and Registered Office
Radarweg 29
1043 NX Amsterdam
The Netherlands
Tel: +31 (0)20 485 2222
Fax: +31 (0)20 485 2032
Auditors
Ernst & Young Accountants LLP
Antonio Vivaldistraat 150
1083 HP Amsterdam
The Netherlands
Listing/paying agent
ABN AMRO Bank NV
Gustav Mahlerlaan 10
1082 PP Amsterdam
The Netherlands
www.securitiesinfo.com
RELX PLC and RELX NV ADR Depositary
Citibank Depositary Receipt Services
PO Box 43077
Providence, RI 02940-3077
USA
www.citi.com/dr
Email: citibank@shareholders-online.com
Tel: +1 877 248 4327
+1 781 575 4555 (callers outside the US)
Financial statements and other information Shareholder information
191
2018 financial calendar
15 February Results announcement for the year ended 31 December 2017
18 April
18 April
19 April
26 April
27 April
22 May
25 May
26 July
2 August*
3 August*
24 August* Payment date – 2018 interim dividend, RELX PLC and RELX NV ordinary shares
29 August* Payment date – 2018 interim dividend, RELX PLC and RELX NV ADRs
Trading update issued in relation to the 2018 financial year
RELX NV Annual General Meeting – The Grand Hotel, Oudezijds Voorburgwal 197, 1012 EX Amsterdam, The Netherlands
RELX PLC Annual General Meeting – Millennium Hotel, Grosvenor Square, London W1K 2HP
Ex-dividend date – 2017 final dividend, RELX PLC and RELX NV ordinary shares and ADRs
Record date – 2017 final dividend, RELX PLC and RELX NV ordinary shares and ADRs
Payment date – 2017 final dividend, RELX PLC and RELX NV ordinary shares
Payment date – 2017 final dividend, RELX PLC and RELX NV ADRs
Interim results announcement for the six months to 30 June 2018
Ex-dividend date – 2018 interim dividend, RELX PLC and RELX NV ordinary shares and ADRs
Record date – 2018 interim dividend, RELX PLC and RELX NV ordinary shares and ADRs
* These dates remain provisional and subject to change.
Dividend history
The following tables set out dividends paid (or proposed) in relation to the three financial years 2015–2017.
ORDINARY SHARES
Final dividend for 2017**
Interim dividend for 2017
Final dividend for 2016
Interim dividend for 2016
Final dividend for 2015
Interim dividend for 2015
pence per PLC ordinary share
27.70
11.70
25.70
10.25
22.30
7.40
€ per NV ordinary share
0.316
0.132
0.301
0.122
0.288
0.115
Payment date
22 May 2018
25 August 2017
22 May 2017
26 August 2016
20 May 2016
28 August 2015
** Proposed dividend, to be submitted for approval at the respective Annual General Meetings of RELX PLC and RELX NV in April 2018.
ADRS
Final dividend for 2017
Interim dividend for 2017
Final dividend for 2016
Interim dividend for 2016
Final dividend for 2015
Interim dividend for 2015
$ per PLC ADR
***
0.15085
0.33387
0.13452
0.32348
0.11356
$ per NV ADR
***
0.15659
0.33817
0.13645
0.32247
0.12836
Payment date
25 May 2018
30 August 2017
25 May 2017
31 August 2016
25 May 2016
2 September 2015
*** Payment will be determined using the appropriate £/US$ and €/US$ exchange rate on 22 May 2018.
Notes:
The dividend rates shown for RELX NV ordinary shares and ADRs are gross dividend rates before the deduction of Dutch withholding tax.
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192
RELX Group Annual reports and financial statements 2017
Cautionary note
This Announcement does not constitute or form part of any offer
to sell or subscribe for or any invitation to purchase or subscribe
for any securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the simplification. It does not constitute
a prospectus or prospectus equivalent document and investors
should not make any investment decision in relation to any shares
referred to in this Announcement. No offer of securities shall be
made except by means of a prospectus meeting the requirements
of the Securities Act of 1933, as amended, and applicable
European rules and regulations. A prospectus is expected to
be made available to shareholders on RELX Group’s website
(www.relx.com) in due course.
Important additional information will be filed with the SEC
In addition to the prospectus to be made available to shareholders,
RELX PLC will file with the U.S. Securities and Exchange
Commission (the “SEC”) a registration statement on Form F-4
that will include the prospectus. RELX PLC plans to mail the
prospectus to the holders of American Depositary Shares of
RELX N.V. and U.S. holders of ordinary shares of RELX N.V.
(collectively, “RELX NV U.S. Shareholders”) in connection with the
Simplification. RELX N.V. U.S. SHAREHOLDERS ARE URGED TO
READ THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS
FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT RELX PLC, RELX N.V.,
THE SIMPLIFICATION AND RELATED MATTERS. RELX N.V. U.S.
Shareholders will be able to obtain free copies of the prospectus
and other documents filed with the SEC by RELX PLC and RELX N.V.
through the website maintained by the SEC at www.sec.gov.
In addition, RELX N.V. U.S. Shareholders will be able to obtain
free copies of the prospectus and other documents filed by
RELX PLC with the SEC by contacting RELX Investor Relations
at 1-3 Strand, London WC2N 5JR or by calling +44 20 7166 5634.
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