Annual Report and
Financial Statements
2019
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RELX is a global provider of information-based
analytics and decision tools for professional and
business customers.
We help scientists make new discoveries, doctors and
nurses improve the lives of patients and lawyers win
cases. We prevent online fraud and money laundering,
and help insurance companies evaluate and predict risk.
Our events enable customers to learn about markets,
source products and complete transactions.
In short, we enable our customers to make better
decisions, get better results and be more productive.
Forward-looking statements
This Annual Report 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 risks and uncertainties that could cause actual results or outcomes of RELX PLC
(together with its subsidiaries, “RELX”, “we” or “our”) to differ materially from those expressed in any forward-looking statement. The terms “outlook”, “estimate”,
“project”, “plan”, “intend”, “expect”, “should”, “will”, “believe”, “trends” and similar expressions may indicate a forward-looking statement. Important factors that
could cause actual results or outcomes to differ materially from estimates or forecasts contained in the forward-looking statements include, among others, current
and future economic, political and market forces; changes in law and legal interpretations affecting RELX intellectual property rights and internet communications;
regulatory and other changes regarding the collection, transfer or use of third-party content and data; demand for RELX products and services; competitive factors in
the industries in which RELX operates; ability to realise the future anticipated benefits of acquisitions; significant failure or interruption of our systems; compromises
of our data security systems or other unauthorised access to our databases; 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 with the US Securities and Exchange Commission.
RELX Annual report and financial statements 2019
1
2019 Financial highlights
Chair’s statement
Overview*
2
3
4 Chief Executive Officer’s report
5 RELX business overview
Market segments*
12 Scientific, Technical & Medical
18 Risk & Business Analytics
24 Legal
30 Exhibitions
Corporate Responsibility*
37 Corporate Responsibility overview
Financial review*
52 Chief Financial Officer’s report
58 Principal and emerging risks
Governance
64 Board Directors
66 RELX Senior Executives
68 Chair’s introduction to corporate governance
70 Corporate governance review
85 Report of the Nominations Committee
88 Directors’ remuneration report
112 Report of the Audit Committee
115 Directors’ report
Financial statements
and other information
120 Independent auditor’s report
128 Consolidated financial statements
177 RELX PLC annual report and financial statements
182 Summary financial information in euros
183 Summary financial information in US dollars
184 Reconciliation of adjusted to GAAP measures
186 Shareholder information
IBC 2020 financial calendar
* Comprises the Strategic Report in accordance with The (UK)
Companies Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013.
Contents
Get more information online
A PDF of the full Annual Report and further
information about our businesses can be
found online at our website: www.relx.com
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 2
2019 Financial highlights
§ Underlying revenue growth of 4%
§ Underlying adjusted operating profit growth of 5%
§ Reported operating profit £2,101m (£1,964m)
§ Adjusted EPS at constant currency up 7%; in sterling up 10% to 93.0p
§ Reported EPS 77.4p (71.9p)
§ Full-year dividend up 9% to 45.7p
§ Strong financial position and cash flow; cash flow conversion at 96%
RELX financial summary
REPORTED FIGURES
For the year ended 31 December
Revenue
Operating profit
Profit before tax
Net profit attributable to RELX PLC shareholders
Net margin
Net borrowings
Reported earnings per share
Ordinary dividend per RELX PLC share
ADJUSTED FIGURES
For the year ended 31 December
Operating profit
Operating margin
Profit before tax
Net profit attributable to RELX PLC shareholders
Net margin
Cash flow
Cash flow conversion
Return on invested capital
Adjusted earnings per share
2019
£m
7,874
2,101
1,847
1,505
19.1%
6,191
77.4p
45.7p
2019
£m
2,491
31.6%
2,200
1,808
23.0%
2,402
96%
13.6%
93.0p
2018
£m
7,492
1,964
1,720
1,422
19.0%
6,177
71.9p
42.1p
2018
£m
2,346
31.3%
2,145
1,674
22.3%
2,243
96%
13.2%
84.7p
Change at
constant
currencies
+2%
Change
underlying
+4%
Change
underlying
+5%
Change at
constant
currencies
+3%
0%
+5%
Change
+5%
+7%
+7%
+6%
+8%
+9%
Change
+6%
+3%
+8%
+7%
+10%
+7%
The shares of RELX PLC are traded on the London, Amsterdam and New York stock exchanges. RELX PLC and its subsidiaries, joint ventures and associates are together
known as ‘RELX’.
RELX 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 2018, we excluded exceptional tax credits, see note 9 on page 145.
Reconciliations between the reported and adjusted figures are set out on page 184. Underlying growth rates are calculated at constant currencies, excluding the results
of acquisitions until twelve months after purchase, and excluding the results of disposals and assets held for sale. Underlying revenue growth rates also exclude exhibition
cycling. Constant currency growth rates are based on 2018 full-year average and hedge exchange rates.
RELX Annual report and financial statements 2019 | Overview RELX Annual report and financial statements 2019
3
Chair’s statement
made great progress over the past decade and is well positioned
for future growth. As a result, I believe that this is the year both
from my own perspective and from that of the company in which
to make a change of Chair.
At the 2019 Annual General Meeting, Ben van der Veer stood
down from the Board after nine years’ service, Carol Mills, a
Non-Executive director since 2016 left the Board, and Andrew
Sukawaty was appointed a Non-Executive Director. Andrew has
had a 30-year career in the telecoms industry, he is Chairman
of Inmarsat and was a Non-Executive Director of Sky between
2013 and 2018. In December Charlotte Hogg was appointed a
Non-Executive Director. Ms Hogg is currently Executive Vice
President and Chief Executive Officer for the European operations
of Visa, a Board Director of Visa Europe and a member of Visa’s
global executive committee. In 2020, Suzanne Wood will take over
from Adrian Hennah as Chair of the Audit Committee. Adrian,
who has been on the Board since 2011, will be stepping down as a
Non-Executive Director after the next Annual General Meeting.
I would like to thank Ben, Adrian and Carol for their support and advice,
and am delighted that Andrew and Charlotte have joined the Board.
Stakeholder consultation
We conducted our biennial survey to understand what matters
to different stakeholders: we asked investors, customers,
employees, suppliers, and representatives from government and
non-governmental organisations among others, to rank the issues
they believe have the biggest impact on RELX. The top two issues
were having the right people and data privacy and security. We also
asked them to identify where we have the biggest impact on society
and the environment – our unique contributions as a business
came first, followed by access to information.
Corporate responsibility
Corporate responsibility (CR) has been a priority at RELX for many
years. The Board of Directors regularly takes time to engage on the
subject, overseeing our CR objectives and performance, ensuring
we are operating at the highest commercial and ethical standards.
Our belief remains firmly that good governance and sustainability
are integral to good financial performance.
We believe that CR is a core strength of RELX and it is significant
that Environmental, Social and Governance (ESG) performance
is increasingly being recognised as an important indicator of a
company’s overall health, the sustainability of its market positions,
its attractiveness to key employees and its ability to generate
growing long-term returns to shareholders. As a company with a
long-standing record of leadership in this broad field, RELX is now
benefitting from the greater profile that is being given to ESG and
the increasingly rigorous and objective ways in which it is being
measured, monitored and indexed. In 2019 RELX was ranked
second in the S&P Global 1200 for ESG performance by CSRHub,
and sixth in the newly launched Responsibility 100 index of
FTSE 100 companies measured against the United Nations 17
Sustainable Development Goals. In 2019 RELX retained its AAA
ESG rating with MSCI for the fourth consecutive year, and in
January 2020 a Sustainalytics ESG report put RELX in the top one
percent of over 12,000 companies covered.
Our corporate responsibility objectives for the year ahead align
with the findings of our stakeholder survey (the full listing is
available in the 2019 RELX Corporate Responsibility Report).
Anthony Habgood
Chair
Sir Anthony Habgood
Chair
We continued to execute well on
our strategic priorities in 2019.
This was reflected in strong
earnings. We also continued to build
on our strong environmental, social
and governance performance
during the year, and this was again
recognised in the high ratings given to
us by a number of external agencies.
RELX continued to execute well on its strategic priorities aimed at
achieving more predictable revenues, a higher growth profile and
improving returns. Underlying revenue growth was again 4%, with
underlying adjusted operating profits up 5%, as we continued to
grow revenues ahead of costs. Adjusted earnings per share grew
10% in sterling to 93.0p (84.7p), and 7% at constant currencies.
Reported earnings per share were 77.4p (71.9p).
Dividends
We are proposing a full year dividend increase of 9% to 45.7p.
The long-term dividend policy is unchanged.
Balance sheet
Net debt was £6.2bn at 31 December 2019, unchanged from last
year. Net debt/EBITDA including pensions and leases was 2.5x,
compared with 2.4x in 2018. Capital expenditure represented 5%
of revenues.
Share buybacks
In 2019, we deployed £600m on share buybacks. We intend to
deploy a total of £400m in 2020. By 13 February, £100m of this
year’s total had already been completed, leaving a further £300m
to be deployed during the year.
The Board
As announced in February, after over ten years as Chair, I have
decided to retire from the Board when a successor has been
appointed. A comprehensive search is underway. The Group has
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 4
Chief Executive Officer’s report
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
business 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 £600m in 2019 and announced £400m in buybacks
for 2020.
Corporate responsibility
We have long recognised that corporate responsibility is
important to RELX and is critical to the company’s long-term
success. We define corporate responsibility as the way we do
business, working 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.
During 2019, RELX remained committed to advancing its unique
contributions as a business, which are aligned with the United
Nations Sustainable Development Goals (SDGs). Knowledge is
critical to achieving the SDGs by 2030, and during the year we
strengthened the free RELX SDG Resource Centre, reaching 1000
sources from across our business and from partners, including
UN University and the Global Partnership for Sustainable
Development Data. We used our Scopus citations database and
SciVal analytical tool to produce two new SDG graphics on water
(SDG 6) and sustainable cities (SDG 11), which reveal the state of
research underpinning these goals.
To progress corporate responsibility (CR) across RELX, we
prioritised training for employees on our culture of integrity;
expanded ISO27001 data protection compliance certification to
more parts of our business; focused on inclusion, and increased
the number of women in our tech mentoring programme to 95
pairs. We reached 30% women on our executive team. We rolled
out our updated Editorial Policy and helped embed accessibility
further by creating an Accessibility Advisory Board. Globally 45%
of staff volunteered in our communities and 56% of our businesses
reached the RELX Environmental Standards.
We also launched the LexisNexis Rule of Law Foundation to
facilitate projects with key partners on the rule of law. We held
Rule of Law Cafés in London, Singapore and Malaysia to bring
together the legal community, business, government and
non-governmental organisations to share information on going
beyond legal minimums to advance the rule of law.
In the year ahead we will work to further strengthen our
CR performance.
Outlook
Key business trends in the early part of 2020 are consistent with the
full year 2019, 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
Erik Engstrom
Chief Executive Officer
RELX continued to make good
progress in 2019. Our number one
strategic priority is unchanged: the
organic development of increasingly
sophisticated information-based
analytics and decision tools that
deliver enhanced value to our
customers, supplemented by
selective acquisitions of targeted
data, analytics and exhibition
assets that support our organic
growth strategies
2019 progress
Our positive financial performance continued in 2019 with
underlying revenue growth across all four business areas.
Underlying revenue growth was 4%. Underlying operating profit
growth was 5%, and adjusted earnings per share grew 7% at
constant currencies.
The underlying growth rate reflects good growth in electronic and
face-to-face revenues (91% of the total), and the further organic
development of our analytics and decision tools.
We also continued to reshape our portfolio through selective
acquisitions of targeted data, analytics and exhibitions assets
that support our organic growth strategies. We completed 14
acquisitions for a total consideration of £416m, the largest of which
was Mack Brooks, a leading organiser of complementary events.
Since the year end we acquired ID Analytics, a provider of credit
and fraud risk solutions, and Emailage, a provider of email based
fraud prevention solutions, both will complement our existing
fraud prevention services within Risk & Business Analytics.
RELX Annual report and financial statements 2019 | Overview RELX Annual report and financial statements 2019
5
RELX business overview
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.
We aim to build leading positions in long-term global growth
markets and leverage our skills, assets and resources across
RELX, both to build solutions for our customers and to pursue
cost efficiencies.
We are systematically migrating all of our information solutions
across RELX towards higher value-add decision tools, adding
broader data sets, 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 has led to more predictable
revenues through a better asset mix and geographic balance; a
higher growth profile as we expand in higher growth segments,
exit from structurally challenged businesses, and gradually
reduce the drag from print format declines; and improved returns
by focusing on organic development with strong cash generation.
WHERE WE ARE GOING
HOW WE ARE GETTING THERE
IMPLICATIONS FOR BUSINESS PROFILE
§§ Deliver improved outcomes
to professional customers
§§ Combine content & data with
analytics & technology in
global platforms
§§ Build leading positions in
long-term global growth
markets
RELX business model
§§ Organic development:
Investment in transforming
core business; build-out of
new products
§§ Portfolio reshaping:
Selective acquisitions;
selective divestments
§§ Leverage institutional
skills, assets and resources
across RELX
§§ More predictable revenues
§§ Higher growth profile
§§ Improving returns
RELX is a global provider of information-based analytics and decision tools for professional and business customers. We leverage deep
customer understanding to combine leading content and data sets with powerful global technology platforms to build sophisticated
analytics and decision tools that deliver enhanced value to our customers.
These products are generally sold through dedicated sales forces direct to customers and are priced on a subscription or transactional
basis, often under multi-year contracts. They are predominantly delivered in electronic and face-to-face formats, and, to a small extent,
in print.
Our products often account for less than 1% of our customers‘ total cost base but can have a significant and positive impact on the
economics of the remaining 99%. Our objective is to continue to enhance the value that we deliver to our customers and over time to grow
our own total cost base below our rate of revenue growth on an underlying basis.
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
REVENUE BY TYPE
£7,874m
9%
16%
Electronic
Face-to-face
Print
75%
£7,874m
21%
£7,874m
1%
North America
Europe
Rest of world
47%
23%
56%
Subscriptions
Transactional
Advertising
52%
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 6
Key performance indicators
RELX’s key performance indicators (KPIs) track progress against
long-term priorities. At the group level, given the diverse nature
of our end markets, we look at the continued migration of the
business towards electronic delivery, the increasing introduction
of electronic decision tools, group level financial metrics, and
corporate responsibility and sustainability metrics. The executive
directors’ remuneration policy includes measures linked to
the financial KPIs and may also include non-financials. See pages
97 to 109 for details of the implementation of the policy in 2019,
page 110 for the implementation in 2020 and pages 88 to 96 for the
remuneration policy to be proposed for approval by shareholders
at the Annual General Meeting to be held in April 2020.
In addition, we track KPIs within each market segment, at
the product level, relevant to the performance of the specific
business units.
Significant group financial KPIs are set out below.
For non-financial KPIs a summary of the corporate responsibility
and sustainability performance metrics and targets are set out on
pages 37 to 49 in the Corporate Responsibility overview.
Financial KPIs
UNDERLYING REVENUE GROWTH
UNDERLYING ADJUSTED
OPERATING PROFIT GROWTH
ADJUSTED EARNINGS PER SHARE GROWTH
Constant currency
+3%
+4%
+4%
+4%
+4%
+6%
+6%
+6%
+5%
+5%
+8% +8%
+7% +7%
+7%
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
RETURN ON INVESTED CAPITAL
ADJUSTED CASH FLOW CONVERSION
DIVIDEND PER SHARE
12.7% 13.0%
12.9%
13.2% 13.6%
94%
96%
96% 96%
96%
Pence
35.95
29.7
39.4
42.1
45.7
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
Revenue by category
REVENUE BY FORMAT
64% 64%
60% 58% 56%
37%
52% 51%
Electronic
Face-to-face
Print
33% 27% 25% 22% 21% 19% 18% 15%
14% 14%
15% 15% 15% 16%
15%
15%
13%
11%
10%
9%
15%
16%
16%
12% 12% 12%
13% 12%
14% 14%
22%
22%
28%
30%
35% 37%
32%
17%
15%
48% 50% 59%
61% 63% 64%
66% 66% 70%
72%
74% 74%
75%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
RELX Annual report and financial statements 2019 | Overview RELX Annual report and financial statements 2019 | RELX business overview
7
Market segments
RELX serves customers in more than 180 countries and has offices in about 40 countries. It employs over 33,000 people, of whom almost
half are in North America.
Scientific, Technical & Medical provides information and analytics that help institutions and
professionals progress science, advance healthcare and improve performance
Segment position
Global #1
Risk & Business Analytics provides customers with information-based analytics and decision
tools that combine public and industry-specific content with advanced technology and algorithms
to assist them in evaluating and predicting risk and enhancing operational efficiency
Key verticals #1
Legal provides legal, regulatory and business information and analytics that help customers
increase their productivity, improve decision-making and achieve better outcomes
US #2
Outside US #1 or 2
Exhibitions is a leading global events business. It combines face-to-face with data and digital tools
to help customers learn about markets, source products and complete transactions at over 500
events in almost 30 countries, attracting more than 7m participants
Global #2
Financial summary by market segment
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
Unallocated items
Revenue
Adjusted operating profit
2019
£m
2,637
2,316
1,652
1,269
7,874
Change
underlying
+2%
+7%
+2%
+6%
+4%
2019
£m
982
853
330
331
(5)
2,491
Change
underlying
+3%
+8%
+8%
-1%
+5%
RELX 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 2018, we excluded exceptional tax credits, see note 9 on page 145.
Reconciliations between the reported and adjusted figures are set out on page 184. Underlying growth rates are calculated at constant currencies, excluding the results of
acquisitions until twelve months after purchase, and excluding the results of disposals and assets held for sale. Underlying revenue growth rates also exclude exhibition
cycling. Constant currency growth rates are based on 2018 full-year average and hedge exchange rates.
REVENUE
REVENUE
£7,874m
16%
21%
ADJUSTED OPERATING PROFIT
£2,491m
13%
Scientific,
Technical
& Medical
34%
Risk & Business
Analytics
13%
Legal
Exhibitions
Scientific,
Technical
& Medical
Risk & Business
Analytics
Legal
Exhibitions
39%
29%
35%
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 8
Harnessing technology
across RELX
Around 9,000 technologists, half of whom are software
engineers, work at RELX. Annually, the company spends
$1.4bn on technology. The combination of our rich data
assets, technology infrastructure and knowledge of how
to use next generation technologies, such as machine
learning and natural language processing, allows us to
create effective solutions for our customers.
4
new drug candidates to
treat chronic pancreatitis,
identified on Elsevier’s
AI-powered life sciences
platform Entellect in
60 days through analysis
of 10 million drug target
interactions
Helping discover new drugs to treat rare diseases
Chronic pancreatitis, which affects about one million people
globally, is a painful disease with no current cure. Because of
the high cost and low return for finding treatments for such
relatively rare diseases, drug makers devote little time and
effort to finding cures.
Elsevier, with its vast stores of drug data and artificial
intelligence (AI) technologies, including Entellect, its newest
AI-powered life sciences platform, felt this was the perfect
opportunity to make a difference in the community. Elsevier
teamed with non-profit organisations, industry and academic
partners, as well as researchers across the globe to find drugs
already in existence that could be repurposed to treat the
rare disease.
The company hosted a datathon collaboration ‘Repurposing
Drugs for Rare Diseases’ with non-profit organisations Cures
Within Reach, Mission: Cure, and the Pistoia Alliance (which
represents 14 of the top 20 global pharmaceutical companies),
life sciences and technology companies including Ariel
Precision Medicine, and academia including Cincinnati
Children’s Hospital Medical Center and University of
Northern Iowa.
The datathon leveraged Elsevier’s expertise, with Entellect
as the underpinning AI platform. They combined data from
Elsevier’s Life Sciences products (including Reaxys) and third
party external data from Open Targets, including data scientists
and researchers from the participating organisations.
After 60 days of intense work, the datathon revealed four
drugs that could potentially be repurposed to treat chronic
pancreatitis. These drugs were validated by independent
experts and will now be taken for clinical testing.
We are enthusiastic about
the discoveries made in the
Elsevier-Pistoia Alliance
datathon. The problem-
solving and teamwork
focused on chronic
pancreatitis were inspiring.
We look forward to taking
the promising candidates
to the next step where we
hope they will help us find
effective treatments for
this difficult, rare disease.
The datathon exceeded our
expectations, producing four
repurposing candidates to
address multiple chronic
pancreatitis targets.
Megan Golden
co-founder and co-director,
Mission: Cure
RELX Annual report and financial statements 2019 | Overview RELX Annual report and financial statements 2019
9
10m
financial transactions
processed every day
using machine learning
capabilities from
LexisNexis Risk
Solutions’ HPCC Systems
DataSeers is based in
Atlanta, Georgia
Managing complex financial data quickly and efficiently
with HPCC Systems
DataSeers is a Georgia-based company that was created
in 2017 and provides a reconciliation, analytics and fraud-
prevention engine (FinanSeer) for the financial services space.
The DataSeers platform is comprised of four modules, one of
which is ReconSeer – a rule-based engine that oversees
reconciliation of millions of prepaid cards and accounts at
unprecedented speeds, helping make monetary decisions in
a fast and efficient manner.
The global market for prepaid cards is expected to reach
$3,600bn by 2022. Much of this growth is fuelled by the
rising need for financial inclusion of unbanked consumers,
increasing volumes of online transactions, and the demand
for cost-effective payment solutions. The industry continues
to be plagued with problems when it comes to back office
data management.
Prepaid cards generate a tremendous amount of data that need
to be linked and analysed quickly. Companies must replicate
data within multiple systems which can create trust issues.
DataSeers needed a big data partner that could handle what it
termed the 4V big data conundrum – volume, velocity, variety,
and veracity. DataSeers decided to leverage the robust
capabilities of LexisNexis Risk Solutions’ HPCC Systems to
create a machine learning-based approach to managing
financial data.
Typically it takes hours to reconcile records, but with ReconSeer,
millions of records on various platforms can be reconciled within
seconds, enabling clients to make smarter decisions faster than
ever before. The system identifies fraud and compliance issues
using machine learning capabilities from HPCC Systems, which
is important since FinTech companies have very little to no time
to react to these transactions. Ultimately, this helps increase
trust in the use of prepaid cards and helps prevent fraud and
money laundering.
Our choice of HPCC
Systems as a core
technology has allowed us
to reduce our integration
time to customers and
provide results back in
a timeline that was not
possible before. A great
partnership with LexisNexis
Risk Solutions around Know
Your Customer and Know
Your Business helps us even
further, and we can now
provide a completely unified
experience from onboarding
to account closure all on a
single platform.
Adwait Joshi
CEO and founder,
DataSeers
OverviewFinancial statements and other informationGovernanceFinancial reviewCorporate ResponsibilityMarket segments 10
RELX Annual report and financial statements 2019 | Market segments
11
Market segments
In this section
12 Scientific, Technical & Medical
18 Risk & Business Analytics
24 Legal
30 Exhibitions
RELX Annual report and financial statements 2019 Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 12
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 and nurses improve the lives of
patients, providing insight to find the right
clinical answers.
§§ We enhance the quality of scientific research
output by organising the review, editing and
dissemination of 18% of the world’s scientific
articles
§§ ScienceDirect, the world’s largest platform
dedicated to peer-reviewed primary scientific
and medical research, hosts over 17m pieces
of content including from over 40,000 e-books
and has over 17m monthly unique visitors
§§ Scopus is a leading source-neutral abstract
and citation database of research literature,
with over 76m records across 25,000 journals,
sourced from more than 5,000 publishers
§§ SciVal offers insights into the research
performance of over 16,000 research
institutions
§§ ClinicalKey, the flagship clinical reference
platform, is accessed in around 100 countries
and territories, and by over 1,900 institutions
in North America alone
§§ Elsevier journals have at some point featured
articles by 195 of 196 science and economics
Nobel Prize winners since 2000
Business overview
Scientific, Technical & Medical provides information and analytics
that help institutions and professionals progress science, advance
healthcare and improve performance.
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, Beijing, Chennai, Delhi, Singapore and
Tokyo in Asia Pacific and Rio de Janeiro in South America. It has
8,100 employees and serves customers in over 180 countries.
Revenues for the year ended 31 December 2019 were £2,637m,
compared with £2,538m in 2018 and £2,473m in 2017. In 2019, 45%
of revenue came from North America, 24% from Europe and the
remaining 31% from the rest of the world. Subscription sales
generated 75% of revenue, transactional sales 23% and
advertising 2%.
Elsevier serves the needs of scientific, technical and medical
markets by organising the review, editing and dissemination of
primary research, reference and professional education content.
Growing from its roots in publishing, Elsevier is creating analytical
solutions to serve the needs of science and health, applying
technology to authoritative information, providing tools that
enable faster and more efficient ways of working, freeing up users
to focus on their goals.
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.
Elsevier services fall into four market categories: Primary
Research, Databases & Tools, Reference and Pharma Promotion.
Primary Research accounts for around half of revenues. Elsevier
serves the global scientific research community, publishing over
496,000 articles in 2019, 60% more than a decade ago. 2019 saw
continued strong growth both in article submissions and usage,
with over 2m articles submitted and 1bn articles consumed by
researchers. In 2019, Elsevier published over 49,000 gold open
access articles, a double-digit growth on the previous year,
making it one of the largest open access publishers in the world.
Elsevier’s portfolio of 2,500 journals is managed by more than
22,000 editors and many of its journals are the foremost
publications in their field. They include flagship titles such as Cell
and The Lancet family of journals. Elsevier’s article output accounts
for 18% of global research output while garnering a 26% share of
citations, demonstrating Elsevier’s commitment to delivering
research quality significantly ahead of the industry average.
In 2019, Elsevier launched six new subscription and 100 full open
access journals, including Physics Open , Cell Press’ Patterns and
JACC: Case Reports.
Research content is distributed and accessed via ScienceDirect,
the world’s largest platform dedicated to peer-reviewed primary
scientific and medical research. Elsevier continues to invest in and
deploy advanced Machine Learning (ML) and Artificial Intelligence
(AI) capabilities to help power personalised article recommenders
on ScienceDirect, suggesting new knowledge to ScienceDirect
readers to expand the scope of their search and discovery.
RELX Annual report and financial statements 2019 | Market segments RELX Annual report and financial statements 2019 | Scientific, Technical & Medical
13
In Databases & Tools, Elsevier offers a suite of products for
academic and corporate researchers. Significant products
include Scopus, Reaxys and ClinicalKey. Scopus is a source-
neutral abstract and citation database curated by independent
subject matter experts with over 76m records across 25,000
journals, sourced from more than 5,000 publishers. It places
powerful discovery and analytics tools in the hands of
researchers, librarians, institutional research managers and
funders. Reaxys is a chemistry research and education database
with chemical substance, properties, reaction and medicinal
chemistry data for both bench chemists and data scientists
supporting drug discovery and chemical R&D in industries such
as pharmaceuticals, chemicals and academic & government.
Elsevier serves academic and government research
administrators and leaders through its Research Intelligence suite
of products. SciVal is a decision tool that helps institutions to
establish, execute and evaluate research strategies by leveraging
bibliometric data from Scopus and other data types such as patent
citations and usage data. Elsevier expanded its leadership position
in research institution benchmarking analytics through further
investment in its SciVal Topic Prominence in Science. Big data
technology takes into consideration nearly all of the articles
available in Scopus since 1996 and clusters them into nearly 96,000
global, unique research topics based on citations patterns. In 2019,
we launched new functionality in SciVal to help customers analyse
research done on the UN Sustainable Development Goals.
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, including over 500 clinical overviews that provide
quick clinical answers and summaries; over 4.2m images and
58,000 medical and surgical videos in a single, fully integrated site.
ClinicalKey is accessed in around 100 countries and territories,
and by over 1,900 institutions in North America alone. Elsevier has
developed a Healthcare Knowledge Graph, which utilises ML and
Natural Language Processing (NLP) to knit together its collection
of the world’s foremost clinical knowledge. The Healthcare
Knowledge Graph enhances ClincialKey, the portal into Elsevier’s
vast medical content library by providing more timely clinical
results for users.
In medical education, Elsevier serves students of medicine,
nursing and allied health professions in multiple formats
including electronic books and electronic solutions. For example
Sherpath, an adaptive teaching and learning solution for nursing
and health education, now provides highly focused, personalised
and adaptive learning paths at over 400 institutions, supporting
more than 50,000 enrolments.
For healthcare professionals, Elsevier’s clinical solutions include
Interactive Patient Education and Care Planning. Elsevier’s
ClinicalPath (formerly Via Oncology) provides clinical pathways
delivering personalised, evidence-based oncology guidance at the
point of care. Elsevier’s analytics capabilities in oncology support
our ClinicalPath customers in answering increasingly complex
questions around the delivery of cancer care, such as appropriate
use of precision oncology and treatment adherence.
In commercial healthcare, consumer, provider and medical claims
data is used to deliver leading identity, fraud, compliance and
health risk analytics solutions for payers, providers, pharmacies
and life sciences organisations.
In Reference, Elsevier is a global leader in providing authoritative
and current professional reference content to scientific, technical
and medical reference markets. Flagship titles include Gray’s
Anatomy, Nelson’s Pediatrics and Netter’s Atlas of Human
Anatomy. Reference content is delivered in both electronic and
print formats, with print reference now accounting for less than
10% of Elsevier revenues.
Science that inspires: premier life sciences
journal with the highest impact factor in
biochemistry and molecular biology
An innovative research management
and social collaboration platform
The world’s largest platform dedicated to
peer-reviewed primary scientific and
medical research
Combines leading reference and evidence based
medical content into its fully integrated clinical
insight engine specialised for doctors, nurses,
or pharmacists
CiteScore™ metrics are a set of
comprehensive, transparent, current and
free metrics to help measure the citation
impact of journals
Chemistry research and education database
with chemical substance, properties, reaction
and medicinal chemistry data for both bench
chemists and data scientists supporting drug
discovery and chemical R&D
Ready-to-use tools to analyse the world of
research, and establish, execute and evaluate
the best strategies for research organisations
A leader in scientific publication workflow
solutions used by journals, books and other
publications for manuscript submission, peer
review, production tracking and e-commerce
A leading source-neutral abstract and citation
database of peer-reviewed literature
featuring smart tools to track, analyse and
visualise research
Science for better lives: one of the world’s
leading medical journals since 1823
Designed to help improve patient outcomes,
ClinicalPath provides clinical pathways
delivering personalised, evidence-based
guidance at the point of care
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 14
Pharma Promotion offers customised commercial marketing
services to pharmaceutical and medical device companies,
building on Elsevier’s trusted global content brands to connect
and engage with doctors, nurses and other healthcare
professionals who are influential decision makers.
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 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 improved
productivity and outcomes for customers; and continue to drive
operational efficiency and effectiveness.
In the primary research market, Elsevier aims to deliver journal
and article quality above the industry average at below average
cost, leveraging the scale of its platform. We work directly with
our customers to understand their objectives and help them reach
their research goals in a way that is satisfactory from a content,
service and economic perspective. Elsevier looks to enhance
quality by building on its premium brands and grow article volume
through new journal launches, the expansion of open access
journals and growth from emerging markets; and add value to
core platforms by implementing capabilities such as advanced
recommendations on ScienceDirect and social collaboration
through reference manager and collaboration tool Mendeley.
In reference markets, Elsevier’s priorities are to expand content
coverage and ensure consistent and seamless linking of content
assets across products.
In every market, Elsevier is applying advanced ML and NLP
techniques to help researchers, engineers and clinicians perform
their work better. For example, in research, ScienceDirect Topics,
a free layer of content that enhances the user experience, uses ML
and NLP techniques to classify scientific content and organise it
thematically, enabling users to get faster access to relevant results
and related scientific topics. The feature, launched in 2017, is
proving popular, generating 15% of monthly unique visitors to
ScienceDirect via a topic page. Elsevier also applies advanced
ML techniques that detect trending topics per domain, helping
researchers make more informed decisions about 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.
Similarly, in health, Elsevier is developing clinical decision support
applications utilising cognitive technologies to map patient and
claims data sets, and large image and text content repositories.
These applications embedded in technology platforms will
enhance the delivery of the right content, in the right care setting,
to the right care providers. This will help health professionals
perform their work better, make more accurate diagnoses,
ensure appropriate care delivery, and save more human lives.
In 2019, Elsevier acquired Parity Computing Inc., further
strengthening capabilities in AI to provide high-accuracy entity
resolution, profiling and recommendations for scientific, technical
& medical content and applications. Elsevier also acquired
3D4Medical, an anatomy education business headquartered in
Dublin, Ireland. A recipient of the Apple Design & Innovation
Award, 3D4Medical brings world class 3D technology to enhance
Elsevier’s leading medical content and education offerings.
Business model, distribution channels and competition
In Primary Research, 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 health institutions,
individual practitioners and medical society members.
While paid subscriptions continue to be the primary distribution
model, alternative payment models for the dissemination of
research have evolved over the past 20 years. Elsevier has long
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
REVENUE BY TYPE
£2,637m
Print 16%
£2,637m
Rest of
world
31%
Advertising
2%
£2,637m
Transactional
23%
North
America
45%
Electronic
84%
Europe
24%
Subscription
75%
RELX Annual report and financial statements 2019 | Market segments RELX Annual report and financial statements 2019 | Scientific, Technical & Medical
15
invested in all business models to support the preferences of
authors and research institutions. Author pays open access is one
example, with over 1,900 of Elsevier’s journals now offering the
option of funding publication and distribution via a sponsored
article fee. In addition, Elsevier now publishes over 370 full open
access titles.
For well over a decade, content has been provided for free or at very
low cost in more than 100 countries and territories in the developing
world through Research4Life, a United Nations partnership
initiative. For some journals, advertising and promotional income
represents a small proportion of revenues, predominantly from
pharmaceutical companies in healthcare titles.
Next to journals, Elsevier has also invested in other solutions to
serve the needs of the research community. SSRN 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 through an open research data repository, while
Digital Commons 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 facilitate the sales and administrative
process for remaining print journal sales. Reference and
educational content is sold directly to institutions and individuals
and accessed on Elsevier platforms, while printed books are
sold through retailers, wholesalers and directly to end users.
Competition within science and medical reference content is
generally on a title-by-title and product-by-product basis and
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.
2019 financial performance
Revenue
Adjusted operating profit
2019
£m
2,637
982
2018
£m
2,538
942
Underlying
growth
+2%
+3%
Portfolio
changes
-1%
-1%
Currency
effects
+3%
+2%
Total
growth
+4%
+4%
Key business trends remained positive in 2019, with underlying
revenue growth in line with the prior year.
journals, saw its growth rate in articles submitted and published
accelerate further as we continue to gain market share.
Underlying revenue growth was +2%. The reported revenue growth
rate of +4% benefited from the strength of the US dollar versus
sterling, with the difference between constant currency and
underlying growth rates reflecting the impact of portfolio changes.
Underlying adjusted operating profit growth was +3%, slightly
ahead of underlying revenue growth.
Databases & tools continued to drive growth across our market
segments through content development and enhanced machine
learning and natural language processing based functionality.
Print book revenues were down in a market that declined in line
with historical trends, and print pharma promotion revenues
continued to decline.
Electronic revenues saw continued good growth, partially offset
by 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.
The number of article submissions to our subscription journals
continued to grow strongly. Our open access publishing
programme, which now includes over 370 dedicated open access
In 2019 we made three small acquisitions, including 3D4Medical,
a provider of advanced 3D anatomy solutions, and disposed of
minor print assets.
2020 outlook
Our customer environment remains largely unchanged from
recent years, and we expect another year of modest underlying
revenue growth, with underlying operating profit growth
exceeding underlying revenue growth.
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
Underlying growth +2%
2,538
2,637
Underlying growth +3%
942
982
2018
2019
2018
2019
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 16
Pure:
Building a scholarly
reporting system
to capture university
success
1000
number of faculty days saved annually by using CityU
Scholars based on Pure to maintain a comprehensive
and up-to-date overview of research production data
across CityU.
RELX Annual report and financial statements 2019 | Market segments RELX Annual report and financial statements 2019 | Scientific, Technical & Medical
17
Working with Elsevier, we
were able to create a solution
that shows CityU’s research
outputs most comprehensively,
showcasing its true academic
performance. The success of
CityU Scholars, powered by
Elsevier’s Pure, stems from
its data accuracy, ease of use,
and the benefits it creates for
all CityU stakeholders.
Christian Wagner
CIO and Associate Provost
of Quality Assurance,
City University of Hong Kong
City University of Hong Kong
(CityU) is a publicly funded
university in Hong Kong.
CityU produces world-class research and is a leading
provider of professional education. CityU is ranked No.
126 globally by Times Higher Education and No. 52 by
Quacquarelli Symonds (2020 rankings).
CityU is a young university. In 2015, CityU’s management
realised a need for data on its research productivity
and accomplishments to build reputation, deliver
impact data for government reporting, and provide
insights during faculty career advancement reviews.
However, CityU’s management realised its records
for academic faculty and department productivity,
including field weighted citation counts, H-indices
and awarded grants were out of sync with actual
performance. Were CityU faculty under-reporting
their accomplishments? Was performance data ‘lost’
somewhere in the reporting chain? How could they see
the rate of impact between their research inputs, for
example funding and time of staff, and their academic
outputs such as research impact measures?
CityU embarked on an effort to implement CityU
Scholars, a performance system for academic
achievement based on Elsevier’s Pure, a research
information system that can import data from over 20
sources of publications, awarded research grants and
research data sets. The 18 month effort, which began
in 2016, consisted of configuring the Pure system
towards CityU’s specific reporting interests, refining
performance records during a complete review of
CityU researcher identities and their outputs.
Every researcher received an Open Researcher
and Contributor ID (ORCID), and CityU worked with
Elsevier to consolidate multiple researcher profiles.
In addition, all CityU researchers and their publications
were reviewed to ensure they were properly attributed
to CityU within Elsevier’s Scopus database and not
to other universities in Hong Kong. This was also
important to the university’s reputation development,
since Scopus data is the underlying source of
bibliometric data feeding into major global university
rankings, such as the Times Higher Education
University Rankings and Quacquarelli Symonds (QS)
world university rankings.
Ongoing cleaning and capturing of publication data in
CityU Scholars, powered by Elsevier Pure, ensured the
accuracy of CityU’s academic performance data. With
this increased accuracy, the launch of CityU Scholars
in mid-2017 raised average faculty publication counts
by 21, citation counts by 580, and h-indices by 3.5.
About Pure
Elsevier’s Pure is a
performance capture and
reporting portal.
Connected to many data
sources including Elsevier’s
data feeds, Pure updates
faculty performance records
in real time, enabling accurate
performance reporting and
easy maintenance of faculty
expertise web profiles and
personalised CVs. Pure can
report individual researcher
data or the performance data
of research teams, academic
units, and the university.
Pure reveals university
research networks and
promotes collaboration
between universities.
City University of
Hong Kong (CityU)
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 18
Risk & Business Analytics
We combine data and analytics with deep
industry expertise to help customers make
better decisions and manage risk. We deliver
insight to insurance companies and help detect
and prevent online fraud and money laundering.
We provide digital tools that help airlines and
farmers improve their operations.
§ 85% of new US auto insurance policies issued to
consumers in 2019 benefited from our products
§ We do business with 95 out of the top 100
personal lines insurance companies; 78%
of the Fortune 500; and seven of the world’s
top ten banks
§ The LexisNexis Digital Identity Network
analyses more than 100m transactions daily,
or over 38bn transactions annually. Every week,
activities on more than 70,000 websites are
captured and analysed within the LexisNexis
Digital Identity Network
§ Accuity has information on nearly 22,000 banks,
and hosts over 700,000 documents in its Bankers
Almanac data set. Over 95 of the world’s largest
100 banks use its data
§ Cirium tracks over 100,000 commercial flights
every day, monitors 90m passenger itineraries
a year, analyses over 2.5bn travel segments per
annum worth about $380bn and holds up to 300
datapoints on every commercial aircraft
§ ICIS enables trading in the energy and chemicals
sectors, providing pricing intelligence to over
130 markets. 90% of the world’s top 20 chemical
companies use its data
§ The Homestead Exemption Fraud Detection
Solution helped six Florida counties uncover
more than $16m in new tax revenue in 2019
and place over $140m back on tax rolls
Business overview
Risk & Business Analytics provides customers with information-
based analytics and decision tools that combine public and
industry-specific content with advanced technology and
algorithms to assist them in evaluating and predicting risk and
enhancing operational efficiency.
Risk & Business Analytics, headquartered in Alpharetta, Georgia,
has principal operations in California, Florida, Illinois, New York
and Ohio in North America as well as London and Paris in Europe
and Beijing and Singapore in Asia Pacific. It has about 9,100
employees and serves customers in more than 170 countries.
Revenues for the year ended 31 December 2019 were £2,316m,
compared with £2,117m in 2018 and £2,073m in 2017. In 2019,
79% of revenue came from North America, 14% from Europe and
the remaining 7% from the rest of the world. Subscription sales
generated 37% of revenues, transactional sales 62% and
advertising 1%.
Risk & Business Analytics comprises the following market-facing
industry/sector groups: Insurance Solutions, Business Services,
Data Services (including banking, energy and chemicals, aviation,
agriculture and human resources) and Government Solutions.
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 insureds directly into the insurance work stream
for 89% of the insurance auto market and LexisNexis Current
Carrier, which identifies insurance coverage details and any
lapses in coverage.
The focus is 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. Insurance Solutions is advancing
its strategy to drive more consistency and efficiency in claims
through its solution suite, Claims Compass, with Claims Datafill
providing data and decisions at first notice of loss and throughout
the claim life cycle. Risk Classifier solution, which uses public and
motor vehicle records and predictive modelling, is used by around
a quarter of the top 50 life insurers to better understand risk and
improve underwriting efficiency.
Insurance Solutions continues to make progress outside the US.
In the UK, contributory solutions including No Claims Discount
module, which automates verification of claims history and Policy
Insights, a predictor of motor claims loss, are delivered through
the LexisNexis Informed Quotes platform to provide real-time
data in the quoting process. In China, Genilex is delivering key
vehicle data to auto insurers and is looking to add more analytics
solutions. In Brazil, Insurance Solutions is delivering telematics
solutions, data and analytics to help motor insurers in underwriting.
RELX Annual report and financial statements 2019 | Market segments RELX Annual report and financial statements 2019 | Risk & Business Analytics
19
Business Services enables global financial transparency and
inclusion by providing holistic and actionable insights for all risk
and compliance segments. We address some of the greatest
challenges facing financial institutions, small businesses and
e-commerce today, including identity theft, financial inclusion,
cybercrime, bribery and corruption, trafficking, economic
sanctions, global terrorism, and abusive practices. We leverage
machine learning (ML) and artificial intelligence (AI) in our
solutions to provide our customers greater insights, enabling
faster decisions with a greater degree of confidence.
The growth strategy for Business Services is primarily
driven by maximising penetration in our current markets
across our customers’ workflow and through deeper
international expansion.
In 2018, LexisNexis Risk Solutions added digital identity capability
as a natural complement to its existing robust physical identity
suite through the acquisition of ThreatMetrix. As a result, our
customers gained access to solutions that provide a physical,
digital, device and behavioural view into an identity. This
perspective helps customers make decisions that thwart bad
actors while enabling legitimate consumers to transact more
securely and seamlessly.
The ThreatMetrix integration was completed in November 2019,
creating a combined go-to-market organisation that consists of
global sales and marketing teams; combining our physical and
digital identity solutions into a holistic fraud prevention and
identity management solution; and expanding the Digital Identity
Network into new use cases and markets.
Data Services provides indispensable business information, data,
software and analytics solutions to professionals in many of the
world’s biggest industries. Our brands include: Accuity, a provider
of services and technology solutions to financial, corporate and
government sectors focused on financial crime screening,
payment services and counterparty Know Your Customer (KYC),
and benefits eligibility; ICIS, an independent intelligence and
services provider for global petrochemical and energy markets;
Cirium, an aviation and air travel data and analytics company for
the wider travel industry; Proagrica, a provider of connectivity
solutions, workflow tools and actionable insight for the global
agriculture and animal health segment; XpertHR, a compliance
and benchmarking business driving global HR topics from pay
equality to compliance and HR policies; EG, which delivers data
analytics, decision tools and high-value analysis and news for the
UK’s commercial real estate segment; and Nextens, a provider of
workflow solutions, content and analytics for tax professionals.
Data Services has continued to reshape its portfolio, exiting areas
not core to its strategy, divesting the publishing and events
business (FlightGlobal) of Cirium during 2019 and Farmers Weekly
early in 2020.
Government Solutions provides a variety of identity assessment,
fraud detection and prevention, collections and recovery, data
quality management, due diligence, regulatory compliance, and
Risk Intelligence Network
World Compliance
The Risk Intelligence Network provides
government agencies with the first step of
identity assessment across a number of
services including benefits applications, claims
filing and tax return filing. With a powerful
combination of contributory systems and
analytics, emerging threats can be identified
before they have a significant impact
Our curated content related to economic
sanctions, financial crime enforcement
actions, politically exposed persons (PEPs),
and adverse media enables customers to
comprehensively and efficiently protect their
enterprises from reputational, regulatory,
legal and enforcement risks
LexisNexis Active Insights
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
Leading provider of trusted and accurate data
and analytics that transform how payments and
compliance professionals manage accounts and
transactions with confidence across the global
financial ecosystem
Risk Defense Platform
A 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
Claims Compass
Accurint® Virtual Crime Center
LexisNexis® Digital Identity Network®
Data analytics suite with LexisNexis Claims
Datafill and LexisNexis Police Records that
improves the claims process from first notice
of loss, triage, investigation and resolution
through recovery
Policing platform used for analytics, crime
analysis and investigations linking public
records to national law enforcement data
for a complete picture across jurisdictions
A network that provides insight into true
digital identity, by analysing global shared
intelligence across more than 38bn annual
transactions to distinguish legitimate
consumers versus fraudsters
Aviation and air travel data and analytics
for the world’s airlines, airports, aircraft
finance, manufacturers, tech giants and
travel companies
Global source of Independent Commodity
Intelligence Services, connecting data, markets
and customers to create a comprehensive,
trusted view of global commodities markets
A global agricultural network, empowering
customers to be better connected, to make
more informed decisions, driving better
decisions from seed, to field, to fork
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 20
criminal investigation and analysis solutions to US federal, state
and local and government agencies. These solutions assist health
and human services agencies in verifying the identity of, and
delivering access for, those in need of public programmes and
benefits. We help tax and regulatory agencies verify identities and
confirm businesses and assets within the workflow of automated
enterprise systems. Our data sharing solutions help public safety
agencies find missing children and solve criminal investigations.
Our solutions prevent fraud in government programmes,
recapture lost revenue, keep communities safe and further
national security initiatives.
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; 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, aviation and human resources sectors.
Within Business Services, growth opportunities are spurred
by evolving fraud schemes resulting in mounting fraud losses,
anti-money laundering fines, sanctions, anti-bribery and
corruption enforcement, consumer and business credit
expansion, and heightened regulatory scrutiny. Demand for
compliance solutions in banking and financial services markets
includes cross-border payments and trade finance levels. In
collections, demand is driven mainly by the ongoing escalation of
consumer debt and the prospect of recovering that debt.
Expansion of mobile and digital use cases will continue driving
opportunity for solutions that incorporate global data and drive
efficiency in risk decision making. Increased regional and country-
level demand for data consortia and compliance utilities is also
expected to continue.
The increasing demand for our contributory solutions and
enriched data to combat criminal activity and deliver better
access to services for citizens and businesses is driving growth in
government markets. It is about secure, near frictionless service
through a multi-layered approach. The level and timing of demand
in this market is influenced by government funding and revenue
considerations.
In the insurance segment, growth is supported by increasing
transactional activity in the auto, commercial 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 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.
Growth in the global energy and chemicals markets is led by
changing trade patterns, a drive to embrace sustainability and
demand for more sophisticated supply chain solutions. Aviation
information markets are being driven by increases in air traffic
and the number of aircraft transactions and the digital
transformation of the airline industry. Growth in agriculture
markets is being driven by adoption of technology and data
solutions plus increasing supply chain connectivity.
This activity is stimulated by competition among insurance
companies, high levels of carrier advertising and rising levels
of internet quoting and policy binding. We continue to expand our
services to make it easier for the consumer to transact with an
insurer throughout the insurance process. We are developing
solutions that bridge insurers and automakers, utilising
connectivity as a means to leverage and monetise the data from
Advanced Driver Assistance Systems and connected cars, and
engage consumers with driving behaviour information, collision
detection and other insurance-related services. Our relationships
with automakers, currently representing more than 25% of new
car sales in the US market, and ability to provide insights to
insurers in their workflows make this possible.
Strategic priorities
Our strategic goal is to help businesses and governments achieve
better outcomes with information and decision support through
better insight into the risks and opportunities associated with
individuals, other businesses, transactions and regulations. By
providing high 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, continuing
to strengthen our content, technology and analytical capabilities
and investing in sales and marketing.
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
REVENUE BY TYPE
£2,316m
Face-to-
face 1%
Print
1%
£2,316m
Europe
14%
Rest of world
7%
£2,316m
Advertising
1%
Subscription
37%
Electronic
98%
North
America
79%
Transactional
62%
RELX Annual report and financial statements 2019 | Market segments RELX Annual report and financial statements 2019 | Risk & Business Analytics
21
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 the Business
Services and Government Solutions segment include the major
credit bureaus, which in many cases address various capabilities
within each solution offering.
Data Services competes with a number of information providers
on a service and title-by-title basis including S&P Global Platts,
Thomson Reuters and IHS Markit as well as a number of niche and
privately owned competitors.
Risk & Business Analytics has been developing AI and ML
techniques for a number of years to generate the actionable
insights that help our customers to make accurate, better
informed and more timely decisions. The successful deployment
of AI and ML techniques starts with a deep understanding of
customer needs and leverages the breadth and depth of our data
sets, coupled with the expertise and domain knowledge to discern
which AI/ML algorithm to use, in what context, to solve our
customers’ business problems most effectively.
Business model, distribution channels and competition
Our products are mainly sold directly, typically on a subscription
or transactional basis. Pricing is predominantly on a transactional
basis in the Insurance and Business Services segments, and
primarily on a subscription basis in Data Services and Government.
2019 financial performance
Revenue
Adjusted operating profit
2019
£m
2,316
853
2018
£m
2,117
776
Underlying
growth
+7%
+8%
Portfolio
changes
-2%
-3%
Currency
effects
+4%
+5%
Total
growth
+9%
+10%
Strong underlying revenue growth continued in 2019.
Underlying revenue growth was +7%. The reported revenue
growth rate of +9% benefited from the strength of the US dollar
versus sterling, with the difference between constant currency
and underlying growth reflecting the impact of portfolio changes.
Underlying adjusted operating profit growth of +8% was slightly
ahead of underlying revenue growth and in line with the prior year.
In Insurance, we continued to drive growth through the roll-out
of enhanced analytics, the extension of data sets, and by further
expansion in adjacent verticals. The US market environment for
the year as a whole was less supportive than in the prior year,
but improved gradually throughout 2019. 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
continued to drive growth. The US and international market
environment was in line with historic trends for the year as a
whole after a brief period of variability at the beginning of the year.
In Data Services, organic development of innovative new
products and expansion of the range of decision tools drove
strong growth in all key market verticals. In Government, we
continued to drive customer value through the introduction of
sophisticated analytics.
In 2019 we made two small acquisitions and disposed of minor
print assets. Since the year end we have completed the
acquisition of ID Analytics, a provider of credit and fraud risk
solutions, and agreed to acquire Emailage, a provider of email
based fraud prevention solutions.
2020 outlook
The fundamental growth drivers of Risk & Business Analytics
remain strong, in line with recent years, and we expect
underlying operating profit growth to continue to broadly match
underlying revenue growth.
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
Underlying growth +7%
2,117
2,316
Underlying growth +8%
776
853
2018
2019
2018
2019
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 22
LexisNexis
Risk Solutions:
reducing customer friction
and stopping fraud for
Commercial Bank of Dubai
87%
decrease in managing the number of
Commercial Bank of Dubai’s policies
leading to improved efficiency and a
reduction in overall operating cost
RELX Annual report and financial statements 2019 | Market segments RELX Annual report and financial statements 2019 | Risk & Business Analytics
23
Moving from static business
rules to more dynamic
rules with LexisNexis Risk
Solutions means we have
developed a trusted area
for customer transactions.
This incorporates rolling
windows of time and
averages per user so that
when there is a significant
change to that behaviour, we
see it in real time.
Vinay Sugunanandan
Head of Fraud Risk
Management
Commercial Bank of Dubai
Headquartered in Deira, Dubai,
the Commercial Bank of Dubai
(CBD) is one of the largest
banking and financial services
corporations in the United Arab
Emirates, offering a full range of
financial products and services .
Simplicity and innovation lie at the heart of CBD’s core
values. Championing these values in a climate of rising
fraud, a diverse user base and a huge proliferation
in online interactions has created a number of key
challenges. CBD wanted to offer customers banking
freedom through a market-leading mobile banking
app that provided users with a creative, easy, fun and
personalised interaction while striving to make the
online banking experience as frictionless as possible.
The most effective way to tackle complex, global
cybercrime is using the power of a global shared
network. The LexisNexis Digital Identity Network
collects and processes global shared intelligence
from millions of daily consumer interactions including
logins, payments, and new account applications. Using
this intelligence, CBD is now able to better distinguish
between trusted customer behaviour and potential
fraud, reducing false positives and improving genuine
fraud detection.
Using Digital Identity Network helped CBD to make an
end-to-end decision flow so that intelligence built in
one channel or event can be used throughout the
customer journey. In addition, CBD reduced step-up
verification significantly which resulted in an increase
in the number of trusted customer transactions,
thereby streamlining the user experience.
About LexisNexis
Digital Identity
Network
LexisNexis Risk Solutions
leverages global digital and
physical identity intelligence,
machine learning and
advanced big data analytics to
accelerate risk management
decisions and fortify fraud
defences for businesses across
the globe. Our solutions
combine powerful LexisNexis
Risk Solutions technology and
intuitive analytics with around
95 billion data records
augmented by the digital
identity coverage of the
LexisNexis Digital Identity
Network to deliver a physical,
digital, device and behavioural
view into an identity at any point
in the customer life cycle.
LexisNexis Risk Solutions
provides robust, actionable
risk insights, enabling secure
and seamless transactions
while limiting friction
intelligently across every
channel via a multi-layered
approach.
View across the marina,
Dubai , UAE
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 24
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 advance the
Rule of Law across the world.
§ The LexisNexis legal and news database
contains 119bn documents and records
§ 1.3m new legal documents are added daily to
the database from 69,000 sources, generating
70bn connections. In all, 28m legal documents
are processed daily
§ Nexis news and business content includes
40,000 premium sources in 33 languages,
covering more than 150 countries. It has data
including 350m company profiles with a content
archive that dates back 40 years
§ The LexisNexis database includes 250m court
dockets and documents, more than 132m
patent documents, 2.5m State Trial Orders, and
1.3m Jury verdict and settlement documents
§ PatentSight’s database includes objective
ratings of the innovative strength (Patent Asset
Index) of more than 97m patent documents
from more than 80 countries
§ In 2019, Law360 produced over 50,000 news
and analysis articles
§ Legal analytics tool Lex Machina has
normalised over 47m counsel mentions and
29m party mentions since 2016
§ LexisNexis is committed to advancing the Rule
of Law through operations and solutions that
provide transparency into the law in more than
150 countries
Business overview
Legal provides legal, regulatory and business information and
analytics that help customers increase their productivity, improve
decision-making and achieve better outcomes.
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
150 countries.
Revenues for the year ended 31 December 2019 were £1,652m,
compared with £1,618m in 2018 and £1,686m in 2017. In 2019, 67%
of revenue came from North America, 21% from Europe and the
remaining 12% from the rest of the world. Subscription sales
generated 78% of revenue and transactional sales 22%.
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. Lexis Advance includes the leading
citation service, Shepard’s, which advises on the continuing
relevance of case law precedents. In North America, LexisNexis
also provides 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 2019, LexisNexis continued to enhance 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. Enabled by the New Lexis platform,
Lexis Advance allows customers within legal and professional
organisations to find relevant information more efficiently, helping
drive better outcomes.
LexisNexis continues to invest in and deploy advanced Machine
Learning (ML) and Artificial Intelligence (AI) capabilities that
help power Lexis Advance. In 2019, these technologies expanded
the capabilities of Lexis Answers, a service that semantically
understands a user query and provides a starting point answer
to legal research. Lexis Advance Answer Cards now include
summaries and analytics on judges and expert witnesses, as well
as supporting an extended array of question types.
In 2019, LexisNexis expanded the Lexis Advance legal product
ecosystem to ensure a more seamless user experience by
integrating Intelligize, an analytics solution for review and analysis
of SEC filings; CourtLink, a leading supplier of court docket
information in the United States; Lexis Advance Quicklaw, a
leading research solution in Canada; and Lexis Practice Advisor
Canada, a practical guidance solution for Canadian attorneys.
RELX Annual report and financial statements 2019 | Market segments 25
LexisNexis continued to expand the reach of its decision tools
and analytics. In 2019, LexisNexis further expanded the analytics
offering of Lex Machina with four new practice areas including
Environmental Litigation and Consumer Protection Litigation,
bringing the total to 16 active practice areas; Context, with new
analysis of Courts to complement Judge and Expert Witness
modules released late in 2018; and a suite of new offerings from
Intelligize, including M&A Market Analytics, No Action Letter,
and SEC Comment Letter Analytics.
LexisNexis expanded its strong position in analytics by also
introducing new tools to allow law firms to enrich and mine their
own data stores. Lexis Search Advantage was enhanced with
new ML and algorithmic capabilities for both for litigation and
transactional attorneys.
During 2019, LexisNexis also added three new modules for Lexis
Practice Advisor, the company’s practical guidance and ‘how to’
service, bringing the total to 20 practice area modules. The service
also launched Evolving Guidance, a joint offering with LexisNexis’
news solution Law 360, that offers early analysis of legal changes
that could impact businesses in rapidly developing areas such as
Employment Law.
include practice management solutions, case management,
and cost recovery 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.
In the UK, LexisNexis is a leading legal information provider
offering an extensive collection of primary and secondary
legislation, case law, expert commentary, practical guidance,
and current awareness. In 2019, LexisNexis continued to grow its
content sets and improve user functionality. In Legal, the company
re-platformed its market-leading LexisLibrary product, enabling
ongoing improvements to the customer experience. LexisNexis
UK also grew adoption of LexisPSL and introduced a range of
Brexit-related content and tools. Contract productivity and
proofreading tool LexisDraft, alongside the automation software
VisualFiles, has grown LexisNexis’ footprint in legal workflow
solutions. In Tax, LexisNexis continued to expand its reach, with
firms of all sizes leveraging TolleyLibrary and TolleyGuidance.
In July 2019, LexisNexis formed a joint venture with Knowable,
a ML enabled enterprise contracts intelligence platform. By
converting legal language into structured data, the solution
provides users with insight into their contracts, portfolio risks,
obligations and entitlements.
In France, LexisNexis’ main offering, Lexis360, is a leading
integrated solution combining legal information, in-depth analysis
with JurisClasseur content, and practical guidance. In 2019,
LexisNexis enhanced the Lexis360 solution by improving user
experience, content and product functionality.
In the Intellectual Property analytics space, LexisNexis
proprietary Patent Asset Index, created by PatentSight, is used by
corporations worldwide to manage and value their intellectual
property portfolios.
In Canada, LexisNexis enhanced Lexis Advance Quicklaw
through the continued integration of international content and
search enhancements.
LexisNexis also supplies Business of Law Software Solutions
to law firms and corporate legal departments. These solutions
In South Africa, LexisNexis introduced Lexis MetroIQ, a subscription
solution designed to assist South African municipalities in
maintaining an accurate and up-to-date property registry.
In Austria, Lexis SmartScan, a recently launched advanced legal
document analysis tool placed first in innovation at the Digital
Impuls Award.
In the Middle East, LexisNexis launched the new Lexis Middle
East platform, which features improved search relevancy and
product performance.
Premier citations service
LexisNexis enterprise contract
intelligence offering
LexisNexis North American Research
Solution’s practical guidance service
Litigation solution providing legal language
analytics on judges and expert witnesses
Provides analytics and benchmarking of
SEC filings to optimise compliance strategies
Flagship online legal research tool that
transforms the way legal professionals
conduct research
LexisNexis UK flagship legal
online product
Patent analytics solution that provides
insights into the strength, quality
and value of patent portfolios
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
RELX Annual report and financial statements 2019 | LegalMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 26
In the Pacific region, LexisNexis continued its focus on providing
authoritative local online content embedded in decision tools for
legal professionals. In 2019, LexisNexis enhanced Lexis Advance
Pacific by incorporating advanced data visualisation with the
introduction of Search Term Maps and released integrated search
results combining Lexis Advance and Practical Guidance content.
In Asia, LexisNexis successfully migrated all customers to the
new Lexis Advance platform, providing new functionalities and
an improved user experience to legal professionals across the
region. In 2019, Lexis Advance launched new AI and deep-learning
tools on the platform, such as Case Recommendation in Malaysia,
and won the Technology Excellence Awards for Online Services
– Legal in Hong Kong.
Supporting its Rule of Law mission, LexisNexis partnered with the
Office of the Attorney-General to launch the consolidated Laws
of Fiji online, the region’s first online version of the authorised
legislation. LexisNexis Australia is also an official partner in
a landmark inquiry led by the Australian Human Rights
Commissioner into the challenges to human rights and freedoms
presented by emerging technologies such as AI, social media,
and big data. As part of this partnership LexisNexis Pacific jointly
developed a Vietnamese language version of the Australian
Human Rights Commission’s RightsApp.
LexisNexis signed a partnership with the Maldives Family Legal
Clinic to provide plain language versions of domestic violence laws
to be disseminated to 200 islands across the Maldives. LexisNexis
also partnered with the East Malaysia Mobile Court Program and
participated in the Matanggal Village expedition in Sabah to help
adjudicate cases of statelessness.
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, along with decision support solutions 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; incorporating advanced
technologies including Machine Learning and Natural Language
Processing; driving long-term international growth; and
upgrading operational infrastructure, improving process
efficiency and gradually improving margins.
In the US, LexisNexis is focused on the ongoing development of
legal research and practice solutions that help lawyers make
data-driven decisions. Over the coming years, progressive
product introductions 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 development of additional practical
guidance and analytics tools. Additionally, LexisNexis is focusing
on the expansion of its activities in emerging markets.
LexisNexis is also continuing the mission of spreading equality,
transparency and access to legal remedies globally through the
recently formed LexisNexis Rule of Law Foundation, a non-profit
entity that provides financial and other support for projects that
aim to advance the Rule of Law around the world.
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
£1,652m
Print
15%
£1,652m
Rest of world
12%
Europe
21%
£1,652m
Transactional
22%
Electronic
85%
North
America
67%
Subscription
78%
RELX Annual report and financial statements 2019 | Market segments 27
2019 financial performance
Revenue
Adjusted operating profit
2019
£m
1,652
330
2018
£m
1,618
320
Underlying
growth
+2%
+8%
Portfolio
changes
-3%
-7%
Currency
effects
+3%
+2%
Total
growth
+2%
+3%
Underlying revenue growth in 2019 was in line with the
prior year.
Underlying revenue growth was +2%. The reported revenue
growth rate of +2% benefited from the strength of the US dollar
versus sterling, with the difference between the constant
currency and underlying growth rates reflecting the impact
of portfolio changes.
Underlying adjusted operating profit growth of +8% was ahead of
underlying revenue growth reflecting continued efficiency gains.
The increase in operating profit margin reflects ongoing process
improvements as the platform transition process comes to
an end.
The market environment for legal services, and for legal
information providers, remained stable. Electronic revenues
saw continued growth, partially offset by print declines.
The completion of the new platform roll-out has enabled the
continued release of broader data sets and further application
of machine learning and natural language processing
technologies that enhance our research products and market
leading analytics.
In 2019 we acquired a majority stake in Knowable, a US
contract analytics business, and disposed of a number of small
software assets.
2020 outlook
Trends in our major customer markets remain largely
unchanged, and we expect another year of modest underlying
revenue growth. We expect good underlying operating profit
growth to continue.
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
Underlying growth +2%
1,618
1,652
Underlying growth +8%
320
330
2018
2019
2018
2019
RELX Annual report and financial statements 2019 | LegalMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 28
LexisNexis
Practical Guidance:
helping specialist and
boutique law firms to grow
80%
time saved for Curlington Legal,
when conducting research for clients
using LexisNexis products
RELX Annual report and financial statements 2019 | Market segments Practical Guidance is
essential for my business.
It streamlines research and
information gathering and
helps me understand the
process; what’s meant to
happen and when. I’m able
to practise in areas I don’t
traditionally delve into.
David Sigler
Principal Lawyer,
Curlington Legal
29
David Sigler is the sole
practitioner at Curlington Legal,
a boutique law firm in the Sydney
Central Business District,
specialising in technology law.
While David has over 30 years’ experience in
technology law, he is often asked by clients for advice
on other aspects of their business. To offer a full
service for his clients, and scale his firm, David relies
on LexisNexis Practical Guidance to increase his
capability and provide expertise in less familiar
areas of law.
The highly practical workflow tools in Practical
Guidance provide David with a clear research road
map and access to relevant points of law to guide him
in areas where he has less extensive experience.
Over the last year, David has used resources from
Practical Guidance to act on several matters which he
would normally hand over to a specialist practitioner.
He estimates that Practical Guidance has helped him
generate additional fees of AU$50,000 in the last
12 months alone.
To conduct deeper research, David takes advantage of
Practical Guidance as a gateway to the extensive world
class research available on Lexis Advance. Premium
Australian legal publications including CaseBase Case
Citator, LawNow Plus, Halsbury’s Laws of Australia
and the Australian Encyclopaedia of Forms &
Precedents form part of David’s powerful Lexis
Advance library.
This has transformed the way David conducts legal
research, allowing him to provide confident advice
in broader areas of law, helping Curlington Law to
diversify and scale.
About Lexis Advance
Lexis Advance in Australia
is an innovative online
research platform.
Via a single sign on and
cutting-edge search
technology, the platform
provides centralised access to
LexisNexis’ extensive range of
trusted legal publications. This
includes LexisNexis Practical
Guidance, a powerful online
solution offering practically-
focused legal content across
24 Australian practice areas.
Practical Guidance provides
access to step-by-step
guidance, legislation, cases,
checklists, tools and forms
and precedents all in one
place in the context of a
lawyer’s workflow.
Sydney Harbour Bridge
east side at sunset
RELX Annual report and financial statements 2019 | LegalMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 30
Exhibitions
Our events leverage industry expertise, large
data sets and technology to enable our customers
to generate 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
§ In 2019 Reed Exhibitions launched 50
new events
§ 43 industry sectors are served in almost
30 countries across the globe
§ Each year around 130,000 businesses choose
to exhibit at our events. They connect with the
more than 7m people who attend to find new
products or suppliers, learn about their
industry and be inspired
§ 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 2019, 283 events offered proactive
matchmaking to around 3.2 million customers.
Direct customer feedback from around 100,000
customers demonstrates those who use the
service tend to have a better event, reporting
higher levels of value and satisfaction
.
Business overview
Exhibitions is a leading global events business. It combines
face-to-face with data and digital tools to help customers learn
about markets, source products and complete transactions at
over 500 events in almost 30 countries, attracting more than
7m participants.
Reed Exhibitions has its headquarters in London and has further
principal offices in Paris, Vienna, Düsseldorf, Moscow, Norwalk
(Connecticut), Mexico City, São Paulo, Abu Dhabi, Beijing,
Shanghai, Tokyo, Singapore and Sydney. Reed Exhibitions has
4,600 employees worldwide and its portfolio of events serves
43 industry sectors.
Revenues for the year ended 31 December 2019 were £1,269m
compared with £1,219m in 2018 and £1,109m in 2017. In 2019, 20%
of Reed Exhibitions’ revenue came from North America, 40% from
Europe and the remaining 40% from the rest of the world on an
event location basis.
Reed Exhibitions organises influential events in key markets
focused on addressing the needs of the industry, 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, media, pharmaceuticals,
real estate, recreation, security and safety, transport and travel.
Following the acquisition of Mack Brooks, Reed Exhibitions now
has strong and growing global positions in new sectors including
sheet metal processing (through the Blech portfolio), rail (through
the Railtex portfolio), airports (through the Inter Airport portfolio)
and industrial fasteners (through the Fastener Fair portfolio).
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 and sector coverage allows it to effectively
respond to changes in global trade and capture growth
opportunities 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.
RELX Annual report and financial statements 2019 | Market segments RELX Annual report and financial statements 2019 | Exhibitions
31
Strategic priorities
Reed Exhibitions’ strategic goal is to deliver measurably higher
value and improved outcomes to its customers. It is achieving
this organically by focusing on understanding and responding to
individual customers’ needs and business objectives.
Reed Exhibitions delivers a platform for industry communities
to conduct business, network and 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.
In Japan more events were launched outside the venue-restricted
Tokyo area including Industrial AI & IoT Expo in Osaka and
Administration, Human Resources & Accounting in Nagoya.
Reed Exhibitions continued to work with carefully selected media
partners to offer new live events to highly targeted audiences such
as Outside Experience and Complex Con Chicago in the US. Reed
Exhibitions announced the acquisition of Mack Brooks in January
2019, a business with a portfolio of more than 30 events in 14
countries, including Germany and the United Kingdom, serving
nine industry sectors.
In addition Reed Exhibitions made several small acquisitions to
secure positions in high growth markets. These included Big 7
(corporate gifts) and PackPlus (packaging) in India and Florida
Supercon (entertainment) in the US.
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 economic activity. 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 one of the largest global event organisers in a
fragmented industry, holding a global market share of less than
10%. Other international exhibition organisers include Informa,
Clarion 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.
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
new launches, strategic partnerships and selective 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 increase
customer value and 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 2019 Reed Exhibitions launched 50 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 sectors
continued to be cloned into new geographic markets, with CMEF
(medical equipment) expanding into Indonesia.
There was also rapid cloning of successful launches and recently
acquired brands into new markets. Bar Convent Berlin, in the bar
equipment sector, was successfully extended into the USA in 2018
and in 2019 taken to South America with the launch of Bar Convent
São Paulo. After launching in London in 2018, Proud Experiences
(serving the LGBTQ+ travel community) was successfully run in
New York in 2019.
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 32
The world’s property market
Asia’s sourcing and networking platform for the
complete aluminium industry chain
International trade fair for the building
industry
CHINA DAILY-USE ARTICLES TRADE FAIR
China’s event for suppliers and buyers in the
housewares industry
A premier comic book and pop culture
convention
Latin America’s event for hardware,
electronics and construction
The leading international trade show for
fitness, wellness & health
Asia Pacific’s luxury travel event
International exhibition for airport equipment,
technology, design and services
LAS
VEGAS
The North American jewellery industry’s
premier event
International perfumery and cosmetics
exhibition
The No.1 machine tools and metalworking
exhibition serving ASEAN
Leading international exhibition for personal
care ingredients
International Security Conference & Exposition
An exhibition gathering equipment, solutions
and services for electronics manufacturing
Japan’s one-stop shop for office related
products and services
Premier global event for the travel industry
International trade fair for autoparts,
equipment and services
International art fair for photography
REVENUE BY FORMAT
REVENUE BY GEOGRAPHICAL MARKET
EVENTS REVENUE BY SOURCE
£1,269m
Electronic
4%
£1,269m
Rest of
world
40%
Face-to-face
96%
£1,269m
Admissions
and other
28%
North
America
20%
Europe
40%
Exhibitor
fees
72%
RELX Annual report and financial statements 2019 | Market segments RELX Annual report and financial statements 2019 | Exhibitions
33
2019 financial performance
Revenue
Adjusted operating profit
2019
£m
1,269
331
2018
£m
1,219
313
Underlying
growth
+6%
-1%
Portfolio
changes
+2%
+5%
Currency
effects
+2%
+2%
Total
growth
+4%
+6%
Underlying revenue growth rates exclude exhibition cycling effects.
Exhibitions achieved strong underlying revenue growth in
2019, in line with the prior year.
Underlying revenue growth was +6%. After portfolio changes
and six percentage points of cycling-out effects, constant
currency growth was +2%. Reported revenue growth of +4%
benefited from the strength of the US dollar versus sterling.
Underlying adjusted operating profit declined by -1%, primarily
reflecting cycling-out effects. Constant currency adjusted
operating profit growth was +4%, and the margin increased to
26.1% after portfolio effects and integration benefits.
We continued to pursue organic growth opportunities, launching
50 new events during the year, and piloting and rolling out further
data analytics initiatives. In addition we acquired Mack Brooks,
a leading organiser of over 30 highly complementary events, and
we made a number of minor disposals.
In 2019 market conditions were good in Europe and the US,
and remained strong in China. The negative impact of venue
constraints associated with the Tokyo Olympics was offset by
higher growth elsewhere, supported by our active launch
programme.
In 2020 the Tokyo venue constraints could negatively impact the
overall divisional revenue growth rate by one or two percentage
points, before the new and expanded permanent venue capacity
comes on stream at the end of the year. The extent to which the
novel coronavirus outbreak will impact our business in China,
or other regions, remains uncertain.
2020 outlook
We expect underlying revenue growth trends to continue in line
with recent years, the above temporary venue constraints and
coronavirus impacts aside, and we expect cycling-in effects
to increase the reported revenue growth rate by around five
percentage points.
REVENUE
£m
Underlying growth +6%
1,219
1,269
ADJUSTED OPERATING PROFIT
£m
Underlying growth -1%
313
331
2018
2019
2018
2019
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview
34
We have a lot of people who
ask us how to get started
in this business and we
say there’s one show you
have to go to and that’s the
National Hardware Show.
Bob Thorsen
Founder
The Little Burros
RELX Annual report and financial statements 2019 | Market segments 35
The National
Hardware Show:
the event that powers
businesses
The Little Burros is a family
operated, garden tool brand,
co-founded, owned and run
by innovator Bob Thorsen
and his family.
The family of five launched their brand at The National
Hardware Show in 2014 and in five years have built an
impressive following by providing innovative solutions
to everyday garden problems.
Based in Virginia, US, Bob and his wife Sudie were
working in the garden when Bob thought up an
ingenious tool organiser for attaching to your
wheelbarrow. The whole family came together to
build a 3D prototype of the ‘Original Little Burro’ and
decided to present it at the National Hardware Show.
They ended up securing their first order of 1,200 pieces
from a major retailer at the show.
The Thorsen family, who have won countless awards
for their innovative product, attribute their initial
success to The National Hardware Show, and return
to the event each year with their expanded offering of
garden products.
1200
Little Burros secured its first
order of 1,200 pieces from a
major retailer at the National
Hardware Show
About the National
Hardware Show
The National Hardware Show, which
takes place annually in Las Vegas,
is a showcase for home improvement
innovations and retail trends.
Each year it brings together over
25,000+ home improvement professionals
and some 120 media outlets for three days
of face-to-face sourcing, trading,
networking and learning.
The Little Burros Burro
Buddy in use
RELX Annual report and financial statements 2019 | ExhibitionsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 36
RELX Annual report and financial statements 2019 | Corporate responsibility
37
Corporate
Responsibility
The Corporate Responsibility Report is
an integral part of our Annual Report
and Financial Statements. This section
highlights progress on our 2019 corporate
responsibility objectives. The full 2019
Corporate Responsibility Report is
available at www.relx.com/go/CRReport
Non-financial information statement
RELX is required to comply with the
reporting requirements of sections 414CA
and 414CB of the Companies Act 2006,
which relate to non-financial information.
The list below outlines for our
stakeholders where this information for
RELX can be found:
Reporting Requirement:
Environmental matters
Employees
Social matters
Human rights
Anti-corruption and
anti-bribery matters
Policies, due diligence
processes and outcomes
Description and management
of principal and emerging
risks and impact
of business activity
Description of
business model
Non-financial metrics
48-49
45-46
38-42, 44-47
38, 40-42, 44,
46-48
40, 42-43,
47-48
42-43, 47-48
58-61
5, 14-15, 21,
26, 31
12, 18, 24, 30,
38, 45-49
RELX Annual report and financial statements 2019 Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 38
Corporate responsibility overview
We define corporate responsibility
(CR) as the way we do business,
working 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 2019,
shareholders, employees, governments and the communities
where we operate, to help us identify our material CR 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 a signatory of the United Nations Global Compact (UNGC)
and are dedicated to advancing the UN’s Sustainable Development
Goals (SDGs) by 2030. These aim to end poverty, protect the planet
and ensure prosperity for all people 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
§§ Advance 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. Elsevier makes a significant contribution to SDG
3 (Good Health and Well-being). To broaden access to its content,
Elsevier supports programmes where resources are often
scarce. Among them is Research4Life, a partnership with
UN agencies and up to 160 publishers; we provide core and
cutting-edge scientific information to researchers in more than
100 developing countries. As a founding partner and leading
contributor, Elsevier provides over a quarter of the material
available in Research4Life, encompassing approximately 23,500
journals and 86,000 e-books. In 2019, there were over 1.3m
Research4Life downloads from ScienceDirect.
Elsevier serves the global scientific research community,
publishing over 496,000 articles in 2019. In addition, the Elsevier
Foundation supports partnerships to advance inclusion and
diversity in science, research in developing countries and
global health. In 2019, 35 women scientists from across Africa
participated in a Water First! three-day workshop in Accra, Ghana.
The aim was to empower African women researchers to advance
their work, helping address the disparity of African women on the
forefront of the struggle for water security without a proportionate
share of agency to affect change. The workshop was led by
Elsevier Foundation Board member, Dr. Geri Richmond, who
founded the University of Oregon’s COACh programme which aims
to increase the scientific success and leadership capacity of
women scientists and engineers.
In the year, we created new SDG Graphics to explore the state of
science underpinning the SDGs, including for SDG 6 (Clean Water
and Sanitation). Research in the field between 2014-2018 had an
annual compound growth rate of 8.5% (compared to 2% for all
research fields), yet only 1% of the share of output was from low
income countries, those most affected by access to decent water
and sanitation.
To help address the output gap for low income countries, Elsevier
runs Research Without Borders in association with the African
Journals Partnership Program, supported by the US National
Library of Medicine, US National Institute of Health and the
Council of Science Editors. Elsevier experts help their African
peers improve the visibility of their research by funding skilled
volunteers who provide strategic, editorial communication, and
operational guidance. In 2019, participants included Anne Roca,
Deputy Editor of Lancet Global Health, and Christine Aime Sempe,
a publisher with Elsevier Paris, who worked with Annales
Africaines de Medecine in the Democratic Republic of Congo and
held author workshops with African editors at Amref’s African
Health Agenda International Conference in Rwanda.
RELX Annual report and financial statements 2019 | Corporate responsibility 39
Technology
unites missing people
with their families
“ I’ve lost touch with someone and am not sure what to
do.” This statement on the website of Missing People
– the only British organisation focused on uniting
missing children and adults with their families and
others of importance in their lives – is apt. According
to Missing People, 186,000 people are reported
missing each year in the United Kingdom.
300
applications to Missing
People’s Lost Contact service
in 2019
According to Missing People, 186,000
people are reported missing each year
in the United Kingdom.
In 2019, with free access to LexisNexis Risk Solutions’
TraceIQ, Missing People re-launched its Lost Contact
service. Lost Contact helps people reconnect with
someone missing who is not at risk or missing in the
eyes of the law.
TraceIQ allowed Missing People to find more people
through faster and more efficient searches. During
2019, the relaunch led to over 300 applications for
support. Of completed cases, 64% of missing family
members were found and given the chance to
reconnect. This was the result for three brothers,
separated for over a decade: “We lost contact with my
younger brother 12 years ago and had been unable to
find him through other channels but Missing People
found him and we had an amazing reunion with all the
family so thank you for your amazing work.”
TraceIQ has enabled Missing
People to reinvigorate our
vital Lost Contact service
which can reunite the
missing with the people
who matter most to them.
Jo Youle
CEO
Missing People
Missing People’s Lost
Contact service uses
LexisNexis Risk Solutions
tools to reconnect missing
people with their families
and others
RELX Annual report and financial statements 2019 | Corporate responsibility overviewCorporate ResponsibilityFinancial statements and other informationGovernanceFinancial reviewMarket segmentsOverview 40
1. Our unique contributions (continued)
Risk & Business Analytics
Risk & Business Analytics’ (RBA) tools and resources help law
enforcement keep communities safe and protect society by
detecting and preventing fraud across a range of business sectors
and at US federal, state and local government levels. In the
year, LexisNexis Risk Solutions partnered with local police
departments, including the Graham Police Department, North
Carolina, to provide community crime maps with automated alerts
notifying citizens of crimes in their area.
RBA colleagues developed the ADAM programme in 2000 to
help the National Center for Missing and Exploited Children find
missing children. ADAM distributes missing child alert posters
to law enforcement, hospitals, libraries and businesses within
specific geographic search areas. In 2019, two children were found
through the ADAM programme. In the United Kingdom, Missing
People is a key partner and LexisNexis Risk Solutions tools helped
reconnect the missing with those searching for them.
It is a catch 22 that you need to have credit to access credit.
LexisNexis Risk Solutions is working to address a lending blind
spot for those seeking to advance personal objectives likely to be
creditworthy (like higher education or professional objectives like
expanding a small business) but unable to gain credit because of
missing or outdated negative information. Lenders need the right
data to lend responsibly, ensuring they only provide loans to those
with an ability to pay them back. Our RiskView tool widens financial
inclusion for marginalised groups, including those without
credit history, by providing alternative data sets not in traditional
credit reports, such as home ownership, education status
and professional licences. In 2019, we held an event with US
organisations, including consumer advocacy groups such as the
Center for Responsible Lending, UnidosUS, the Pew Charitable
Trusts and the Annie E. Casey Foundation to explore improving
equality of access to financial services for more citizens.
Issues can be magnified in developing economies as there are two
primary challenges to financial inclusion: identity verification and
credit risk. LexisNexis Risk Solutions’ ThreatMetrix, in partnership
with fintech partners, is deriving alternative data that can be
used to assess risk from consumers who use smartphones.
We launched a pilot in Mexico with plans to spread the pilot to
more countries and also deploy an account opening fraud
detection service for developing economy lenders in 2020.
Legal
LexisNexis Legal & Professional promotes the rule of law and
access to justice through its products and services. In 2019,
advancing SDG 16 (Peace, Justice and Strong Institutions),
LexisNexis Middle East & North Africa launched a new Lexis
Middle East platform, an online database providing access to
case law, legislation and regulations in English and Arabic,
as well as expert commentary in English for Middle East
jurisdictions. Drawn from over 300 regional sources, Lexis
Middle East is updated daily to inform the legal community.
In 2019, we launched the LexisNexis Rule of Law Foundation to
partner with a wide range of stakeholders on rule of law projects
around the world. A key tool on the Foundation site is the
LexisNexis Rule of Law Impact Tracker, updated with 2019 data,
visualising how key measures such as child mortality, corruption,
and life expectancy decrease when the rule of law grows.
In the year, we supported the development of the UNGC’s SDG 16
Action Platform and held the first country consultation in
Timor-Leste. During the full day workshop, in collaboration with
the Timor-Leste Office of Foreign Affairs, seventy entrepreneurs
explored how supporting the SDGs can help their businesses and
their country.
We also held Rule of Law Cafés throughout 2019 in London,
Singapore and Malaysia, bringing together stakeholders,
including customers, government, NGOs and law societies, to
discuss opportunities to go beyond legal minimums to advance
the rule of law. During UN General Assembly week 2019, we held
a public event on business and human rights with Ambassador
Keith Harper, former US representative to the Council on Human
Rights, live-streamed to RELX employees and made available
afterward on the RELX SDG Resource Centre.
Exhibitions
Reed Exhibitions events strengthen communities and support
the SDGs. In 2019, we held the 12th annual World Future Energy
Summit (WFES) which aims to accelerate global commitment
to climate change solutions. The event engaged some 34,000
attendees, including 15 heads of state, 100 ministers and more
than 3000 business leaders and students, as well as 800 exhibiting
companies from over 40 countries. WFES facilitated sustainability
deals that will impact 20 countries with a combined estimated
value of more than $10 billion. These included Solar Energy
Corporation of India’s plans for a $7 billion Cold Desert Regions
Ultra-Mega Solar Power project and Abu Dhabi National Energy
Company PJSC and LakeDiamond partnership agreement on
photovoltaic cells and power-beaming technology.
In the year, planning advanced for the first Smart Cities Expo &
Forum at World Future Energy Summit 2020 to bring together
governments and municipalities with leaders in smart
infrastructure, future transportation and next-generation
building technology to advance sustainable cities.
On the theme of SDG 11, Sustainable Cities and Communities,
colleagues at Reed Exhibitions India supported our Good Cities
2019 SDG Inspiration Day in Delhi which connected necessary
contributors to more sustainable cities including government,
business, and civil society. Among others, Amit Sharma, Head of
Energy and Sustainability Services at Schneider Electric India, and
Aditi Haldar, South-Asia Director of GRI, explored the challenges
of health planning for urban populations and the future jobs and
skills required to deliver smart city data and infrastructure.
RELX Annual report and financial statements 2019 | Corporate responsibility RELX Annual report and financial statements 2019 | Corporate responsibility
41
During Reed Exhibition’s World Travel Market 2019, we explored
resilient destinations in an age of increased disaster risk.
Jamaica’s Tourism Minister Edmund Bartlett and the Global
Business Coalition for Education’s Jake Taesang Cho argued for
improved support for disaster relief preparedness. During the
session we revealed research underpinning our SDG 11 Graphic
on sustainable cities, available on the RELX SDG Resource Centre.
Across RELX
Recognising that across RELX we have products, services, tools
and events that advance the UN’s 17 SDGs, we created the free
RELX SDG Resource Centre in 2017 to advance their awareness,
knowledge and implementation. In the year, we added new
partners such as UN University; its original research on the site
includes the 2019 report Unlocking Potential, which explores
public-private partnerships that puts the financial sector at the
heart of global efforts to end modern slavery and human trafficking.
In the year, we improved the search functionality of the RELX SDG
Resource Centre to ensure queries are returned with greater
accuracy and enhanced the SDG News Tracker – which provides
up-to-the minute news from over 70,000 global sources in all the
UN languages plus German – to allow searching for SDG news by
keyword and geography. We also reached the milestone of 1,000
content items from our business and partners on the site and will
increase this further in 2020. In addition, we indexed the content
of Elsevier’s Scopus (a leading citations database with over 76m
records) to the SDGs, which will accelerate research underpinning
the RELX SDG Graphics.
2019 marked the ninth year of the RELX 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, SolarSack, uses ultraviolet radiation from direct sunlight
to purify water at an exceptionally low cost. The funding will bring
the system to people living in refugee camps in Uganda. The
$25,000 second-prize winner was Christopher Mtalimanja, an
educator and disability-rights activist, who is creating dry bio
latrine system at three primary schools in Malawi. Liquid waste
is transformed into fertiliser used to grow seedlings for revenue,
while solid waste is transferred to a digester to produce energy for
the schools. The winners joined us and past awardees at World
Water Week in Stockholm and will also be featured in Elsevier’s
journal Water Research and gain access to Science Direct.
2019 OBJECTIVES
Advance of science
and health:
Meaningful support
to advance SDG3
(Good Health
and Well-being),
including Elsevier
Foundation
Women in Water in
Africa leadership
workshops
Advance of science
and health:
Create new RELX
SDG Graphics
on the state of
the knowledge
underpinning
the SDGs
Protection of
society: Workstream
on improving
financial inclusion
for low-income
citizens
Promotion of the
rule of law and
access to justice:
Meaningful support
of SDG 16 (Peace,
Justice and Strong
Institutions),
including support for
UNGC SDG 16 Action
Platform
Achievement
§§ Water First! three-day workshop
in Accra, Ghana in September 2019
with 35 women researchers from
across Africa
§§ Research Without Borders, African
Journals Partnership Program, eight
volunteers (12 weeks in total) in 2019;
40 volunteers since 2017 providing
expertise in publishing, marketing,
operations and technology across
the continent, including in Malawi,
Ethiopia, Sierra Leone, DRC, Uganda,
Mali, Kenya, and Rwanda
§§ Increasing capacity at Epicentre’s
Niger Research Centre encompassing
access to ScienceDirect, Scopus,
Scival, Clinical Key, and Mendeley,
as well as media and speaker
assistance for Epicentre Scientific
Day – $300,000 provided of the
$600,000 committed to 2022
§§ Two created in 2019:
– SDG 6 (Clean Water and Sanitation)
– SDG 11 (Sustainable Cities and
Communities)
§§ Engaged with US organisations
including consumer advocacy groups
such as the Center for Responsible
Lending, UnidosUS, the Pew Charitable
Trusts, and the Annie E. Casey
Foundation to discuss how LexisNexis
Risk Solutions’ alternative data sets
in its RiskView tool (e.g., home
ownership, education, and
bankruptcies) can support access to
credit for low scorers in traditional
credit bureau reports
§§ Pilot in Mexico analysing risk attributes
from digital devices, using LexisNexis
Risk Solutions’ ThreatMetrix to
address challenges to financial
inclusion for middle income citizens in
emerging markets, including identity
verification and credit risk
§§ Launched LexisNexis Rule of Law
Foundation
§§ Rule of Law Cafés in London, Singapore
and Malaysia
§§ Supported UNGC SDG 16 Action
Platform; hosted first in-country
consultation in Timor-Leste
§§ UN General Assembly week event
with Ambassador Keith Harper, former
US representative to the Council on
Human Rights on business and
human rights
RELX Annual report and financial statements 2019 | Corporate responsibility overviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 42
1. Our unique contributions (continued)
2. Governance
Achievement
§§ SDG Inspiration Day Delhi, India focused
on SDG 11 (Sustainable Cities and
Communities): participation from
government, peers, media, foundations,
NGOs and youth; front page coverage in
India’s largest circulation newspaper of
four million daily
§§ Organised panel discussion at World
Travel Market focused on disaster relief
preparedness with Jamaican Tourism
Ministry at which sustainable cities
research launched; planning for a first
Smart Cities Expo & Forum at World
Future Energy Summit 2020
§§ New partner content from UN
University and Partnership for
Sustainable Development Data;
new search function and dedicated
news section
2019 OBJECTIVES
Fostering
communities:
Meaningful
support of SDG 11
(Sustainable Cities
and Communities),
including focus
at relevant Reed
Exhibition shows,
and a ‘Good Cities’
2019 SDG Inspiration
Day India
Universal,
sustainable access
to information:
Broaden RELX SDG
Resource Centre to
include content from
new partners and
enhance functionality,
including for SDG
News Tracker
2020 OBJECTIVES
§§ Advance of science and health: Meaningful support of SDG 3
(Good Health and Well-being) including development of MSF/
Epicentre Medical Day in Niger, and Water First! Workshops
for Women in Water, encompassing skills training through
Elsevier’s Research without Borders
§§ Protection of society: Meaningful support of SDG 16 (Peace,
Justice and Strong Institutions), including expansion of
activities to find missing children and adults through US
ADAM programme and UK Missing People; SDG 10 (Reduced
Inequalities): Advance financial inclusion pilots to more
countries including India
§§ Promotion of the rule of law and access to justice: Meaningful
support of SDG 16 (Peace, Justice and Strong Institutions),
including expansion of Rule of Law Cafés to new locations
including South Africa; development of new LexisNexis Rule
of Law Foundation
§§ Fostering communities: SDG 11 (Sustainable Cities and
Communities): Enhance sustainability of trade show events
§§ Create SDG Champions network
§§ More RELX SDG Graphics on the state of knowledge
underpinning the SDGs
§§ Increase RELX SDG Resource Centre content by 25%
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
* 2030 is the deadline for the UN’s Sustainable Development Goals; we aim to do our
part toward their achievement.
Our Board recognises the importance of maintaining high
standards of corporate governance, which underpins our ability
to deliver consistent financial performance, and value to our
stakeholders. The 2018 UK Corporate Governance Code (UK
Code) applied to RELX PLC from 1 January 2019. During the year,
the Board took steps to ensure that RELX fully addressed the
requirements of the UK Code. This included reviewing the
Company’s approach to engaging with key stakeholders,
assessing RELX’s culture, aligning our purpose, strategy and
values, and assessing the Group’s Workforce Policies.
RELX PLC is the sole parent company of the group. It owns 100%
of the shares in RELX Group plc which, in turn, holds all of the
operating businesses, subsidiaries and financing activities of the
group. RELX PLC, its subsidiaries, associates and joint ventures
are together known as RELX.
Following the simplification of our corporate structure which
took place in 2018, the shares of RELX PLC are traded through its
primary listing on the London Stock Exchange and its secondary
listing on Euronext Amsterdam, while its securities are also
traded on the New York Stock Exchange under its American
Depositary Share Programme. Accordingly, the Board has
implemented standards of corporate governance and disclosure
applicable to a UK incorporated company, with listings in London,
Amsterdam and New York.
During the year the Board took steps to ensure we fully addressed
the requirements of the UK Code. This included reviewing the
company’s approach to engaging with key stakeholders,
assessing the company culture and aligning our purpose, values,
strategy and workforce policies.
Information and documents detailing our governance procedures
are available to stakeholders online at www.relx.com. The RELX
financial statements are prepared in accordance with
International Financial Reporting Standards.
The RELX Code of Ethics and Business Conduct (the Code) sets
the standard for our corporate and individual conduct and, among
key issues, covers 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
where legally permissible – and prohibits retaliation against
anyone for reporting a violation they believe may have occurred.
The Code supports 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 to ensure we uphold
human rights. In 2019, we updated our Modern Slavery Act
Statement, available from the RELX homepage, which states how
we are working to avoid human trafficking and modern slavery in
our direct operations and in our supply chain.
We maintain a comprehensive set of compliance policies and
procedures in support of the Code reviewed at least annually
to ensure they remain current and effective. Our policies and
procedures help us comply with the law and conduct our business
in an open, honest, ethical and principled way, and they comprise
part of our antibribery adequate procedures for compliance with
applicable laws.
RELX Annual report and financial statements 2019 | Corporate responsibility RELX Annual report and financial statements 2019 | Corporate responsibility
43
As a signatory to the UNGC and its principles, encompassing
labour, environment, anti-corruption and human rights, we
demonstrated leadership by maintaining our LEAD company
status, participating in the UNGC SDG Action Platforms Decent
Work in Global Supply Chains and Peace, Justice and Strong
Institutions and hosted the first country consultation in
Timor-Leste. We serve on the boards of the UNGC networks in
the UK and Netherlands. We produce an annual Communication
on Progress report, required of signatories annually, where we
attained the Advanced Level.
Globally, in 2019, RELX paid £464m 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 about where we
pay taxes and our broader contribution to society, available at:
www.relx.com/go/TaxPrinciples. We also progressed a project
to make African tax law more transparent to both governments
and citizens.
The Statement of Investment Principles for the Reed Elsevier
UK pension scheme indicates that environmental, social or
governance issues that may have a financial impact on the
portfolio or a detrimental effect on the strength of the employer
covenant, are taken into account when making investment
decisions. CR issues are relevant to other investment decisions
we make.
2019 OBJECTIVES
Continue corporate
security incident
response
preparedness;
expand ISO27001
data protection
compliance
certification
New Culture of
Integrity manager
communications,
training and
resources
Advance work on
African tax law
codification project
Achievement
§§ Incident Response Plan 3.0 released
§§ Training for senior leadership including
simulations
§§ UK Cyber Essentials PLUS certification
for key product groups
§§ ISO 27001 certification expanded to
cover Risk and Business Analytics
businesses in UK, India and China
§§ RELX Do The Right Thing Principles
developed with compliance leads
across business areas
§§ RELX Ethical Leader manager
communications and online training
incorporating Do the Right Thing
Principles
§§ Advanced discussions with OECD’s
Centre for Tax Policy and
Administration; shortlist of countries
for proof of concept in 2002
Employees receive mandatory training on the Code – both as new
hires and at regular intervals during their tenure – in order to
maintain a respectful workplace, prevent bribery and protect
personal and company data. Mandatory periodic training covers
key Code topics in depth and is supplemented by advanced
in-person training for higher-risk roles.
In 2019, we focused on fostering our culture of integrity across
RELX. We developed Do The Right Thing Principles with
Compliance leads across the business and created RELX Ethical
Leader online training and embedded them in manager
communications and resources, including a new Ethical Leader
Toolkit. We also held Compliance Week activities with video,
email, posters and a quiz.
We offer employees a confidential reporting line, managed by
an independent third party, accessible by telephone or online
24 hours a day, 365 days a year (as allowed under applicable
law, employees may submit reports to the confidential line
anonymously). 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.
We remained diligent in our ongoing efforts to comply with
applicable bribery and sanctions laws and to mitigate risks in
these areas. Our anti-bribery and sanctions efforts include
enforcement of detailed, risk-based internal policies and
procedures on topics such as doing business with government
officials, gift and entertainment limits, gift registers, and
complying with complex sanctions requirements. Relationships
with third-parties and acquisition targets are evaluated for risk
using questionnaires, references, detailed electronic searches,
and Know Your Customer screening tools. We monitor and assess
the implementation of our anti-bribery and sanctions programs
by continually reviewing and updating our policies and
procedures; conducting periodic programmatic risk-
assessments, and conducting quality assurance reviews and
internal audits on the operational aspects of the programmes.
As a company focused on knowledge and analytics, each year
we are in possession of large amounts of data. It is therefore
incumbent on RELX to ensure that we provide our customers and
our people with the highest levels of data privacy and security.
We continually monitor our procedures and systems to meet this
requirement, ensuring compliance with all relevant laws where
we do business around the world. In 2019, we provided training
and simulations, scenario planning, and released our Incident
Response Plan 3.0. ISO 27001 data privacy certification now
covers relevant business in India, China, Ireland and the UK.
In 2019, we held a Fraud Awareness Month, as well as a
Cyber Security Awareness Month for colleagues with videos,
newsletters, and security town halls. We also ran our second
Great Phishing Challenge contest, giving employees the
opportunity to detect suspicious emails, with more than 2000
submissions. We also hosted the US Secret Service’s First
National Seminar on Cyber Incident Response Preparedness at
our offices in Alpharetta, Georgia. We also continued educating
our employees on the dangers of phishing attacks by performing
monthly simulations, providing reporting tools, and using
additional technology to detect and delete suspicious emails.
RELX Annual report and financial statements 2019 | Corporate responsibility overviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 44
Inspiring Action
on the SDGs in Delhi
On 2 May 2019, we held the fourth RELX SDG Inspiration Day in
Delhi, India to catalyse action on the UN Sustainable Development
Goals (SDGs). The focus, in partnership with the Ban Ki-Moon
Centre for Global Citizens, (UN) Global Compact India, and the
Responsible Media Forum, was SDG 11, Sustainable Cities and
Communities, and the interconnection with the other 16 SDGs,
including Good Health and Well-being (SDG 3) and the Rule of Law
(SDG 16).
4th
global RELX SDG
Inspiration Day
RELX SDG Inspiration Day
Delhi in May 2019 engaged
stakeholders on SDG 11,
Sustainable Cities and
Communities
The RELX SDG
Inspiration Day positively
connected those working
to achieve the SDGs
in India.
Kamal Singh
Executive Director
(UN) Global Compact India
Business, government, investors, academia,
youth and NGOs – all stakeholders needed to
advance the SDGs – came together to discuss
positive, collaborative action.
Kamal Singh, Executive Director of Global Compact
India, cited the importance of India; if India achieves
the goals , he said, the world is half way to realising
the SDGs. Yet the task globally, according to Anna
French, Deputy Director of the UK’s Department for
International Development India, requires around
$5tn USD each year. New approaches are needed to
fund the goals, she said, and business must do its part.
There was an Expert Café allowing participants to
engage with experts including Arunava Dasgupta,
Head of Urban Design at Delhi’s School of Planning
and Architecture; Amit Sharma, Head of Energy and
Sustainability Services at Schneider Electric India
and Aditi Haldar, South-Asia Director of GRI. Themes
included: health and urban populations, the role of
data and technology, green city energy systems and
the implications for skills and jobs.
Barbara Müller, Senior Manager at BMW Foundation,
highlighted the Foundation’s Responsible Leader
Networks mobilising leaders to collaborate for a
sustainable and just future, such as Yash Ranga,
Stakeholder Engagement Partner at Jaipur Rugs
Foundation. Ranga stated, “hope is a beggar that
makes you walk on fire,” don’t hope for change,
make it happen.
Ambassador Kim Won-Soo, former UN High
Representative for Disarmament Affairs and Board
Member of the Ban Ki-moon Centre for Global
Citizens, made the case for smaller, smart
municipalities.
RELX Annual report and financial statements 2019 | Corporate responsibility RELX Annual report and financial statements 2019 | Corporate responsibility
45
2020 OBJECTIVES
§§ Continue corporate security incident response
preparedness; implement controls to increase resilience to
user-based attacks, such as phishing and ransomware
§§ Assess and develop strategies to address compliance with
emerging privacy regulation such as the California Consumer
Privacy Act
§§ Continue to advance African tax law codification project;
deploy proof of concept to a shortlist of countries
OUR 2030 VISION
Continued progressive actions that advance excellence in
corporate governance within our business and the marketplace
3. People
Our over 33,000 people are our strength. Our workforce is 50%
female and 50% male, with an average length of service of 9 years.
There were 42% female and 58% male managers, and 33% female
and 67% male senior operational managers.
Board of Directors
Senior operational
managers*
Female
36%
33%
4
130
7
261
All employees**
16,600
50% 16,600
Male
64%
67%
50%
*
Senior operational managers are defined as those managers up to and including
three reporting lines from the CEO with a management level of 16 and above – the
senior manager category as defined by our internal job architecture
** Full-time equivalent
At year end 2019, women made up 36% of the members of the
Board. The two Executive Directors on the Board are male. The
Nominations Committee considers the knowledge, experience
and background of individual Board directors.
In the year, we created a new Inclusion and Diversity Policy which
recognises that inclusion is important to our future. We need
the engagement of people from a wide range of backgrounds,
experiences and ideas to achieve real innovation for our
customers around the world. It commits us to: creating a positive
and supportive working environment for all employees; promoting
the diversity of our workforce; recognising and valuing individual
differences and supporting the participation of all team members;
and responding to changing working patterns, including flexible
working as appropriate. In the year, we created an Inclusion
Dashboard for real-time information on a range of key metrics
including gender, age, generation, leavers, data that can be broken
down by job function, business unit and seniority.
Our Inclusion Council is composed of leaders from each area of
our business to help us set and track our inclusion and diversity
strategy, supported by an Inclusion Working Group with more than
200 participants. In 2019, our Employee Resource Groups (ERGs)
grew to 70 networks, such as women’s forums and pride groups,
to facilitate support, mentoring and community involvement. In
the year, we held our first ERG conference with more than 100 ERG
representatives from across RELX. Held over two days there were
keynotes by senior leaders, including Marike Van Lier Lels,
Workforce Engagement Director on the RELX Board, panel
discussions with ERG leads, workshops and more over a two
day period. RELX is a signatory to the Women’s Empowerment
Principles, a UNGC and UN Women initiative to help companies
empower women and promote gender equality. In 2019, we were
included in Bloomberg’s Gender-Equality Index.
We comply with employee-related reporting requirements and,
in 2019, we published our second UK gender pay gap data as part of
the UK legislation. We engage in efforts to educate our employees
on pay principles and equal pay. We invest in research to identify
causes of pay differences and regularly evaluate our policies and
processes to ensure they are aligned to our inclusion strategy. We
commit to building a robust framework for monitoring pay equity
across the enterprise and have formally made these pledges as
part of the UN’s Equal Pay International Coalition.
We operate a number of stock programmes for employees
including options, restricted stock and performance stock units.
For senior colleagues, these are based on annual allocations
of stock – the vesting of which may be related to company
performance or service-based. We also offer all employees
stock programmes in which employees may elect to participate
in certain markets, for example Sharesave in the UK. These
incentive programmes are applicable to approximately 20% of
our employees. Targets associated with CR performance are
embedded within our annual incentive framework to progress
our annual and multi-year CR objectives.
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
14 lost time incidents in the year.
In the US, where we have the largest concentration of employees,
our programmes promote workplace wellbeing through health
screenings, online assessments, stress awareness training and
smoking cessation courses, with financial and other incentives
for participation.
Dedicated health and well-being programmes are now available
to more than 70% of our employees. We also maintain a network
of more than 90 Well-being Champions. We held our Fit2Win
competition in the year; teams walk, run, cycle or swim, with the
chance to win $1,000 for the charity of their choice. More than 800
participants took part. Collectively they reached a total of 237,945
km/ 147,852 miles.
RELX Annual report and financial statements 2019 | Corporate responsibility overviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 46
3. People (continued)
2019 OBJECTIVES
Progress UN Equal
Pay International
Coalition
commitments
Achievement
§§ Job architecture project completed and
integrated into new human resources
information system, Workday
§§ Pay equity audits in key functions
Establish a
dashboard for
inclusion metrics
Develop mental
health metrics and
response plans
and geographies completed in 2018,
with adjustments made as necessary
in 2019
§§ Inclusion Dashboard created covering
gender, age, generation, joiners and
leavers by job function, business unit
and seniority
§§ Our Workforce Engagement Director
held a number of meetings with
employees across Europe, the US and
APAC and reported to the Board
§§ Mental health metrics developed
utilising absence, percentage of annual
leave taken and exit interview data
§§ Peer benchmarking to identify common
indicators and best practice
§§ Response plans include expanding
Well-being Champions Network and
training mental health employee leads
2020 OBJECTIVES
§§ Introduce suite of 2020-2025 inclusion goals
§§ Provide manager training on pay principles and equal pay
§§ Map and expand Well-being Champions Network and train
more mental health employee leads
OUR 2030 VISION
Continued high-performing and satisfied workforce through
talent development, D&I and wellbeing; scale support for
external human capital initiatives
4. Customers
In 2019, we surveyed more than 510,000 customers through Net
Promoter Score (measuring customer advocacy) and business
dashboard programmes. This allows us to deepen our
understanding of customer needs and drive improvements.
Results are reviewed by the CEO and senior operational managers
and communicated to staff.
In the year, we disseminated our updated Editorial Policy to
employees, along with a new video series to hear from colleagues
on how the Editorial Policy underpins their work. The Editorial
Policy indicates our respect for human rights and encourages
pluralism of sources, ideas and participants. It makes clear our
commitment to data privacy and security and the responsible use
of artificial intelligence.
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 2019, members of the
Accessibility Working Group logged over 230 accessibility projects
and Elsevier’s Global Books Digital Archive fulfilled more than
4,400 disability requests, 87% of them through AccessText.org,
a service we helped set-up. We established an Accessibility
Advisory Board in the year comprised of accessibility leaders
in the business to review approaches to training, customer
inquiries, compliance models, and screen reader tools. We also
established the second RELX Accessibility Leadership Awards
to celebrate employees who show exceptional leadership in
advancing accessibility.
CR as a Sales Tool is one of our key CR networks helping
employees share information about our commitment to CR with
their customers as a way of differentiating the company and
creating dialogue to understand customer CR priorities and
opportunities for collaboration. In 2019, with the creation of a new
global RELX intranet site, we refreshed existing content and added
resources such as Talking to Our Customers About the SDGs.
2019 OBJECTIVES
Roll out new
Editorial Policy
training
Achievement
§§ Updated Editorial Policy launched for
all staff by Chief Legal Officer and
General Counsel
§§ New video series, RELX Editorial Policy
in Action, made available to all
employees
Expand online
content for CR as a
Sales Tool
§§ Migration to new intranet; refresh of all
content and introduction of Talking to
Our Customers About the SDGs
Develop
Accessibility
Advisory Board
§§ Accessibility Board created
representing all business areas focused
on standardising accessibility training,
compliance models, automated testing
and enterprise-wide communications
2020 OBJECTIVES
§§ New SDG Customer Award to be presented at annual flagship
RELX SDG Inspiration Day
§§ Map customer feedback mechanisms across business areas
§§ Develop framework for product accessibility self-audits
OUR 2030 VISION
Continue to expand customer base across our four business
units through excellence in products and services, active
listening and engagement, editorial and quality standards,
and accessibility; a recognised advocate for ethical
marketplace practice
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 £4m in cash (including through
matching gifts) and the equivalent of £14.7m in products, services
and staff time in 2019. Globally, 45% of employees were engaged
in volunteering through RE Cares and we reached 26,500
RELX Annual report and financial statements 2019 | Corporate responsibility RELX Annual report and financial statements 2019 | Corporate responsibility
47
disadvantaged young people through time, in-kind and cash
donations. A network of over 240 RE Cares Champions ensures
the vibrancy of our community engagement.
Each September, we hold RE Cares Month to celebrate our
community commitment. Throughout 2019, we raised funds
($60,866 to date) to help global fundraising partner, Hope and
Homes for Children (HHC), which aims to ensure children grow
up in families rather than institutions. Employees will be working
to raise $100,000 over a two-year period to support Hope and
Homes’ work with hearing-impaired children in Moldova.
The country has three orphanages for children with
hearing impairment as disability is a common impetus for
institutionalising children. Funding will support inclusive
education to help hearing-impaired children integrate into
mainstream education, through speech therapy, quality hearing
aids, support for parents and teacher training. In early September,
HHC ran a two-day training course on the issues for 38
representatives from 35 municipalities across Moldova.
We held our annual global book drive, yielding 8,937 books for
local and developing world readers and announced the winners
of the ninth Recognising Those Who Care Awards to highlight
the exceptional contributions to RE Cares of eight individuals.
Individual winners from across the business travelled to
RELX-supported projects in Ghana with Book Aid International,
a charity working to foster a love of reading in children across
Africa through book provision and programmes that increase the
educational capacity of schools and libraries. RELX has worked
with Book Aid for over 20 years and has donated more than one
million books including some 143,908 in 2019.
2019 OBJECTIVES
New RELX global
fundraising
partnership
Create guidance
for calculating
pro bono
contributions
Achievement
§§ Hope and Homes for Children project in
Moldova to help children with hearing
impairment access specialised speech
and language therapy chosen from a
shortlist in an all-employee vote
§§ Aiming to raise at least$100,000 during
next two years, with almost $61,000
already raised
§§ 35 children assessed by year-end; internal
team travelled to Moldova to create a video
to be shared with all employees
§§ Worked with LBG and key stakeholders to
improve methodology for calculating
in-kind contributions
§§ Developed guidance note shared with
finance colleagues and lead RE Cares
Champions
2020 OBJECTIVES
§§ Progress new partnership with global fundraising partner,
Hope and Homes for Children
§§ Develop RE Cares Manager training
§§ Create RE Cares module for staff induction across RELX
OUR 2030 VISION
Through our unique contributions, significant, measurable
advancement of education for disadvantaged young people;
investments with partners for maximum impact
6. Supply chain
Given the importance of maintaining an ethical supply chain,
we have a Socially Responsible Supplier (SRS) programme
encompassing all our businesses, supported by colleagues with
expertise in operations, distribution and procurement and a
dedicated SRS Director from our global procurement function.
We have a comprehensive Supplier Code of Conduct (Supplier
Code) available in 16 languages, which we ask suppliers to sign
and display prominently in the workplace. It commits them to
following applicable laws and best practice in areas such as
human rights, labour and the environment. We ask suppliers
to require the same standards in their supply chains, including
requesting subcontractors to enter into a written commitment to
uphold the Supplier Code. The Supplier Code states that where
local industry standards are higher than applicable legal
requirements, we expect suppliers to meet the higher standards.
Through our SRS database, we track key suppliers and those
located in medium and high-risk countries as designated by our
supplier risk tool. This incorporates ten 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 suppliers we engage to meet the needs of our
business. In 2019, there were 354 suppliers on the SRS tracking
list, of which 102 are in high and medium risk countries. At year
end, 91% of suppliers on the tracking list were signatories to our
Supplier Code. Of the 33 non-signatories, 9 suppliers are in high or
medium risk countries. We continue to work with non-signatories
to gain agreement to our Code, and/or assess whether they have
equivalent standards in place, in order to ultimately decide
whether to continue doing business with them. We have embedded
the Supplier Code into our sourcing process, and have a total of
3,202 suppliers who have agreed to the Supplier Code in 2019,
up from 3,082 in 2018.
We engage a specialist supply chain auditor who undertook 93
external audits on our behalf in 2019. Incidence of non-compliance
triggers continuous improvement reports summarising audit
results, with remediation plans and submission dates agreed
and signed by both the auditor and supplier.
We are committed to proactive engagement with suppliers to
ensure our supply chain reflects the diversity of our communities.
In 2019, we continued to focus on rolling out our supplier diversity
programme. We launched the new RELX Supplier Registration
portal to assist our procurement colleagues in identifying
qualified diverse suppliers and encouraged diverse supplier
inclusion in our sourcing processes. In 2019, 11.9% of our US
spend was with diverse suppliers.
We aim to partner with suppliers which uphold the same
standards we set for ourselves. One of them, BCD Travel, has
maintained their top EcoVadis sustainability rating for four years
in a row.
RELX Annual report and financial statements 2019 | Corporate responsibility overviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 48
6. Supply chain (continued)
2019 OBJECTIVES
Increase the number
of suppliers as Code
signatories
Continue using
audits to ensure
continuous
improvement
in supplier
performance and
compliance
Continue to advance
US Supplier Diversity
and Inclusion
programme
Achievement
§§ 96% core (target 95%)
§§ 100% high risk core (target 100%)
§§ 91% total tracking list (target 85%)
§§ 3,202 total Code signatories (3,082
YE 2018
§§ 93 audits completed
§§ 2 audits scheduled, 6 in progress
§§ Reduced open audit points by 21%
over 2018
§§ 11.9% diversity spend (US rolling
four quarters)
2020 OBJECTIVES
§§ Increase number of suppliers as Code signatories
§§ Continue using audits to ensure continuous improvement in
supplier performance and compliance
§§ Advance 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, diverse network of suppliers
7. Environment
Our environmental targets reflect our environmental impacts and
input from stakeholders and use science-based methodology.
They include a commitment to certify 50% of the business against
the ISO 14001 Environmental Management System standard by
2020. In 2019, we purchased 96% of our electricity from renewable
energy and Renewable Energy Certificates. Full performance data
can be found in the 2019 Corporate Responsibility Report (www.
relx.com/go/crreport).
In the year, we attained an A- grade in CDP’s climate change
programme. RELX is one of the Mayor of London’s London
Business Climate Leaders committed to cutting pollution and
emissions in excess of UK government thresholds. The goal is
to help London, where we are headquartered, to become a zero
carbon city by 2050.
Our Environmental Champions group, employee-led Green Teams
and external 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 2019, 45 sites (56% of key locations) achieved five or more
standards and attained green status. The RELX CFO, our most
senior environmental champion, wrote to all staff on World
Environment Day, sharing our environmental priorities and
recognising environmental achievements across the business.
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 63% of the total market and 49% in energy and fuels.
The €50,000 winner of Elsevier’s 2019 Green and Sustainable
Chemistry Challenge was Ramia Albakain, Associate Professor
at the University of Jordan, who developed a green technique to
remove toxic metal from wastewater, making it safe for
agricultural irrigation and addressing chronic water shortages
due to Jordan’s arid climate.
Achievement
§§ 56% achieved
§§ Achieved through green tariff
purchases in Europe, green-e certified
RECs purchase in the United States,
and GoldPower iRECs in Asia Pacific
§§ Additional five sites certified including
Alpharetta, Richmond, Horsham,
Chennai and Gurgaon
2019 OBJECTIVES
55% of locations to
achieve five or more
RELX Environmental
Standards
Purchase renewable
electricity equal
to 90% of global
consumption
Achieve ISO 14001
Environmental
Management
System (EMS)
certification at three
additional locations
2020 OBJECTIVES
§§ Set new environment targets for 2020-2025
§§ Purchase renewable electricity equal to 100% of global
consumption
§§ Achieve ISO 14001 Environmental Management System
(EMS) certification at 50% of the business by headcount
OUR 2030 VISION
Further environmental knowledge and positive action through
our products and services and, accordingly, conduct our
business with the lowest environmental impact possible
2019 ENVIRONMENTAL PERFORMANCE
Absolute performance
2019 Variance
2018
5% 7,477
7,848
Intensity ratio
(per £m revenue)
2019 Variance
1.00
2018
0% 1.00
68,229
-8% 74,279
8.67 -13% 9.91
17,704
11% 16,004
2.25
5% 2.14
Scope 1 (direct
emissions) tCO2e
Scope 2
(location-based
emissions) tCO2e
Scope 2
(market-based
emissions) tCO2e
Total energy (MWh) 163,628
UK energy (MWh)
Water (m3)
Waste sent to
landfill (t)*
Production
paper (t)
331,913
34,599
* From reporting locations
-9% 179,228
15,050 -16% 18,000
0% 332,490
20.78 -13% 23.92
1.91 -20% 2.40
-5% 44.38
42.15
546 -17%
658
0.07 -22% 0.09
-3% 35,555
4.39
-8% 4.75
RELX Annual report and financial statements 2019 | Corporate responsibility ENVIRONMENTAL TARGETS
Focus area
Climate change
Energy
Waste
Targets 2020
Reduce Scope 1 and 2 location-based carbon emissions by 40% against a 2010 baseline
Reduce energy and fuel consumption by 30% against a 2010 baseline
Purchase renewable electricity equivalent to 100% of RELX’s global electricity consumption
Decrease total waste generated at reporting locations by 40% against a 2010 baseline
Production paper*
Environmental
Management System
90% of waste from reporting locations to be diverted from landfill
100% of RELX production papers, graded in PREPS, to be rated as ‘known and responsible sources’
Achieve ISO 14001 certification for 50% of the business by 2020
Reporting locations achieving five or more RELX Environmental Standards
* All paper we graded in 2019 – 96% of total production stock – was graded 3 or 5 stars (known and responsible sources).
49
2019
Performance
-52%
-41%
96%
-66%
85%
100%
42%
56%
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 2019 Corporate Responsibility Report at www.relx.com/go/CRReport.
2019 investor and other recognition
Constituent of the Ethibel
Sustainability Index
Included in
– Excellence Europe
– Excellence Global
CDP
– Climate programme score:
Green Power Partnership
– National Top 100
A-
– Forest programme score: B
– Water programme score: B
FTSE4Good Index
Included in
– FTSE4Good Global Index
– FTSE4Good UK Index
– FTSE4Good Europe Index
RE100
– Member
Dow Jones Sustainability
Index Europe
– Constituent
ISO 14001
– Certified
STOXX Global ESG
Leaders Indices
– Included
ECPI Indices
– Included
Tortoise Responsibility100
Index
– 6th out of 100
ISS-Oekom Corporate
Responsibility Rating
– Prime status
ESG S&P 1200
– 2nd out of 1200 companies
for ESG performance based on
CSRHub data
The full 2019 Corporate Responsibility Report is available at www.relx.com/go/CRReport
RELX Annual report and financial statements 2019 | Corporate responsibility overviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview
50
RELX Annual report and financial statements 2019 | Financial review
51
Financial review
In this section
52 Chief Financial Officer’s report
58 Principal and emerging risks
RELX Annual report and financial statements 2019 Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 52
Chief Financial Officer’s report
Revenue
Underlying revenue growth 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 £7,874m
(2018: £7,492m), up 5%.
Exhibition cycling effects decreased 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 3%.
Profit
Underlying adjusted operating profit grew at 5%, ahead of
underlying revenue, reflecting the benefit of process innovation
across the Group.
The net impact of acquisitions and disposals decreased adjusted
operating profit by 2%. Currency effects increased adjusted
operating profit by 3%.
Total adjusted operating profit, including the impact of acquisitions
and disposals and currency effects, was £2,491m (2018: £2,346m),
up 6%.
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 5%.
The overall adjusted operating margin of 31.6% was 0.3
percentage points higher than in the prior year. On an underlying
basis, including cycling effects, the margin improved by 0.6
percentage points. Acquisitions and disposals reduced the margin
by 0.3 percentage points and currency effects had no net impact
on the margin.
Nick Luff
Chief Financial Officer
Underlying revenue and adjusted
operating profit growth in 2019
were 4% and 5% respectively,
and adjusted earnings per share
grew at 7% at constant currency.
We have maintained leverage at an
appropriate level and our balance
sheet remains strong, with Return
on Invested Capital of 13.6%.
REVENUE
£m
ADJUSTED OPERATING PROFIT
£m
6,889
5,971
7,341
7,492
7,874
2,114
1,822
2,284
2,346
2,491
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
RELX Annual report and financial statements 2019 | Financial review RELX Annual report and financial statements 2019 | Chief Financial Officer’s report
53
Reported figures
Revenue
Operating profit
Profit before tax
Net profit attributable to RELX PLC shareholders
Net margin
Net borrowings
Earnings per share
Adjusted figures
Operating profit
Operating margin
Profit before tax
Net profit attributable to RELX PLC shareholders
Net margin
Cash flow
Cash flow conversion
Return on invested capital
Earnings per share
2019
£m
2018
£m
Change
Change
at constant
currencies
Change
underlying
7,874
2,101
1,847
1,505
19.1%
6,191
77.4p
2,491
31.6%
2,200
1,808
23.0%
2,402
96%
13.6%
93.0p
7,492
1,964
1,720
1,422
19.0%
6,177
71.9p
2,346
31.3%
2,145
1,674
22.3%
2,243
96%
13.2%
84.7p
+2%
+4%
+3%
+5%
+5%
+7%
+7%
+6%
+8%
+6%
+3%
+8%
+7%
+10%
+7%
RELX 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 2018 we excluded exceptional tax credits, see note 9 on page 145.
Reconciliations between the reported and adjusted figures are set out on page 184. Underlying growth rates are calculated at constant currencies, excluding the results of
acquisitions until twelve months after purchase, and excluding the results of disposals and assets held for sale. Underlying revenue growth rates also exclude exhibition
cycling. Constant currency growth rates are based on 2018 full-year average and hedge exchange rates.
Reported operating profit, after amortisation of acquired
intangible assets and acquisition-related costs, was £2,101m
(2018: £1,964m).
The amortisation charge in respect of acquired intangible assets,
including the share of amortisation in joint ventures, increased
to £295m (2018: £288m), with the impact of acquisitions largely
offset by disposals and assets which have become fully amortised.
Acquisition-related costs were the same as the prior year, at £84m
(2018: £84m).
Adjusted interest expense was £291m (2018: £201m). This
primarily excludes the net pension financing charge of £12m (2018:
£9m). In 2019, the adjusted interest expense includes a charge of
£99m in respect of the early redemption of bonds that were due to
be repaid in October 2022.
Reported net finance costs were £305m (2018: £211m).
The net pre-tax gain on disposals and non-operating items was
£51m (2018: £33m loss) arising largely from the disposal of
certain Legal assets and venture capital investments. These gains
are partly offset by an associated tax charge of £11m (2018:
£14m credit).
Adjusted profit before tax was £2,200m (2018: £2,145m), up 3%.
The reported profit before tax was £1,847m (2018: £1,720m).
The adjusted tax charge was £388m (2018: £465m) including a
credit of £89m in respect of the substantial resolution of certain
historical tax issues. The adjusted effective tax rate was 17.6%
(2018: 21.7%). Excluding the £89m credit, the adjusted effective
tax rate would have been 21.7%, in line with the prior year. 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
ADJUSTED OPERATING PROFIT MARGIN
ADJUSTED CASH FLOW CONVERSION
30.5%
30.7%
31.1%
31.3%
31.6%
94%
96%
96%
96%
96%
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 54
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.
The reported tax charge was £338m (2018: £292m).
The adjusted net profit attributable to RELX PLC shareholders of
£1,808m (2018: £1,674m) was up 8%. Adjusted earnings per share
was up 10% at 93.0p (2018: 84.7p). At constant rates of exchange,
adjusted earnings per share increased by 7%.
The reported net profit attributable to RELX PLC shareholders
was £1,505m (2018: £1,422m).
Cash flows
Adjusted cash flow was £2,402m (2018: £2,243m), up 7%
compared with the prior year and up 4% at constant currencies.
The rate of conversion of adjusted operating profit to adjusted cash
flow was 96% (2018: 96%).
CONVERSION OF ADJUSTED OPERATING PROFIT INTO CASH
YEAR TO 31 DECEMBER
Adjusted operating profit
Depreciation and amortisation of internally
developed intangible assets
Depreciation of right-of-use assets
Capital expenditure
Repayment of lease principal (net)*
Working capital and other items
Adjusted cash flow
Adjusted cash flow conversion
2019
£m
2,491
307
82
(380)
(85)
(13)
2,402
96%
2018
£m
2,346
287
77
(362)
(81)
(24)
2,243
96%
* Excludes repayments and receipts in respect of disposal-related vacant property
and is net of sublease receipts.
Capital expenditure was £380m (2018: £362m), including
£333m (2018: £306m) 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
£307m (2018: £287m). Capital expenditure was 4.8% of revenue
(2018: 4.8%). Depreciation and amortisation was 3.9% of revenue
(2018: 3.8%). These percentages exclude depreciation of leased
right-of-use assets of £82m (2018: £77m) and principal lease
repayments under IFRS 16 of £85m (2018: £81m).
Interest paid was £171m (2018: £155m) with the difference from
adjusted interest expense primarily reflecting the charge on the
early redemption of the 2022 bonds, part of which was non-cash
and part of which was cash paid in January 2020. Tax paid,
excluding tax relief on acquisition-related costs and disposals,
of £483m (2018: £428m) was higher than the current tax charge,
primarily due to the £89m credit discussed above.
Payments made in respect of acquisition-related costs amounted
to £63m (2018: £77m).
Free cash flow before dividends was £1,700m (2018: £1,593m).
Ordinary dividends paid to shareholders in the year, being the
2018 final and 2019 interim dividends, amounted to £842m (2018:
£796m). Free cash flow after dividends was £858m (2018: £797m).
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
Pension recovery payment
Repayment of lease principal (net)
Proceeds from disposals of property,
plant and equipment
Adjusted cash flow
FREE CASH FLOW
YEAR TO 31 DECEMBER
Adjusted cash flow
Interest paid (net)
Tax paid
Acquisition-related costs*
Free cash flow before dividends
Ordinary dividends
Free cash flow post dividends
* Including cash tax relief.
2019
£m
2,724
34
2018
£m
2,555
30
(47)
(56)
(333)
(306)
63
44
(85)
2
77
20
(81)
4
2,402
2,243
2019
£m
2,402
(171)
(483)
(48)
1,700
(842)
858
2018
£m
2,243
(155)
(428)
(67)
1,593
(796)
797
Total consideration on acquisitions completed in the year was
£416m (2018: £978m). Cash spent on acquisitions was £437m
(2018: £960m), including deferred consideration of £24m (2018:
£16m) on past acquisitions and spend on venture capital
investments of £8m (2018: £13m).
Total consideration for the disposal of non-strategic assets
in 2019 was £63m (2018: £45m). Net cash inflow after timing
differences and separation and transaction costs , and including
the disposal of venture capital investments, was £48m
(2018: £5m).
Share repurchases in 2019 were £600m (2018: £700m), with a
further £100m repurchased in 2020 as at 12 February. In addition,
the Employee Benefit Trust purchased shares of RELX PLC to
meet future obligations in respect of share based remuneration
totalling £37m (2018: £43m). Proceeds from the exercise of share
options were £29m (2018: £21m).
RELX Annual report and financial statements 2019 | Financial review RELX Annual report and financial statements 2019 | Chief Financial Officer’s report
55
RECONCILIATION OF NET DEBT YEAR-ON-YEAR
YEAR TO 31 DECEMBER
Net debt at 1 January
Free cash flow post dividends
Net disposal proceeds
Acquisition cash spend (including
borrowings in acquired businesses)
Share repurchases
Purchase of shares by the Employee
Benefit Trust
Other*
Currency translation
Movement in net debt
2019
£m
(6,177)
858
48
(437)
(600)
(37)
(117)
271
(14)
Net debt at 31 December
(6,191)
2018
£m
(5,042)
797
5
(960)
(700)
(43)
12
(246)
(1,135)
(6,177)
* Cash tax relief on disposals, distributions to non-controlling interests, pension
deficit payments, leases , share option exercise proceeds and the net debt impact
of the bond redemption.
Funding
Debt
Net borrowings at 31 December 2019 were £6,191m, an increase of
£14m since 31 December 2018. The majority of our borrowings are
denominated in US dollars and euros, and sterling being stronger
at the end of the year reduced net borrowings when translated into
sterling. Excluding currency translation effects, net borrowings
increased by £285m. Expressed in US dollars, net borrowings at
31 December 2019 were $8,211m, an increase of $337m.
Gross borrowings of £6,414m (31 December 2018: £6,365m) are
comprised of bank and bond borrowings of £6,072m (31 December
2018: £6,005m) and lease liabilities under IFRS 16 of £342m
(31 December 2018: £360m). The fair value of related derivative
net assets was £52m (31 December 2018: £25m), finance lease
receivables totalled £33m (31 December 2018: £49m) and cash
and cash equivalents totalled £138m (31 December 2018: £114m).
In aggregate, these give the net borrowings figure of £6,191m
(31 December 2018: £6,177m).
The effective interest rate on gross bank and bond borrowings
was 4.5% in 2019. Excluding the one-off charge relating to the
early bond redemption it was 2.9%, 0.3 percentage points lower
than the prior year reflecting the benefit of refinancing historical
bonds that had higher rates of interest. As at 31 December 2019,
gross bank and bond borrowings had a weighted average life
remaining of 3.9 years and a total of 46% of them were at fixed
rates, after taking into account interest rate derivatives.
The ratio of net debt (including leases and pensions) to 12-month
trailing EBITDA (adjusted earnings before interest, tax, depreciation
and amortisation) was 2.5x (31 December 2018: 2.4x), calculated
in US dollars. Excluding leases and pensions, the ratio was 2.2x
(31 December 2018: 2.2x).
Liquidity
In March 2019, $950m of dollar denominated fixed rate term debt
was issued with a coupon of 4.0% and a maturity of ten years.
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. In January 2020,
$950m of US term debt maturing in October 2022 was redeemed
early, taking advantage of the make-whole election.
In addition, the Group has access to committed bank facilities
aggregating $3bn with various maturities through to 2024. At
31 December 2019 these facilities were undrawn.
Invested capital and returns
Net capital employed was £9,237m at 31 December 2019 (2018:
£9,435m), a decrease of £186m. The carrying value of goodwill
and acquired intangible assets decreased by £204m. An amount of
£245m was capitalised in the year in respect of acquired intangible
assets and £257m was recorded as goodwill. This increase was
more than offset by the weakening of the dollar against sterling
from the beginning to the end of 2019, and disposals.
RELX TERM DEBT MATURITIES AT 31 DECEMBER 2019
RETURN ON INVESTED CAPITAL
$m
1,568
850
561
561
819
842
761
950
43
0
7
12.7%
13.0%
12.9%
13.2%
13.6%
2020 2021 2022 2023 2024 2025 2026
2027
2028 2029
>2029
2015
2016
2017
2018
2019
Term debt translated at 31 December 2019 exchange rates, stated at par value
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 56
SUMMARY BALANCE SHEET
AS AT 31 DECEMBER
Goodwill and acquired intangible assets*
Internally developed intangible assets*
Property, plant and equipment*,
right-of-use assets* and investments
Net assets held for sale
Net pension obligations
Working capital
Net capital employed
2019
£m
9,012
1,264
695
–
(520)
(1,214)
2018
£m
9,216
1,217
716
(3)
(433)
(1,278)
9,237
9,435
* Net of accumulated depreciation and amortisation.
Development costs of £333m (2018: £304m) were capitalised
within internally developed intangible assets, most notably
investment in new products and related infrastructure
across RELX.
Net pension obligations, i.e. pension obligations less pension
assets, increased to £520m (2018: £433m). There was a net
deficit of £267m (2018: £203m) in respect of funded schemes,
which were on average 95% funded at the end of the year on
an IFRS basis. The higher deficit mainly reflects lower
discount rates in both the UK and US, partly offset by increased
asset values.
The post-tax return on average invested capital in the year
was 13.6% (2018: 13.2%). The increase is largely due to the change
in effective tax rate, discussed on page 53. At an effective tax rate
of 21.7%, return on invested capital would have been 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
2019
£m
2,491
(438)
17.6%
2,053
15,050
13.6%
2018
£m
2,346
(509)
21.7%
1,837
13,924
13.2%
* 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
Reported earnings per share
Ordinary dividend per share
2019
£m
77.4p
45.7p
2018
£m
71.9p
42.1p
Change
+8%
+9%
The reported earnings per share was 77.4p (2018: 71.9p).
The final dividend proposed by the Board is 32.1p per share. This
gives total dividends for the year of 45.7p (2018: 42.1p), 9% higher
than the prior year.
Dividend cover, being adjusted earnings per share divided by the
total interim and proposed final dividends for the year, is 2.0x.
The dividend policy is, subject to currency considerations, to grow
dividends broadly in line with adjusted earnings per share while
maintaining dividend cover of at least two times over the
longer term.
During 2019 a total of 33.5m of RELX PLC shares were
repurchased at an average price of 1,789p. Total consideration
for these repurchases was £600m. A further 2.2m shares were
purchased by the Employee Benefit Trust. During 2019, 33.3m
shares held in treasury were cancelled. As at 31 December 2019,
total shares in issue, net of shares held in treasury and shares
held by the Employee Benefit Trust, amounted to 1,932m. A further
5.0m shares have been repurchased in 2020 as at 12 February.
Distributable reserves and parent company
balance sheet
As at 31 December 2019, RELX PLC had distributable reserves
of £6.8bn. In line with UK legislation, distributable reserves are
derived from the non-consolidated RELX PLC balance sheet.
The consolidated reserves reflect adjustments such as
the amortisation of acquired intangible assets that are not
taken into account when calculating distributable reserves. The
increase in distributable reserves when compared to the prior
year is due to the capitalisation and subsequent capital reduction
of £4bn of the merger reserve, as approved by RELX PLC
shareholders at the 2019 AGM.
The parent company balance sheet net assets are higher than
those of the group due to the investment in RELX Group plc
being carried at value of £18bn, which is not reflected on the
consolidated balance sheet. Additionally the standalone parent
company has few liabilities. The parent company balance sheet
can be found on page 178.
Further information on the distributable reserves can be found
in the parent company financial statements on page 179.
Alternative performance measures
RELX 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 track more clearly the core operational performance
of the Group by separating out items of income or expenditure
relating to acquisitions, disposals and capital items, and by
excluding exceptional tax credits. This provides our investors with
a clear basis for assessing our ability to raise debt and invest in
new business opportunities.
Management uses these financial measures, along with IFRS
financial measures, in evaluating the operating performance
of the Group as a whole and of the individual business segments.
Adjusted financial measures should not be considered in isolation
RELX Annual report and financial statements 2019 | Financial review RELX Annual report and financial statements 2019 | Chief Financial Officer’s report
57
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 184 for reconciliations of adjusted measures.
Accounting policies
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 128 to 174. 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 133
and in the relevant notes to the accounts.
Tax principles
Taxation is an important issue for us and our stakeholders,
including our shareholders, governments, customers, suppliers,
employees and the 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 Board of RELX PLC agrees 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 18
to the financial statements on pages 157 to 162. Financial
instruments are used to finance the RELX businesses and to
hedge transactions. The Group’s businesses do not enter into
speculative transactions.
Capital and liquidity management
The capital structure is managed to support RELX’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, RELX 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, including and excluding pensions and leases, and various
measures of cash flow as a percentage of net debt.
RELX uses the cash flow it generates to fund capital expenditure
required to drive organic growth, to make selective acquisitions
and to provide a growing dividend to shareholders, while retaining
balance sheet strength to maintain access to cost-effective
sources of borrowing. Share repurchases are undertaken to
maintain an efficient balance sheet. Further detail on capital and
liquidity management is provided on pages 157 and 158.
Corporate responsibility
We moved closer in 2019 to achieving our 2015-2020
environmental targets by reaching 96% of electricity needs from
renewable sources, European green tariff, and green-e certified
US and Asian Gold Power renewable energy certificates. We have
reduced Scope 1 and Scope 2 (location-based) carbon emissions
by 52% from a 2010 baseline. We were part of the London Business
Climate Leaders initiative which commits us to taking action to
bring about a zero-carbon London, where we are headquartered.
We also remained a signatory to We Are Still In, joining more
than 2,800 businesses, universities, cities, states and other
organisations, aiming to meet the objectives of the 2016 Paris
Agreement on climate.
We believe our most important environmental impact is in the
environmental knowledge we disseminate through our content,
solutions and events. In the year, we published the latest Lancet
Countdown on health and climate change which tracks 41
indicators. The Elsevier Foundation Green and Sustainable
Chemistry Challenge stimulates innovative chemistry research
that benefits the environment and low-resource communities;
the 2019 €50,000 first prize was awarded to Dr. Ramia Albakain,
Associate Professor at the University of Jordan, for a green
technique to remove toxic metal from wastewater. We also held
World Future Energy Summit with 800 exhibitors and more than
33,000 visitors from 170 countries, showcasing innovation in areas
ranging from energy to water and waste.
Our Supplier Code of Conduct requires suppliers to meet the same
standards we set for ourselves. In 2019, 91% of our key suppliers
were signatories to the Supplier Code. Intertek conducted 93
audits including nine second tier audits, and reduced open audit
points by 21% over 2018. Nearly 12% of our US spend was from
diverse suppliers.
For further details on Corporate Responsibility please see pages
38 to 49.
Nick Luff
Chief Financial Officer
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 58
Principal and emerging risks
RELX 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 and emerging risks facing the business,
which have been assessed by the Audit Committee and Board,
are described below. The directors confirm this process is robust
and includes consideration of risks, including emerging risks,
that could threaten RELX’s business models, future performance,
solvency, liquidity or reputation.
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 RELX Business Overview and Market Segments sections.
Our assessment of RELX’s prospects and viability is on page 84.
Our approach to the promotion of human rights and to managing
corporate responsibility, environmental and other non-financial
risks is set out in the RELX Business Overview and Market Segments
sections and the separate Corporate Responsibility Report.
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.
EXTERNAL RISKS
Risk
Description and impact
Mitigation
Economy
and market
conditions
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, international trading relations,
political uncertainties, epidemics, acts of war and civil
unrest, and levels of government funding available to
our customers.
Intellectual
property
rights
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.
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 and recurring revenue basis, which are
important to our customers’ effectiveness and efficiency. We
operate diversified businesses in terms of sectors, markets,
customers, geographies and products and services. We have
extended our position in long-term global growth markets
through organic new launches supported by the selective
acquisition of small 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. In response to specific
uncertainties, our businesses engage in scenario planning
and develop contingency plans where relevant.
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.
RELX Annual report and financial statements 2019 | Financial review 59
EXTERNAL RISKS
Risk
Description and impact
Mitigation
Data
resources
and data
privacy
Paid
subscriptions
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. The disruption or loss of
data sources, either because of data privacy laws 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. Examples of data
privacy laws relating to internet communications, privacy
and data protection, e-commerce, information governance
and use of public records include the European Union’s
General Data Protection Regulation (‘GDPR’) and the
California Consumer Privacy Act (‘CCPA’), as well as evolving
regulation in many jurisdictions where RELX operates.
Compromise of data privacy, through a failure of our cyber
security measures (see ‘Cyber security’ below), other data
loss incidents or failure to comply with requirements for
proper collection, storage and transmittal of data, by
ourselves or our third-party service providers, may damage
our reputation and expose us to risk of loss, fines and
penalties, litigation and increased regulation.
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 revenue from paid subscriptions.
We use a mix of publicly available, proprietary, contributory
and licensed 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 established data privacy principles, governance
structures and control programmes designed to ensure
data privacy requirements are met and which protect data
and individual’s privacy across all jurisdictions where we
operate. We have put in place and test response plans to
manage incidents where data privacy might be compromised.
We embed our data privacy principles in agreements with
third parties.
We have assurance programmes to monitor compliance and
conduct training and awareness programmes.
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.
In particular, the number of articles we publish on an author
pays, open access basis, and the associated revenues, are
growing rapidly. 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 develop our
research systems to provide capabilities to manage different
payment models. We ensure vigilance on plagiarism and the
long-term preservation of research findings.
STRATEGIC RISKS
Risk
Description and impact
Mitigation
Customer
demand for
our products
Market
Disruption
Acquisitions
Our businesses are dependent on the continued demand by
our customers for our products and services and the value
placed on them. Failure to deliver enhanced value to our
customers 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 and dynamic
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 agile development methods and
robust customer discovery processes and invest in new and
enhanced technologies, to provide content and innovative
solutions that help our customers achieve better outcomes
and enhance productivity.
We gain insights into our markets, evolving customer needs,
the potential application of new technologies and business
models, and the actions of competitors and disrupters.
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.
RELX Annual report and financial statements 2019 | Principal and emerging risksMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 60
OPERATIONAL RISKS
Risk
Description and impact
Technology
and business
resilience
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, networks or supporting
infrastructure experience a significant failure, interruption
or security breach.
Cyber
security
Our businesses maintain online databases and platforms
delivering our products and services, which 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.
Mitigation
We have established procedures for the protection of our
businesses and technology assets. These include the
development and testing of business continuity plans,
including IT disaster recovery plans and back-up delivery
systems, to reduce business disruption in the event of major
technology or infrastructure failure, terrorism or adverse
weather incidents.
We have established security programmes with the aim of
ensuring that data is protected, our business infrastructures
continue to operate 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 technological 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.
We provide regular training and communication initiatives to
establish and maintain awareness of risks at all levels of our
businesses. We have appropriate incident response plans
to respond to threats and attacks. We maintain appropriate
information security policies and contractual requirements
for our businesses and run programmes monitoring the
application of our data security policies by third-party
service providers. We use independent internal and
third-party auditors to test, evaluate, and help enhance our
procedures and controls.
Supply chain
dependencies
Talent
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.
We select our vendors with care and establish contractual
service levels that we closely monitor, including through key
performance indicators and targeted supplier audits and
security assessments. We have developed business
continuity plans to reduce disruption in the event of a major
failure by a vendor.
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 such people could adversely affect
our business performance. Failure to recruit and develop
talent regardless of gender, race, national origin or other
characteristics could adversely affect our reputation and
business performance.
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 Inclusion and Diversity Policy fosters a diverse
workforce and environment that respects all individuals
and their contributions.
RELX Annual report and financial statements 2019 | Financial review 61
FINANCIAL RISKS
Risk
Pensions
Tax
Treasury
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 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 52 we engage with tax
authorities and international organisations. We continue
to monitor further developments arising from the OECD
process and consider potential impacts of proposals under
various scenarios. 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 are described
in the Chief Financial Officer’s report on pages 52 to 57. The
approach to the management of treasury risks is described
in note 18 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 US scheme is closed to future
accruals. The UK scheme has been closed to new hires since
2010. The members who continue to accrue benefits now
represent a small portion of the overall UK based workforce.
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 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’) is continuing to explore changes to the
way in which profits are allocated for tax purposes between
jurisdictions and other reforms. As a result of the OECD’s
work and other 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 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.
REPUTATIONAL RISKS
Risk
Ethics
Description and impact
Mitigation
As a global provider of professional information solutions
to the STM, risk & business analytics, legal and exhibitions
markets we, our employees and major suppliers are
expected to adhere to high standards of integrity and
ethical conduct, including those related to anti-bribery and
anti-corruption, sanctions, competition and principled
business conduct. A breach of generally accepted ethical
business standards or applicable laws could adversely
affect our business performance, reputation and
financial condition.
Our Code of Ethics and Business Conduct is provided to every
employee and is supported by training and communication.
It encompasses such topics as competing fairly, prohibiting
corrupt business practices, fair employment practices
and encouraging open and principled behaviour. We have
well-established processes for monitoring, reporting
and investigating instances of unethical conduct. Our
major suppliers are required to adhere to our Supplier
Code of Conduct.
The Strategic Report, as set out on pages 2 to 61 has been approved by the Board of RELX PLC.
By order of the Board
Henry Udow
Company Secretary
12 February 2020
Registered Office
1-3 Strand
London
WC2N 5JR
RELX Annual report and financial statements 2019 | Principal and emerging risksMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 62
RELX Annual report and financial statements 2019 | Governance
63
Governance
In this section
64 Board Directors
66 RELX Senior Executives
68 Chair’s introduction to
corporate governance
70 Corporate Governance Review
85 Report of the Nominations Committee
88 Directors’ Remuneration Report
112 Report of the Audit Committee
115 Directors’ Report
RELX Annual report and financial statements 2019 Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 64
Board Directors
Executive Directors
Non-Executive Directors
Erik Engstrom (56)
Chief Executive Officer
Sir Anthony Habgood (73)
Chair
R N C
Appointed: Chief Executive Officer of RELX
since November 2009. Joined as Chief
Executive Officer of Elsevier in 2004.
Other appointments: Non-Executive Director
of Smith & Nephew plc and Bonnier Group.
Past appointments: Prior to joining 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: Chair of Preqin Holding
Limited and Deputy Chair of RG Carter
Holdings Limited.
Past appointments: Previously was Chair of
the Court of the Bank of England, 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
Adrian Hennah (62)
Non-Executive Director
Chair of the Audit Committee
A N 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
Nick Luff (52)
Chief Financial Officer
Appointed: September 2014
Other appointments: Non-Executive Director
of Rolls-Royce Holdings plc.
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
Wolfhart Hauser (70)
Non-Executive Director
Senior Independent Director
Chair of the Remuneration Committee
R N C
Appointed: April 2013
Other appointments: Non-Executive Director
of Associated British Foods plc.
Past appointments: Chair of FirstGroup plc
until July 2019. 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
Charlotte Hogg (49)
Non-Executive Director
C
Appointed: December 2019
Other appointments: Executive Vice President
and Chief Executive Officer for the European
Region of Visa Inc. Executive Director of Visa
Europe Limited. Non-Executive Director of UK
Finance and NowTeach.
Past appointments: Chief Operating Officer at
the Bank of England. Before that was Head of
Retail Banking for Santander UK, Managing
Director UK and Ireland for Experian plc, and
held senior roles at Morgan Stanley in New
York and London.
Nationality: British and American
RELX Annual report and financial statements 2019 | Governance RELX Annual report and financial statements 2019 | Board Directors
65
Marike van Lier Lels (60)
Non-Executive Director
Workforce Engagement Director
N C
Linda Sanford (67)
Non-Executive Director
R C
Suzanne Wood (59)
Non-Executive Director
A C
Appointed: July 2015
Other appointments: Member of the
Supervisory Boards of NS (Dutch Railways),
Dura Vermeer, Post NL and Innovation Quarter.
Past appointments: Member of the
Supervisory Boards of TKH Group NV, Royal
Imtech NV, Maersk BV, KPN NV, USG People
NV and Eneco Holding 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: December 2012
Other appointments: An independent Director
of Consolidated Edison, Inc, Pitney Bowes, Inc
and Interpublic Group of Companies, Inc.
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.
A consultant to The Carlyle Group from 2015 to
July 2018. 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 2017
Other appointments: Senior Vice President
and Chief Financial Officer of Vulcan Materials
Company.
Past appointments: Served as Group Finance
Director of Ashtead Group plc from 2012 to
2018. 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
Robert MacLeod (55)
Non-Executive Director
R N C
Andrew Sukawaty (64)
Non-Executive Director
A C
Appointed: April 2016
Other appointments: Appointed as Chief
Executive of Johnson Matthey plc in June 2014
after five years as Group Finance Director.
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 2019
Other appointments: Chairman of Inmarsat,
Director of HG Capital LLP and Corten Advisors
UK LLP.
Past appointments: He was formerly a
Non-Executive Director and the Senior
Independent Director of Sky plc between 2013
and 2018. Previously he was Chairman of Ziggo
NV, Xyratex Group Ltd, and Telenet Group
holdings NV, and deputy Chairman of O2 plc.
He also served as a Non-Executive Director
of Telefonica Europe and Powerwave
Technologies Inc, and additionally as Chief
Executive of Inmarsat plc, Sprint Corp and NTL
Group Ltd.
Nationality: American
Board Committee membership key
A Audit Committee
R Remuneration Committee
N Nominations Committee
C Corporate Governance Committee
Committee Chair
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview
66
RELX Senior Executives
Mark Kelsey
Chief Executive Officer
Risk & Business Analytics
Kumsal Bayazit
Chief Executive Officer
Scientific, Technical
& Medical and Chair,
RELX Technology Forum
Mike Walsh
Chief Executive Officer
Legal
Hugh M Jones IV
Chief Executive Officer
Exhibitions
Joined in 1983. Appointed to
current position in 2012.
Joined in 2004. Appointed
to current position in 2019.
Joined in 2003. Appointed
to current position in 2011.
Joined in 2011. Appointed
to current position in 2020.
Has held a number of senior
positions across the Group over
the past 30 years. Previously
Chief Operating Officer and
then Chief Executive Officer
of Reed Business Information.
Studied at Liverpool University
and received his MBA from
Bradford University.
Previously President, Exhibitions
Europe, Chief Strategy Officer,
RELX, and Executive Vice
President of Global Strategy
and Business Development for
LexisNexis. 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 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.
Previously Group Managing
Director, Accuity, ICIS, Cirium,
and EG within Risk & Business
Analytics. Prior to that was Chief
Executive Officer, Accuity. Holds
an MBA from the Ross School
of Business at the University of
Michigan and is a graduate of
Yale University.
RELX Annual report and financial statements 2019 | Governance RELX Annual report and financial statements 2019 | RELX Senior Executives
67
Gunjan Aggarwal
Chief Human Resources Officer
Henry Udow
Chief Legal Officer and
Company Secretary
Jelena Sevo
Chief Strategy Officer
Youngsuk “YS” Chi
Director of RELX Corporate
Affairs and Chair, Elsevier
Joined in 2017. Appointed
to current position at that time.
Joined in 2011. Appointed
to current position at that time.
Joined in 2011. Appointed
to current position in 2019.
Joined in 2005. Appointed to
current position in 2011.
Previously head of Human
Resources for Ericsson’s global
media business in California and
for Ericsson North America. Prior
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 Director of Tax
Markets for LexisNexis UK.
Prior to that, various senior
management roles in LexisNexis
and Elsevier. Previously a
consultant at Bain & Co and Booz
Allen Hamilton. Holds an MBA
from Harvard Business School,
a master’s degree in law from
Georgetown University and a
degree in law from the University
of Belgrade.
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.
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 68
Chair’s introduction to corporate governance
High standards of corporate
governance underpin long-term,
sustainable value creation.
In 2019, we continued to evolve
our corporate governance
reporting in response to the
requirements of the updated
UK Corporate Governance Code.
Our governance framework
The Board recognises the importance of maintaining high
standards of corporate governance, which underpin RELX’s
ability to deliver long-term value and sustainable success for
our members, provides confidence to our many and varied
stakeholders that the governance of the Group is appropriate
for its size and profile as a UK listed company, and supports our
culture of acting with integrity in all we do. In 2019, we continued to
evolve our corporate governance reporting to respond to changing
requirements in the UK, driven principally by the new UK
Corporate Governance Code (Code) which applied to RELX from
the start of the year, as well as other legislative requirements
which now apply to large UK companies.
Stakeholder engagement
A central theme of the new requirements has been an increased
emphasis on the relationships between a company and a wide
range of its stakeholders, its reporting of these and how the Board
has discharged its duty to promote the success of the Company
having regard, particularly, to certain matters set out in Section
172 of the Companies Act 2006 (the Act).
Constructive, transparent and open engagement with our
stakeholders is imperative in ensuring that the Board’s
discussions and decision-making are informed, considered
and balanced. The Board has historically recognised and
acknowledged that stakeholder relationships, such as those with
our customers, employees, suppliers and the communities in
which we operate, are an important consideration at all levels
of business interaction and conduct across an organisation of
our size and diversity. However, we have taken the opportunity
to assess and, where necessary, supplement our corporate
governance arrangements to ensure that consideration of our
stakeholders remains appropriate as the Group continues to
grow and develop its business.
The Board appointed Marike van Lier Lels as Workforce
Engagement Director with effect from 1 January 2019. The
breadth of Marike’s engagement with our workforce has been
wide, and she has provided periodic updates to the Board on
engagement activities and outcomes, which the Board has
considered in its discussions. Further information relating to
the programme of activity undertaken by Marike as Workforce
Engagement Director can be found on page 76.
UK Corporate Governance Code compliance
As a premium listed company, RELX is required to describe how
it has complied with the principles of the Code during the year.
Details of how we have done so are set out in this report and those
of the Board Committees which follow. RELX is also required
to report on whether it has chosen to comply with each of the
provisions of the Code, or alternatively explain why it has chosen
not to do so.
For 2019, the Board deemed it to be in the interests of the Group’s
stakeholders to comply with each of the provisions of the Code,
with the exception of provision 19 (length of tenure of the Chair)
and provision 38 (alignment of executive director pension
contribution rates with those available to the workforce). For
an explanation regarding executive directors’ pension benefits,
please see page 70.
Having been appointed Chair in June 2009, I have served for over
ten years. As the Group explained in its 2018 Annual Report and
Accounts, the Board felt it appropriate and in the long-term
interests of the Group’s stakeholders that I remain in the role to
ensure continuity of Board leadership, following the corporate
simplification which completed in September 2018 with RELX PLC
becoming the sole parent company of the Group. As corporate
governance processes implemented upon completion of the
corporate simplification have now been fully embedded, I have
decided that this is the year to retire from the Board. The succession
process is being led by the Senior Independent Director, Wolfhart
Hauser, and overseen by the Nominations Committee.
Culture
As part of its leadership role, the Board is responsible for
developing a corporate culture across RELX which promotes
integrity, transparency and an understanding of RELX’s
responsibilities to its stakeholders and the communities in which
it operates. In addition, the Board recognises the importance
of its role in setting and monitoring the Group’s culture, and
embedding supporting policies, processes and training
throughout the Group . The Code of Ethics and Business Conduct
(Code of Ethics), clearly sets out the standards expected of
employees, as well as third parties who represent us, and is
available on the Company’s website at www.relx.com. During the
year, the Board spent considerable time receiving regular updates
from the Chief Human Resources Officer, Workforce Engagement
Director and Chief Compliance Officer on the alignment between
the Group’s culture and values, and how these support its strategy
and performance.
Inclusion and diversity
The Board understands the importance of inclusion and diversity.
Since our 2018 Annual Report, the Company has updated its
Board Diversity Policy, which is applicable to the RELX PLC Board.
The policy recognises the benefits that inclusion and diversity
can bring to the effectiveness of Board discussions through
incorporating different perspectives and ideas. The Board
believes that appointments to it should be made on merit, with
the benefits of diversity being considered as part of succession
planning and Board composition review . Therefore, with respect
to inclusion and diversity, no formal targets have been set by the
Board in respect of its membership.
RELX Annual report and financial statements 2019 | Governance RELX Annual report and financial statements 2019 | Chair’s introduction to corporate governance
69
The Board also approved an updated Inclusion and Diversity
Policy, now applicable across the Group. It seeks to ensure that
RELX meets corporate responsibility expectations and is a place
where all employees feel valued, and that inclusion and diversity
is built into the Group’s appointment and promotion processes.
The Board also welcomes the Hampton-Alexander Review,
which proposes to increase Board and senior leadership
gender diversity.
This, along with the wider aspects of inclusion and diversity, is
considered by the Nominations Committee when reviewing the
balance and composition of the Board and the structuring of talent
development initiatives across the Group.
Board changes
A number of changes have continued the progressive evolution
of the Board in 2019. Following the conclusion of the 2019 Annual
General Meeting, Ben van der Veer and Carol Mills stepped down
from the Board. I would like to thank them both for their wise
counsel, support and contribution during their period of service.
Andrew Sukawaty joined the Board, which is already benefiting
from his considerable international experience in the technology
sector, his significant and recent listed company experience,
and his understanding of the US business and governance
environment. In December, the Board also appointed Charlotte
Hogg as a Non-Executive Director. She brings a wealth of strategic
and operational experience, and her exposure to big data
technology companies is particularly pertinent to our business.
Adrian Hennah will not seek re-election at our 2020 Annual
General Meeting, as he will by that time have served for nine years
as a valued member of the Board and its Committees. I would
like to take this opportunity to thank Adrian for his considerable
contribution to the Board and he leaves RELX with our very best
wishes for the future.
Board effectiveness
As Chair, I am responsible for ensuring that the effectiveness
of the Board, its Committees and each individual Director is
evaluated annually. For 2019, an internal evaluation process was
carried out. The outcome of the evaluation confirmed that the
Board and Committees continue to operate effectively, and that
all of our Directors continue to demonstrate commitment to their
role. Further information relating to the Board evaluation can be
found on page 81 of this report.
Sir Anthony Habgood
Chair
12 February 2020
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 70
Corporate Governance Review
Overview
Corporate governance compliance statements
The Board remains committed to high standards of corporate
governance. During the year, its principal focus in this area was
on ensuring the implementation of processes and completion of
actions which allowed the Company to address the requirements
of the 2018 UK Corporate Governance Code (the Code), which
applied to it from 1 January 2019.
As a result, the Board’s annual programme was updated,
particularly with regard to its oversight of the Group’s
engagement with its key stakeholders, consideration of their
views, assessment of RELX’s culture and its alignment with
our purpose, values and strategy, and review of the Group’s
workforce policies.
It has been supported throughout the year by its Committees,
which have also taken on new responsibilities under the Code.
A summary of how each Committee has approached these can
be found in the reports on pages 85 to 114 . An explanation of how
the Company has applied each principle of the Code related to
remuneration is set out in the Directors’ Remuneration Report
on pages 88 to 111.
This Review also contains an explanation of how the Directors of
the Company have discharged their duty under the Companies
Act 2006 (the Act) to promote the success of the Company having
regard, particularly, to certain matters set out in Section 172 of the
Act. The Board’s Section 172 Statement can be found on pages 74
to 78 and is incorporated into the Strategic Report by reference.
The Board has been mindful that it must fulfil this duty to promote
the success of the Company when assessing the principles and
provisions of the Code, and in deciding how RELX should follow
and apply these.
Following the corporate simplification which took place in 2018,
the shares of RELX PLC are traded through its primary listing on
the London Stock Exchange and its secondary listing on Euronext
Amsterdam, whilst its securities are also traded on the New York
Stock Exchange under its American Depositary Share programme.
The Board has therefore implemented standards of corporate
governance and disclosure policies applicable to a UK incorporated
Company, with listings in London, Amsterdam and New York.
The Company and its Directors are required by the Code to make
certain statements in relation to provisions contained within it.
The locations of those statements are as follows:
§§ Pages 5, 12 to 33, 58 to 61 and 71 to 72 for a description of how
opportunities and risks to the future success of the business
have been considered and addressed, the sustainability of
RELX’s business model and how its governance contributes
towards the delivery of its strategy
The 2018 UK Corporate Governance Code (the Code) applied to
the Company during the year.
The Company, which has its primary listing on the main
market of the London Stock Exchange, has complied with
the provisions of the Code throughout the year ended
31 December 2019, with the exception of provision 19 (length
of tenure of the Chair) and provision 38 (alignment of executive
director pension contribution rates with those available to the
workforce). For an explanation regarding the tenure of our
Chair, please see pages 68 and 87.
The value of pension benefits for current Executive Directors
has decreased over the last several years, prior to the Code
coming into force. As part of the proposed new remuneration
policy, the Committee is proposing a revised pension policy for
newly appointed Executive Directors which is aligned to the
general workforce. Existing Executive Directors will transition
from their current arrangements to the level of pension
benefits provided under the Company’s regular defined
contribution plans (currently capped at 11% in the UK) by the
end of 2022, in line with the recommendations of the
Investment Association.
The pension benefits received by the Executive Directors in
2019 have been in line with the terms of our shareholder
approved Directors’ Remuneration Policy. Notwithstanding
provision 38 of the UK Corporate Governance Code, the Board
viewed it as appropriate that there be a phased transition of
existing pension benefits for Executive Directors to 2022.
A description of how the Company has applied the main
principles of the Code is set out on pages 71 to 114.
A copy of the Code can be found on the FRC website at
www.frc.org.uk
§§ Page 73 for an explanation of the Board’s activities in assessing
and monitoring RELX’s culture
§§ Page 45 for an explanation of RELX’s approach to investing in
and rewarding its workforce
§§ Pages 74 to 78 for a description of how the interests of RELX’s
key stakeholders and the matters set out in Section 172 of the
Act have been considered in Board discussions and
decision-making
§§ Page 58 for confirmation that the Directors have carried out a
robust assessment of the emerging and principal risks facing
RELX, including a description of its principal risks, what
procedures are in place to identify emerging risks, and an
explanation of how these are being managed or mitigated
§§ Page 83 for confirmation that the Annual Report and Accounts
is fair, balanced and understandable and provides the
information necessary for shareholders to assess RELX’s
position and performance, business model and strategy
§§ Page 84 for an explanation of how the Directors have
assessed the prospects of RELX, taking into account its
current position and its emerging and principal risks
§§ Page 83 for the statement on the status of RELX as a
going concern
RELX Annual report and financial statements 2019 | Governance
Application of UK Corporate Governance
Code Principles
Our governance framework
RELX has in place a corporate governance framework of
processes, leadership bodies and supporting documentation
to ensure that it is appropriately led, directed and controlled. It
brings clarity to those who work for RELX, both in respect of what
they are expected to deliver through the setting of strategic and
financial objectives, and the values, standards and principles
that they must act in accordance with in the course of delivering
those objectives.
This framework also helps our organisation to run efficiently
by giving clear instructions on decision-making processes and
authorities, allowing effective use of our resources whilst
facilitating appropriate levels of oversight and involvement for
the Board and its Committees. It exists to support our businesses
as they grow and develop. It therefore reflects a number of
considerations. These include the appropriate implementation of
systems and processes which define the rights, responsibilities
and accountabilities of individuals throughout the Group,
compliance with statutory and regulatory requirements that apply
to RELX, the protection of our reputation and meeting our own
expectations to act with integrity in all we do. It also seeks to allow
our four business area organisations to operate with the speed,
agility and flexibility required to address the needs of their
customers in a timely and responsive manner.
As set out on pages 71 to 72, each part of the framework plays a
significant part in delivering the Group’s strategy.
Our purpose, strategy, values and culture
Purpose
RELX is a global provider of information-based analytics and
decision tools for professional and business customers. Our
primary corporate purpose is to add value for our professional
customers, enabling them to make better decisions, get better
results and be more productive. Specifically, we are focused on
helping our customers further science and health, prevent fraud,
promote the rule of law and justice and bring together business
communities to learn about markets, source products and
complete transactions. In pursuing this purpose, we are mindful
of a wide range of stakeholders, including, but not limited to,
employees, customers, suppliers and business partners, and
the communities in which we operate, as well as providing a
return for shareholders that permits us to attract capital and
further invest in the future.
71
Strategy
Our number one strategic priority is the organic development
of increasingly sophisticated information-based analytics and
decision tools that deliver enhanced value to professional
business customers across the industries that we serve. We aim
to achieve leading positions in long-term global growth markets
and leverage our skills, assets and resources across RELX,
both to build solutions for our customers and to pursue cost
efficiencies. We are systematically migrating all of our
information solutions across RELX towards higher value-add
decision tools, adding broader data sets, 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 business. Our products
often account for less than 1% of our customers’ total cost base,
but we can have a significant and positive impact on the economics
of the remaining 99%. Our objective is to continue to enhance the
value that we deliver to our customers and over time to keep the
growth of our own total cost base below our rate of revenue
growth on an underlying basis.
Values
We operate in an open, honest and principled way as outlined
in our Code of Ethics and Business Conduct and require our
suppliers to meet the same standards. We believe in doing the
‘RIGHT’ thing: Respecting each other, Incorporating ethics into
all our actions, Growing our business with integrity, Holding
ourselves and each other accountable, and taking the Time to
ask questions and report concerns.
Culture
As an information-based analytics and decision tool provider,
our corporate culture is fact based, data-driven and analytical.
We are transparent and non-political in our decision-making.
We prioritise corporate responsibility and value acting with
integrity, benefiting from inclusiveness and diversity and being
passionate about remaining focused on customer outcomes.
Our culture encourages community engagement and
environmental responsibility.
Board leadership
In line with the Board’s responsibility for overall strategic
direction, strategy related issues are discussed at Board
meetings. These regular discussions are supported by a
dedicated annual strategy review process, which holistically
assesses RELX’s strategic position and its key strategic options.
The Board routinely discusses potential opportunities for growth,
including through its review of the Group’s products and markets
during its strategy review. In addition, the Board frequently
receives presentations from senior management leaders and
RELX product specialists, during deep dives into the Group’s
individual business units or other areas which are regarded as
being of strategic importance.
RELX Annual report and financial statements 2019 | Corporate Governance ReviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 72
The Board plays a central role within our governance framework,
which allows it to discharge its statutory duty under section 172 of
the Act to promote the long-term sustainable success of RELX.
Through the schedule of matters reserved for its decision making,
the Board provides the Group with leadership, approves the
annual budget ensuring that necessary resources are in place for
the Company to meet its objectives, and sets and approves RELX’s
strategy. It also sets supporting financial and non-financial
targets, and the purpose, strategy, values and culture of the
Group, as described in this report.
Also reserved for the Board’s decision-making are other matters
which are deemed material to either the delivery of strategy,
or RELX’s future financial performance. These include the
approval of material acquisitions, major capital expenditure and
investment, the Group’s financial statements and its dividend
policy. The Board also approves RELX’s Operating and
Governance Principles document, which serves as a first
reference point for management, and explains the relationship
between risk, internal policies and control procedures as they
apply across the Group. Our control procedures follow the three
lines of defence model as set out on page 82.
Our Committees support the Board in delivering the Group’s
strategy. The work of the Remuneration Committee ensures that
our executive and senior management teams are appropriately
incentivised to deliver RELX’s strategic objectives, and also
that the Group can retain its best talent to deliver these. Our
Nominations Committee oversees that there is a healthy and
diverse pipeline of talent in place for those positions deemed
critical to strategy delivery. It also reviews the composition of
the Board to ensure that it has the right balance of skills to set
an effective strategy, provide appropriate levels of constructive
challenge and oversight of management in implementing its
delivery, and review performance against agreed objectives.
The Audit Committee, through reports from management,
internal audit and the external auditor, provides independent
assurance that business processes which underpin the delivery of
our strategy operate as intended, are fit for purpose, and generate
reliable management information. This ensures that decisions
made by the Board in respect of strategy are taken on the basis of
correct information and assumptions. The Audit Committee also
reviews the process by which risks to the delivery of strategy are
continuously monitored, assessed and mitigated.
The Board also has a major role in setting RELX’s values through
its approval of the Code of Ethics, and ensuring that these support
and are aligned with delivery of the approved strategy. It considers
the Company’s key stakeholders in its decision-making, as set out
on pages 74 to 78, and ensures that the Group’s workforce policies
and practices support its long-term sustainable success. It also
reviews, provides direction on and approves annually our
extensive Corporate Responsibility programme, RE Cares.
Further detail on our RE Cares programme, and the way in which
it allows us to contribute to wider society, including through our
Unique Contributions, is set out on pages 46 and 47.
Board induction and development
The Chair 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 individual requirements based on knowledge
and experience. It includes meetings with members of the Group’s
Executive Directors and Senior Management teams, and visits
to the offices of the Group’s main business areas in order to
understand how they operate. It also includes the provision of a
comprehensive briefing pack which contains information on the
Group’s businesses, as well as other information to assist the
Directors in performing their duties.
External appointments
The Nominations Committee assesses the external commitments
of each Board member to ensure that they have the time to
properly fulfil the responsibilities to RELX which come with that
position. When receiving recommendations from the Nominations
Committee for the appointment of any new Non-Executive
Director, the Board always takes into account other demands on a
potential Director’s time. Following a review by the Nominations
Committee, the Board has noted the changes in external
appointments of the Non-Executive Directors during the year and
does not perceive these to have any impact on their independence
or responsibilities to the Company.
Non-Executive Director appointment letter
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 serve
for a third period of three years. The Non-Executive Director letter
of appointment sets out the expected time commitment required
by the Company from Non-Executive Directors. The notice period
applicable to the Non-Executive Directors is one month.
Conflicts of interest
The Company’s Articles of Association allow the Board to review
and authorise situations where a Director has an interest that
conflicts, or may possibly conflict, with those of the Group, and
further to impose any conditions on that authorisation. The Board
has in place formal procedures for managing and authorising
actual or potential conflicts of interest.
Board Committees
The governance framework also enables the Board to delegate a
number of other responsibilities to its four principal Committees,
allowing it time to focus on key matters. The responsibilities
are set out within the Terms of Reference for each Committee,
which can be found on our website at
www.relx.com. The
membership and activities of the Committees are described on
pages 85 to 114.
Delegated Authorities
There are additionally a number of approved delegated authorities
in place from the Board to the Chief Executive Officer and other
senior executives which relate principally to the day-to-day
management of the business. The Executive Leadership team
supports the Chief Executive Officer in the performance of his
duties. Further delegated authorities and rules applicable to each
Business Area are overlayed and approved at that level.
RELX Annual report and financial statements 2019 | Governance 73
Board Committees
The structure of the Board’s four main Committees and a summary of their key responsibilities are set out below. Each Committee
has its own Chair who reports back to the Board on its activities. Details on how these Committees have addressed their
responsibilities are set out on pages 85 to 114. All of the Committees have written Terms of Reference, which are available on our
website,
www.relx.com.
Board Committees are principally supported by the Chief Executive Officer, Chief Financial Officer, Chief Legal Officer & Company
Secretary, and the Chief Human Resources Officer, although senior managers within the Group are invited to attend meetings where
appropriate. The Board’s annual programme and the agendas for the Committees are prepared by their respective Chairs with
support from the Company Secretary.
The Board
Audit Committee
Responsible for the oversight
of financial reporting, risk
management and internal
control policies, and the
effectiveness of the internal
and external audit processes.
The Committee comprises only
independent Non-Executive
Directors.
Remuneration Committee
Responsible for approving the
remuneration policy for, and
setting the remuneration of,
the Group’s Executive Directors,
the Chair, and Senior Executives
below Board level. The
Committee comprises only
Non-Executive Directors.
Nominations Committee
Responsible for keeping under
review the composition of the
Board and its Committees; the
recruitment of new Directors;
ensuring orderly succession
plans for both the Board and
senior management; and
reporting on the Board
evaluation, and inclusion and
diversity. The Committee
comprises only Non-Executive
Directors.
Corporate Governance
Committee
Responsible for developing and
recommending corporate
governance principles to the
Board; reviewing ongoing
developments and best practice
in corporate governance, and
monitoring the structure and
operation of the Board
Committees. The Committee
comprises only Non-Executive
Directors.
Report of the Audit
Committee page 112
Directors’ Remuneration
Report page 88
Report of the Nominations
Committee page 85
The 2018 UK Corporate Governance Code
We have explained the Board’s programme of activities for 2019
in more detail on pages 74 and 75. This programme was refreshed
to ensure that it considered and addressed the requirements of
the Code.
Our culture
During the year, the Board reviewed and considered the Group’s
culture, and was able to satisfy itself that it supported and was
aligned with its purpose, strategy and values. In order to assist
its assessment, the Board received a presentation from the Chief
Human Resources Officer, which highlighted the role of the
Code of Ethics in contributing to the culture of the Group, and
summarised the metrics that RELX uses to monitor culture,
including voluntary employee turnover and demographics by
gender, tenure, age and wider diversity characteristics. It also
confirmed that pay equity programmes were monitored to ensure
that they aligned with RELX’s core pay philosophy. The Board
reviewed and discussed the results of the most recent
Group-wide employee opinion survey, and received feedback
from the Group’s Workforce Engagement Director on employees’
views and perspectives regarding how the Group operates,
including its activities and culture. Further detail on the
Workforce Engagement Programme and its outcomes can
be found on page 76.
The Board also received a presentation from the Chief
Compliance Officer on workforce concerns submitted during
the year in confidence. This provided the Board with oversight
of the number and type of breaches of our values and required
standards of conduct, as set out by the Board in the Code of Ethics.
Workforce Policies
During the year, the Board placed a significant focus on its review
of RELX’s approach to inclusion and diversity. Following a review
of this area by both the Nominations Committee and the Board,
updated inclusion and diversity policies, separately applicable
to each of the Board and the rest of the Group, were approved.
The Board also reviewed Workforce Policies relating to Reward,
Flexible Working and Recruitment to ensure that these supported,
encouraged and incentivised the workforce to adhere to and
operate in accordance with the Group’s values. In 2020, as part of
its annual programme, the Board will review Workforce Policies
relating to promotion, retention, performance management
and training & development. An explanation of the Company’s
approach to investing in and rewarding its workforce can be
found within the Corporate Responsibility Report on page 45.
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74
Directors’ duties and Section 172 Statement
The Directors of RELX PLC – and those of all UK companies – must
act in accordance with their duties under the Companies Act 2006
(the Act). These include a fundamental duty to promote the
success of the Company for the benefit of its members as a whole.
This duty has been central to the Board’s decision-making
processes and outcomes over many years. The information which
follows on pages 74 to 78 describes how, in performing their
duties during the year, the Directors have had regard to the
matters set out in Section 172(1) (a) to (f) of the Act, and constitutes
the Board’s Section 172 Statement for 2019. This section is
incorporated by reference into the RELX 2019 Strategic Report.
Long-term decision-making (s.172)
The Board delegates day-to-day management and decision-
making to its senior management team, but it maintains oversight
of the Company’s performance, and reserves to itself specific
matters for approval, including significant new business
initiatives. Then, by receiving regular updates on business
programmes and objectives, the Board monitors that
management is acting in accordance with agreed strategy.
Processes are in place to ensure that the Board receives all
relevant information to enable it to make well-judged decisions
in support of the Company’s long-term success.
In 2019, the Board:
§§ Received presentations on the business areas and, through
ongoing discussion with the business leaders and the Chief
Strategy Officer, determined strategic priorities for a three
year period, and the development of robust supporting
operating plans. A two day Strategy Review was held in
September 2019 to debate and determine a three-year strategy
plan for the Group for 2020-2022
§§ Conducted an annual review of its invested capital and capital
structure. This embraced financial performance, acquisitions
history and prospects, net debt, target returns, credit ratings
and forecasts, and financial market conditions. The Board
also received regular updates on RELX’s capital position
throughout the year and was able to ensure that appropriate
and cost-effective financial instruments were put in place, as
part of its Corporate Finance Strategy, to meet the long-term
funding requirements of the Group
§§ Considered and approved a number of acquisition and disposal
proposals. The Board only approves such a transaction if it is
satisfied, after full consideration, that it meets the Section
172(1) requirement that it is most likely to promote the success
of the Company for the benefit of its members as a whole, and it
considers the value forecasted to be added to the Group by an
acquisition, over a defined future period. This judgement is
recorded. The Board also conducts an annual acquisition
review process in which historical acquisitions are reviewed
and the financial performance and strategic rationale for
them revisited
§§ Approved comprehensive Treasury and Tax Policies and
principles to support Company success and minimise risk over
the long-term. When taken together with the setting of annual
budgets and capital allocation, and its oversight of business
performance against targets, this work enabled the Board to
confirm the Company’s outlook for the year ahead, the going
concern statement and its longer-term viability
§§ Reviewed Board and Senior Management succession, and the
Remuneration Policy and plans for its Executive Directors and
business leaders, to ensure that both short and longer-term
incentives are aligned with Company and stakeholder
interests, and Company values and culture. Internal talent
reviews and career progression plans were shared with the
Board, as were Workforce Engagement and inclusion and
diversity policies and practices. All of these activities are
intended to contribute to the development of a motivated
and aligned workforce, the prospect of orderly succession
and successful management and leadership capabilities for
the future
§§ Agreed the Group’s principal risks, considered emerging risks
and received regular risk management and internal control
reviews throughout the year, including specific consideration
of information and cyber security risk
Reputation for high standards of business conduct (s.172)
The Board is responsible for developing a corporate culture
across RELX which promotes integrity and transparency. It has
established comprehensive systems of corporate governance,
and approves policies and procedures which promote corporate
responsibility and ethical behaviour. Central to these policies
is the Group’s Code of Ethics. This was updated in 2018, applies
to all Directors and employees, and is embedded into the
Group’s operations.
In 2019, the Board:
§§ Received and endorsed a comprehensive report from the
Global Head of Corporate Responsibility outlining activities
throughout RELX designed to progress our unique
contributions to society, strengthen governance and
compliance, advance customer relationships, ensure an
ethical supply chain and reach environmental targets.
The Board also approved the Group’s annual Corporate
Responsibility Report
§§ Approved the Company’s Modern Slavery Act Statement
describing the steps it had taken to ensure that slavery and
human trafficking were not taking place in the context of
business carried out in 2019
§§ Approved, as part of the Annual Report and Accounts 2018
process, statements describing how the Company had applied
the principles of the UK Corporate Governance Code during
2018, and indicating its full compliance with the provisions of
the 2016 UK Corporate Governance Code
§§ Put in place actions to address the requirements of the 2018 UK
Corporate Governance Code for 2019
RELX Annual report and financial statements 2019 | Governance 75
Section 172(1) of the Act – Duty to promote the success of
the company
A director of a company must act in the way they consider, in
good faith, would be most likely to promote the success of
the company for the benefit of its members as a whole, and
in doing so have regard (amongst other matters) to factors
(a) to (f):
(a) The likely consequences of any decision in the
long term;
(b) The interests of the company’s employees;
(c) The need to foster the company’s business relationships
with suppliers, customers and others;
(d) The impact of the company’s operations on the
community and environment;
(e) The desirability of the company maintaining a reputation
for high standards of business conduct; and
(f)
The need to act fairly as between members of
the company.
§§ Considered and approved, as appropriate, actual and potential
Director Conflicts of Interest
§§ Received a presentation from the Chief Compliance Officer
on the process in place through which RELX employees can
confidentially (and anonymously should they so choose) submit
concerns to the Company. These include, but are not limited to,
breaches of the Code of Ethics. It additionally reviewed the
process for the investigation of reports received by the
Company. Through the work of the Audit Committee, the Board
also had oversight of the RELX compliance programme, which
provides both an internal control structure, and also supports
and provides education to our workforce through policies,
guidance and training
Acting fairly as between members of the Company (s.172)
The Board aims to understand the views of its shareholders and
always to act in their best interests.
In 2019, the Board:
§§ Approved a range of activities designed to enhance value for
all shareholders. These included a recapitalisation of the
Company, overwhelmingly approved at the 2019 Annual
General Meeting, to create long-term distributable reserves
for future dividend payments; an ongoing share buyback
programme; and a progressive dividend policy
§§ Received Investor Relations updates at every meeting and
direct feedback from investors during specific consultation
exercises and on publication of trading results and updates.
The Annual General Meeting in 2019 provided an opportunity
to understand the priorities and concerns of individual
shareholders
Other key activities
The Board met regularly throughout the year and, in 2019, held
seven scheduled meetings. The Board’s programme ensures
that all relevant matters are considered at scheduled meetings.
In addition to the activities set out on pages 74 and 75, the Board
also considered:
§§ 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
§§ Appointments and re-appointments to the Board and
appointments to Board Committees
§§ Cyber Security
§§ Update on litigation matters
§§ Reports from the Committee Chairs on the key activities of the
Board’s Committees
RELX Annual report and financial statements 2019 | Corporate Governance ReviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 76
Stakeholder engagement
The Board recognises that relationships with RELX’s key stakeholders, including its investors, employees, customers, suppliers and the
communities in which we operate, are important in allowing the Company to achieve its business aims. Engagement takes place with our
stakeholders at all levels across RELX, and the size, diversity of our business and global nature of the Group means that it can take many
different forms. Much of it takes place at an operational level, and this is especially true in respect of our customers and suppliers, with
whom we deal in the ordinary course of business on a day-to-day basis. In addition to the activities set out on pages 76 to 78, in 2019 to
help the organisation and the Board understand the issues that our stakeholders believe we should be focused on, we asked an external
third party to test our ranking of 14 issues that we consider to be material with our stakeholders. The results of this engagement,
which are seen by the Board and indicate that RELX is focusing on the right issues, are set out on page 8 of our 2019 Corporate
Responsibility Report.
Stakeholder: Investors
Why effective
engagement
is important:
This helps investors to understand our strategy, performance and governance arrangements, and to make informed
and effective investment decisions concerning RELX. It also makes clear our prioritisation of the long-term in our
decision-making and focus on delivery of consistent financial performance.
How the Board
ensures effective
engagement
with investors,
understands
their views and
considered these in
its discussions and
decision-making
in 2019:
RELX’s material communications to investors, such as its trading results and updates, other regulatory
announcements, Annual Report and Accounts and Notice of Annual General Meeting must be reviewed and approved
by the Board under our corporate governance framework. The Board also receives regular reports on investor
engagement activities and outcomes from each of the Chief Executive Officer, Chief Financial Officer, Head of Investor
Relations and Director of Corporate Responsibility. In 2019, these updates provided the Board with information
arising from or relating to: the completion of investor roadshows; ad hoc interaction with institutional shareholders
on significant issues; and ongoing dialogue with investors through our dedicated Investor Relations, Corporate
Responsibility and Treasury teams, concerning our recent and proposed activities. The Board also received a full
update from the Chair of the Remuneration Committee on the results of a consultation exercise with major investors
concerning the proposed 2020 Directors’ Remuneration Policy, and had direct interaction with shareholders at the
2019 Annual General Meeting, at which it received their thoughts and views on Company performance.
During the year, the views of our investors informed Board discussions and decision-making in respect of its:
approval of the quantum of the Company’s share buy back programme, dividend declarations and dividend policy;
recommendation to shareholders to increase the distributable reserves of the Company through a capital
reduction; approval of the RELX three-year strategy plan, priority order for the use of cash generated by the Group,
and annual budgets and targets; and approval of the Group’s risk appetite. It also assisted the Board in recommending
the proposed 2020 Directors’ Remuneration Policy be put to shareholders for approval at the Company’s 2020 AGM,
and in respect of its approval of the Group’s 2019 annual and interim results announcements and reports.
Stakeholder: Employees
Why effective
engagement
is important:
Our people are essential to our success, future growth, and our aim to build leading positions in long-term global
growth markets. We continue to invest substantial time and effort to employ, train, develop and retain employees
who are passionate about our markets and have up-to-date knowledge and world class expertise in our key
functional areas. Hearing their views on what we do well, and what we can do better, is an important driver for
improvement and retaining our best talent.
How the Board
ensures effective
engagement
with employees,
understands
their views and
considered these in
its discussions and
decision-making
in 2019:
In accordance with the Code, the Board appointed Marike van Lier Lels as Workforce Engagement Director, with
effect from 1 January 2019. In this role, and supported by the Chief Human Resources Officer, she has overseen the
RELX Workforce Engagement Programme for 2019. During the year, she met with European, US and Asia-Pacific
workforce representatives, and reported to the Board on engagement processes, outcomes and findings. A wide
range of topics were discussed, which included employee views and perspectives on areas including pay and
benefits, career development, training, inclusion and diversity, working environment, flexible working, corporate
responsibility and the effectiveness and frequency of employee surveys. The Directors’ Remuneration Policy, in so
far as it applies to the Executive Directors and how it aligns with broader workforce policies, was also discussed. As
a result of the findings, the Board provided direction on providing employees with greater transparency on career
development, and its review of flexible working policies and their implementation in 2020. Marike will continue the
programme of engagement in 2020, which will be broadened to include her meeting with HR Business Leaders,
Heads of Talent and Heads of Recruitment. Additionally in 2019, the Board also reviewed net promoter score survey
results for individual business areas, and met and received presentations from Group employees in London, Atlanta
and Amsterdam. As a regular item on its agendas, the Board received internal Group-wide communications to
employees, and received an update from the Chief Compliance Officer on reports submitted by RELX employees,
in confidence, on potential breaches of RELX approved policies or procedures.
The Board considered the information provided to it to assist in its discussions and decision-making in the following
areas: its assessment and monitoring of RELX’s culture, and its alignment with our strategy, values and purpose;
its discussion and approval of updated RELX Inclusion and Diversity Policies, applicable to each of the Board and
the rest of the Group; its review and approval of RELX Workforce Policies in the areas of reward, recruitment and
flexible working; and its approval of the proposed Workforce Engagement programme for 2020.
RELX Annual report and financial statements 2019 | Governance
77
Stakeholder: Customers
Why effective
engagement
is important:
Our goal is to help customers make better decisions, get better results and be more productive. We can only do this
by leveraging a deep understanding of their needs and views to create innovative solutions which combine content
and data with analytics and technology in global platforms.
How the Board
ensures effective
engagement
with customers,
understands
their views and
considered these in
its discussions and
decision-making
in 2019:
RELX’s engagement with its customers takes place mainly at an operational level within our business areas
through face-to-face meetings, customer training and workshops, ongoing dialogue through dedicated sales
and operations teams, customer relationship managers, and in respect of material customer issues, through
our business area senior management teams. The Board received presentations throughout the year from these
individuals, including a wide range of customer-facing employees and RELX product matter experts. These
assisted the Board in maintaining and developing its understanding of current customer and market trends, issues
and likely future needs, and how these could be addressed, during the two strategy discussion days held during the
year, and several deep dive business reviews included in its 2019 annual agenda cycle.
In addition, the Board reviewed customer survey data to further inform its discussions and decision-making
when reviewing, discussing and approving the RELX three-year strategy plan from 2020-2022 and the supporting
2020 budget, focused on migrating all of our information solutions across the Group towards higher value-add
decision tools, adding broader data sets, embracing more sophisticated analytics and leveraging more powerful
technology, primarily through organic development. Customer-related views, behaviours and profiles provided to
the Board during the year as a result of its oversight of engagement in this area also assisted it when considering
the approval of selective acquisitions of targeted data sets, analytics and assets in high-growth markets that
support our organic growth strategies, and which are natural additions to our existing businesses. These included
its approval of the acquisition of Mack Brooks Exhibitions by our Reed Exhibitions business, which expands its
portfolio by more than 30 business-to-business events in 14 countries. Additionally, during the year, the Board
approved the acquisition of ID Analytics, a provider of credit and fraud risk solutions for US$375m, which
complements our existing fraud prevention services within Risk & Business Analytics. Combined with our existing
strengths of verifying and authenticating physical and digital identities, our customers will benefit from an even
more comprehensive approach to detecting and preventing fraud and managing risk.
Stakeholder: Suppliers
Why effective
engagement is
important:
How the Board
ensures effective
engagement
with suppliers,
understands
their views and
considered these in
its discussions and
decision-making
in 2019:
We aim to be fair and ethical in dealings with our suppliers, pay them on agreed terms and be a collaborative and
responsive partner.
The Board received a full update from the Global Head of Purchasing on the RELX Socially Responsible Supplier
Programme (RSRSP), supporting risk management and audit processes, and associated targets. It was also
provided with detail on feedback from surveys completed by our suppliers on how RELX supports them in meeting
their obligation to comply with our defined standards and principles as set out in our Supplier Code of Conduct, the
ongoing roll-out of our supplier diversity programme, and on supplier forums and meetings held to enhance our
supplier interactions and support the development of innovation and efficiencies in our relationships. This
information assisted the Board in its review of RSRSP targets for 2020. The Board received an update from the
Director of Corporate Responsibility on further Group engagement with suppliers, as part of its review and approval
of the annual RELX Modern Slavery Act Statement.
RELX Annual report and financial statements 2019 | Corporate Governance ReviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 78
Stakeholder: Community
Why effective
engagement is
important:
Contributing to our local and global communities is a responsibility and an opportunity. Our employees feel
passionately about supporting scientific research throughout the scientific community and advancing the rule of
law throughout the global community. Our commitments help us to be an employer of choice.
How the Board
ensures effective
engagement with
the community,
understands its
views and
considered these in
its discussions and
decision-making in
2019:
The Company’s engagement with the community is completed primarily through our annual RE Cares programme,
by which our businesses pursue Corporate Responsibility activities that maximise RELX’s positive impact on society
through its Unique Contributions, which include fostering communities. The Board receives an update on the RE
Cares programme, and our engagement with the communities in which we operate, from the Director of Corporate
Responsibility. This included detail on our UN Sustainable Development Goals (SDG) Resource Centre, participation
in UN SDG Action Platforms, and engagement processes through which RELX individuals serve on the boards of
UN Global Compact networks in the UK and the Netherlands. The Board was also provided with an overview of the
materials provided on the corporate responsibility section of our website, and received updates on our involvement
and participation in corporate responsibility forums, initiatives and workshops through our dedicated team and
network of 240 RE Cares Champions across our businesses, who ensure the vibrancy of our engagement with
the community.
Attendance at meetings of the Board and Board Committees
The table below shows the attendance of Directors at meetings of the Board and its Committees during the year. Attendance is
expressed as the number of meetings attended out of the number eligible to be attended.
Director
Anthony Habgood (Chair)
Erik Engstrom
Nick Luff
Wolfhart Hauser
Adrian Hennah
Marike van Lier Lels (2)
Robert MacLeod (3)
Carol Mills (4)
Linda Sanford
Ben van der Veer (4)
Andrew Sukawaty (5)
Suzanne Wood
Charlotte Hogg (6)
Committee
appointments
R N C
–
–
R N C
A N C
A N C
R N C
A C
R C
C
A C
A C
C
Board (1)
7/7
7/7
7/7
7/7
7/7
6/7
7/7
2/2
7/7
2/2
5/5
7/7
–
Audit
–
–
–
–
4/4
1/2
–
1/1
–
–
3/3
4/4
–
Remuneration Nominations
4/4
–
–
4/4
4/4
3/4
1/1
–
–
–
–
–
–
3/3
–
–
3/3
–
–
3/3
–
3/3
–
–
–
–
Corporate
Governance
6/6
–
–
6/6
6/6
5/6
6/6
2/2
6/6
2/2
4/4
6/6
–
Board Committee
membership key
A Audit
R Remuneration
N Nominations
C Corporate Governance
Committee Chair
(1) In addition to the seven scheduled meetings, serving Directors also attended two full-day strategy and business review meetings.
(2) Ms van Lier Lels stepped down as a member of the Audit Committee on 6 June 2019, to focus on her responsibilities as Workforce Engagement Director. She was unable to
attend the February Board and Committee meetings due to unforeseen personal circumstances.
(3) Robert MacLeod was appointed to the Nominations Committee on 25 September 2019.
(4) Ms Mills and Mr van der Veer each stepped down as a member of the Board on 25 April 2019. Ms Mills also stepped down as a member of the Audit Committee from that time.
(5) Andrew Sukawaty was appointed as a member of the Board and Corporate Governance Committee on 25 April 2019, and as a member of the Audit Committee with effect
from 6 June 2019.
(6) Charlotte Hogg was appointed to the Board with effect from 16 December 2019. Therefore, she did not attend any Board or Committee meetings during the year.
RELX Annual report and financial statements 2019 | Governance
79
Division of Responsibilities
Key roles of the Directors
Chair
§§ Provides leadership of the Board, and is responsible for its
overall effectiveness in directing the Company
Chief Financial Officer
§§ Day-to-day management of the Group’s financial affairs
§§ Responsible for the Group’s financial planning, reporting
and analysis
§§ 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 Board’s annual assessment of the performance
of the Chair
§§ Available to meet with shareholders on matters where
usual channels are deemed inappropriate
§§ Deputises for the Chair, as necessary
§§ Serves as a sounding board for the Chair and acts as an
intermediary between the other Directors, when necessary
Non-Executive Directors
§§ Bring an external perspective and 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
§§ Ensures that all Directors are sufficiently apprised of
matters to make informed judgements, through the
provision of accurate, timely and clear information
§§ Promotes high standards of corporate governance,
demonstrates objective judgement and promotes a Board
culture of openness and debate
§§ Sets the agenda and chairs meetings of the Board
§§ Chairs the Nominations and Corporate Governance
Committees
§§ Facilitates constructive Board relations and the effective
contribution of all of the Directors
§§ Ensures effective dialogue with shareholders
§§ Ensures the performance of the Board, its Committees and
individual Directors is assessed annually
§§ Ensures effective induction and development of Directors
Chief Executive Officer
§§ Day-to-day management of the Group, within the delegated
authority limits set by the Board
§§ Develops the Group’s strategy for consideration and
approval by the Board
§§ Ensures that the decisions of the Board are implemented
§§ Informs and advises the Chair and Nominations Committee
on executive succession planning
§§ Leads communication with shareholders
§§ Promotes and conducts the affairs of the Company
with the highest standards of integrity, probity and
corporate governance
Chair and Chief Executive Officer
There is a clear separation of the roles of the Chair, who leads
the Board, and the Chief Executive Officer, who is responsible for
the day-to-day management of the Group, which are set out in
writing and included above. The table above also illustrates
the key responsibilities of the other Directors. This division of
responsibilities, in addition to the Matters Reserved for the Board,
Terms of Reference for each Board Committee and delegated
authorities in place from the Board to the Chief Executive Officer
and other senior executives which relate to the day-to-day
management of the business, ensures that there are appropriate
controls in place to prevent any individual from having unfettered
powers of decision.
RELX Annual report and financial statements 2019 | Corporate Governance ReviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 80
Composition, succession and evaluation
Board appointment procedure
The Company has in place a rigorous procedure for the
appointment of new Directors to the Board. This involves the
preparation of a search specification by the Nominations
Committee and the engagement of an external search firm to
identify and propose candidates based on that specification. Any
candidates will be interviewed by a number of Board members,
including the Chair and the Chief Executive Officer, and additionally
the Chief Legal Officer and Company Secretary. The candidates
are considered in detail by the Nominations Committee, and a
recommendation made to the Board regarding any Director
appointment. The Board then has a further opportunity to discuss,
and if deemed fit, approve the appointment. The Board may
appoint Directors (subject to a maximum upper limit) to fill a
vacancy at any time, although any Director so appointed shall
only hold office until the following Annual General Meeting of the
Company, at which his or her re-election shall be voted upon by
shareholders. Directors are then required to seek re-election by
shareholders at each Annual General Meeting of the Company.
The Notice of Meeting for the 2020 Annual General Meeting will
set out information on the Directors standing for election or
re-election, including their biographies, skills and key
contributions, as required by the Code.
Board composition
As at the date of this Annual Report, the Board was made up of the
Chair, two Executive Directors and eight other Non-Executive
Directors, who bring a wide range of skills, experience, industry
expertise and professional knowledge to their roles. A summary
of the diversity of the gender, length of tenure and nationality
of the Board are shown below. The Nominations Committee
considers these as important factors when reviewing the
composition of the Board and its Committees, which it does on an
ongoing basis. It has concluded that the current composition of the
Board remains appropriate, and allows it to discharge its duties to
the Company and govern the Group effectively.
Board and Committee changes in 2019
Having served on the Board for nine years, Ben van der Veer
stepped down as a Non-Executive Director at the conclusion of the
Company’s Annual General Meeting in April 2019. Carol Mills also
stepped down at that time. Two Non-Executive Directors were
appointed during the year. Andrew Sukawaty joined the Board as
a Non-Executive Director in April. He currently serves on the Audit
and Corporate Governance Committees. Additionally, Charlotte
Hogg joined the Board from December. She currently serves on
the Corporate Governance Committee.
Board Committee membership throughout 2019 is set out in the
table on page 78.
Balance of our Board as at 31 December 2019
BALANCE OF EXECUTIVE/NON-EXECUTIVE DIRECTORS
GENDER DIVERSITY
Executive: 2
Chair: 1
Non-Executive: 8
Female: 4
Male: 7
LENGTH OF TENURE OF NON-EXECUTIVE DIRECTORS AND CHAIR
NATIONALITY OF DIRECTORS
Over 9 years: 1
Swedish: 1
German: 1
Dutch: 1
7-9 years: 2
0-3 years: 4
British: 5
4-6 years: 2
American: 4
Ms Charlotte Hogg has dual nationality. She is American and British.
RELX Annual report and financial statements 2019 | Governance 81
Board skills and expertise
The Board collectively has a diverse range of skills, including in
the following areas:
§§ Corporate Governance for listed companies
§§ Corporate Strategy and Organisation
§§ Operational experience in the Group’s product markets
§§ Executive Board member and leadership experience in large
international listed companies
§§ Corporate Responsibility, Human resources management
and executive remuneration
§§ Financial Expertise
For further information on the skills of each individual director,
please see pages 8 to 10 of the Notice of Meeting for our 2020
Annual General Meeting.
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 Company Secretary, who is
responsible for the accurate and timely flow of information to the
Board, advising the Board on all corporate governance matters,
and ensuring that all Board procedures are followed correctly.
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 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
Chair and other Board and Committee members. They are also
provided with a copy of the meeting minutes.
Board evaluation
The Directors consider the evaluation of the Board, its
Committees and members to be an important aspect of corporate
governance. The Board undertakes an annual evaluation of its
own effectiveness and performance, and that of its Committees
and individual Directors. In 2019, an internal evaluation was
completed, supported by the Company Secretary. Using
questionnaires completed by all Directors, key areas were
explored including: Board composition; Board succession
planning; Board and Group diversity; the performance of the
Board and Committees and their effectiveness in achieving
objectives and fulfilling their terms of reference; talent
management and executive leadership succession; setting the
Group’s culture; risk management, corporate governance and
compliance; quality of information provided by management; and
stakeholder engagement including the Board’s understanding
and visibility of the views of the Group’s stakeholders, and
incorporation of them into the Board’s decision-making process.
The Chair conducted interviews with each of the Directors.
The review of the performance of the Chair was led by the Senior
Independent Director. The Chair was not present during the
discussion among the Non-Executive Directors relating to his
performance. The conclusions of the full evaluation were initially
reviewed by the Nominations Committee, with a particular focus
on Board composition, succession and diversity. The Board then
received an update from the Nominations Committee which it had
a further opportunity to discuss and, where appropriate, provide
direction on.
Conclusions of the 2019 evaluation
The evaluation confirmed that, overall, the Directors believe
that the Board and each of its Committees continue to function
effectively in achieving objectives and fulfilling their responsibilities,
and that each Director continues to contribute effectively.
Directors believe that the Board has the right blend of experience,
skills and diversity in the context of the challenges currently
facing the Group. The evaluation also confirmed that the Board
believes it has adequately addressed the new requirements of the
Code, especially with regards to its involvement in the setting and
maintenance of the Group’s culture, its understanding and
visibility of the views of the Group’s key stakeholders, and its
incorporation of those views into the Board’s decision-making
process. The Board noted that the feedback received and
communicated from its Workforce Engagement Director had
increased this visibility. It recognised that the Group needs to keep
assessing its responsibilities to the Group’s key stakeholders, and
that whilst it consistently considered their views, further visibility
of the views of the Group’s suppliers should be incorporated into
the Board’s agenda for 2020.
All Directors commended the Chair and his effective leadership of
the Board, noting amongst other things that he facilitates: (i) the
effective contribution of each Non-Executive Director, and (ii) the
development of constructive relationships and communications
within the Board. The Board also highlighted the importance of
the leadership provided by the Chair, both to the Board to provide
it with a strong culture, and alongside the Chief Executive Officer,
to the wider organisation over the previous ten-year period,
including during the period of corporate governance change
following the corporate simplification in September 2018.
The Nominations Committee determined and recommended to
the Board that its composition remained appropriate, and that the
evaluation would not in itself result in any membership changes
outside of the normal controlled and structured evolution of the
Board over time.
Audit, Risk and Internal Control
Internal control and risk management
RELX 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. Details of the principal and emerging
risks facing the Group and how these are mitigated are set out on
pages 58 to 61.
RELX Annual report and financial statements 2019 | Corporate Governance ReviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 82
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, RELX has
adopted the three lines of defence assurance model as set
out below.
1st line of defence
RELX 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
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The Board and Audit Committee
Note: In addition to RELX’s internal controls, RELX is also audited externally.
The report of the external auditor has been included from pages 120 to 127.
The Board has adopted a schedule of matters which are required
to be brought to it for decision. The Board is responsible for the
system of risk management and internal control of RELX and
has implemented an ongoing process for identifying, assessing,
monitoring and managing the principal and emerging risks faced
by its businesses. This process was in place throughout the year
ended 31 December 2019, and up to the date of approval of
the Annual Report and Financial Statements 2019. The Board
monitors these systems of internal control and risk management
and annually carries out a review of their effectiveness.
RELX has an established framework of procedures and internal
control, with which the management of each business is required
to comply. RELX 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 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 of Ethics also outlines confidential procedures
enabling employees to report any concerns about compliance, or
about the Group’s financial reporting practice. The Code of Ethics
is available on our website at
www.relx.com.
Each business area has identified and evaluated its principal and
emerging 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.
Principal and emerging risks facing RELX 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 RELX 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 and regulatory
matters, are managed by legal directors in the businesses.
The risk assessment included consideration of emerging risks
and risk appetite. RELX defines emerging risks as new or
changing risks which are highly uncertain in terms of defining
impact or likelihood and are more usually external to RELX. In line
with the Code, the risk assessment identifies and considers the
likelihood and impact of emerging risks on our business models,
future performance, solvency, liquidity or reputation. The
assessment also considers the need for mitigation of emerging
risks. Risk appetite (defined as RELX’s willingness to take on risk)
is based on an assessment of the level of residual risk, taking
account of inherent risk and mitigation efforts. The assessment
is rated, in relation to RELX’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 RELX 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 RELX’s strategic objectives, values and stakeholder
interests and if shareholder returns could be increased.
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. These reports are
summarised and, as part of the annual review of effectiveness,
submitted to the Audit Committee. The Chair of the Audit
Committee reports to the Board on any significant internal
control matters arising.
Annual review
As part of the year-end procedures, the Audit Committee and
Board reviewed the effectiveness of the systems of internal
control and risk management during the 2019 financial year.
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 Board has 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 throughout 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 and
emerging risks. The resulting Viability Statement is set out on
page 84.
RELX Annual report and financial statements 2019 | Governance
83
Responsibilities in respect of
financial statements
The Directors are required to prepare financial statements as at
the end of each financial period, in accordance with applicable
laws and regulations, which give a true and fair view of the state
of affairs, and of the profit or loss, of the Company and its
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 consolidated financial statements, which are the
responsibility of the Directors of the Company, 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 Board and
brought to the attention of the Board, the Directors are satisfied
that 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
position and performance, business model and strategy.
Going Concern
The Directors, 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 2019
financial statements. In reaching these conclusions, the Directors
have had due regard to the Group’s financial position as at
31 December 2019, 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
2019 is set out in the Chief Financial Officer’s report on pages
54 to 57. 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 in the next
twelve months 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
157 to 162. The principal risks and emerging risks facing the Group
are set out on pages 58 to 61.
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 the Company certify in the Annual Report
2019 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 Committee
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 Annual Report 2019 on Form 20-F their
conclusions about the effectiveness of the disclosure controls
and procedures
A Disclosure Committee, comprising the Company Secretary 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 the Company to
certify in the Annual Report 2019 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 Annual
Report 2019 on Form 20-F.
Annual General Meeting
All holders of RELX PLC ordinary shares may attend the
Company’s Annual General Meeting (AGM) in April 2020. The
AGM provides an opportunity for the Board to communicate with
individual shareholders, and for shareholders to provide their
views on the performance and progress of the Group. The
Chairman, the Chief Executive Officer, the Chief Financial Officer,
the Chairs of the Board Committees, other Directors and a
representative of the external auditors are available to answer
questions from shareholders. The Chief Executive also presents
a review of the key business developments during the year. The
Company offers electronic voting facilities in relation to proxy
voting at shareholder meetings. Details of proxy voting by
shareholders, including votes withheld, are given at the AGM
and then posted on our website following the AGM.
RELX Annual report and financial statements 2019 | Corporate Governance ReviewMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 84
Viability statement
Viability statement
The Code requires Directors to assess the prospects of the
Group over a period significantly longer than twelve months
and to state whether they have a reasonable expectation that
the Company will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment.
Assessing the Group’s prospects
The Group develops information-based analytics and decision
tools for professional and business customers in the Scientific,
Technical & Medical, Risk and Business Analytics, Legal and
Exhibitions sectors. The Group has leading positions in
long-term growth markets, deep customer understanding and
has developed innovative solutions that often account for about
1% of our customers’ cost base but can have a significant and
positive impact on the economics of the remaining 99%. Having
effectively transitioned the business from print to digital, the
Group is systematically migrating its information solutions
toward higher value-add decision tools, adding broader data
sets, embedding more sophisticated analytics and leveraging
more powerful technology. We believe this evolution is
improving our business profile and positions the Group for
future business success.
The Group’s prospects are assessed through the annual
strategy planning process. This process includes a review
of assumptions made and assesses each business area’s
longer-term plan. The resulting three-year strategy plan forms
the basis for Group and divisional targets and in-year budgets.
Objectives are set with consideration given to the economic and
regulatory environment, and to customer trends, as well as
incorporating risks and opportunities. The most recent
three-year strategy business plan was agreed by the Directors
in September 2019.
In assessing the Group’s prospects, our current position and
principal risks are considered as follows:
Current position and business model
§§ Diversified business in terms of sectors, markets,
customers, geographies and products and services so that
we are not dependent on any one business, customer, region
or product
§§ High percentage of subscription and recurring revenue streams
§§ Leading positions in long-term global growth markets
§§ Low working capital and capital investment requirements
leading to high levels of cash generation
§§ Clear strategy focused on organic growth supplemented by
selective acquisitions in higher growth areas
§§ Continued development of increasingly sophisticated
information-based analytics and decision tools
§§ Expansion into higher growth adjacencies and geographies
primarily through organic investment augmented with
selective acquisitions
Further details on our strategy and 2019 progress are on pages 4
and 5.
Principal risks related to our business model
§§ Challenges to the intellectual property rights of content
embedded in our products and services
§§ Disruption or loss of data sources that our businesses rely
on due to regulation or other reasons
§§ Changes to the paid subscription model for our primary
research business within Scientific, Technical and Medical
§§ Technological failure of our electronic platforms and networks
§§ Failure of our cyber security measures resulting in
unauthorised access to our systems and breach of data privacy
Detailed descriptions of all principal and emerging risks and
mitigations are on pages 58-61
Assessing the Group’s viability
The three-year strategy 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, linked to the principal
and emerging risks, occur. To first make the assessment, the
financial impact of each principal risk on revenue and cashflow
is estimated. Owing to the diversified nature of the Group, no
individual risk was estimated to have an impact necessary for a
breach in the Group’s $3.0bn committed bank facility, broadly
estimated at one third of total Group cashflow assuming no
mitigating actions.
The assessment then considers various stress-test scenarios
under which multiple risks occur simultaneously accompanied
by an inability to access the debt capital markets to refinance
scheduled liabilities as they become due, together with an
increase in interest rates faster than currently expected.
The resulting analysis, which assumes share buybacks and
acquisition activity are suspended but dividends continue
uninterrupted, then considers the impact on available headroom
and whether any scenario results in breaching the covenant in
the committed bank facility.
The worst-case stress case modelled a combination of the
following risks: (a) the inability to use certain third-party data
resources; (b) an adverse impact on revenue from a shift away
from the paid subscription model; and (c) having our systems
disrupted by a cyber security event. The analysis concluded that
with the simultaneous occurrence of these three risks, no
access to the debt capital markets and a rising interest rate
environment, the Group would still have sufficient funds to
trade, settle its liabilities as they come due and remain
compliant with the covenant in its committed bank facility,
whilst still paying dividends.
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, and consider emerging risks. The Directors also
receive regular updates from management on treasury, tax,
acquisitions and divestments, and 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 within the
three-year planning period, they also cover longer-term risks.
As a result of stress-testing the three-year strategy plan,
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.
RELX Annual report and financial statements 2019 | Governance RELX Annual report and financial statements 2019
85
Report of the Nominations Committee
This report has been prepared by the Nominations Committee and
has been approved by the Board.
Membership
The Committee comprises only Non-Executive Directors. The
members of the Committee who served during the year were:
§§ Sir Anthony Habgood (Chair of the Committee)
§§ Wolfhart Hauser
§§ Adrian Hennah
§§ Marike van Lier Lels
§§ Robert Macleod (from 25 September 2019)
Responsibilities
The principal purpose of the Committee is to provide
assistance to the Board by identifying individuals qualified
to become Directors and recommending to the Board the
appointment of such individuals.
The role and responsibilities of the Committee are set out
in written Terms of Reference and are available on the
company’s website at
www.relx.com. These include:
§§ to keep under review the size and composition of the Board
§§ to ensure that plans are in place for orderly Board and
Senior Management succession and to oversee a diverse
pipeline for such succession
§§ to agree the specification for the recruitment of
new Directors
§§ to procure the recruitment of new Directors
§§ to recommend to the Board the appointment of candidates
as RELX PLC Directors
§§ to recommend Directors to serve on the Committees of the
Board and to recommend members to serve as the Chair of
those Committees
§§ to make recommendations to the Board 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 by shareholders
§§ to review and make recommendations to the Board on the
authorisation of Directors’ conflicts of interest, including
any terms to be imposed in relation to a Director’s conflict
of interest
Activities of the Committee
During the year, the Committee met four times and its main areas
of focus were:
§§ the continued appointment of Sir Anthony Habgood as Chair,
considering amongst other things, the Code provision related
to the length of tenure for that role
§§ the re-appointments of Wolfhart Hauser and Robert MacLeod
at the conclusion of their specified terms of office
§§ the impact on Board composition and balance, and Board
Committee membership, of the retirements of Ben van der
Veer and Carol Mills as Non-Executive Directors
§§ the appointment of Charlotte Hogg as an independent
Non-Executive Director
§§ a review of the composition of the Audit and Nominations
Committees resulting in the following changes: appointments
of Andrew Sukawaty as a member of the Audit Committee and
Robert MacLeod as a member of the Nominations Committee;
and Marike van Lier Lels stepping down as a member of the
Audit Committee in order to allow her sufficient time to focus
on her responsibilities as Workforce Engagement Director
§§ a review of RELX’s approach to inclusion and diversity, both
at Board level and across the Group, including progress
made against objectives, and of the updated Inclusion and
Diversity Policy
§§ succession planning for Board and Senior Management roles
§§ ongoing review of Directors’ actual and potential conflicts of
interest and the recommendation to the Board of the suitability
of Directors’ external non-executive director appointments
§§ a review of the Committee’s Terms of Reference which now
reflect the increased remit of the Committee under the Code
§§ the continued independence of Adrian Hennah as a
Non-Executive Director in advance of nine years of service
in April 2020, and its possible impact on Board and
Committee membership
Role of the Nominations Committee
The Nominations Committee is responsible for ensuring that the
Board, its Committees and RELX’s senior management have the
correct balance of skills, knowledge and experience, to effectively
lead the Group both now, and over the longer term. This is achieved
through effective succession planning and talent development,
and an understanding of the changing competencies required to
support the Company’s strategy, purpose, culture and values.
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 86
Board Changes
When reviewing Board composition, the Committee considers
(amongst other things) overall length of service and the need for
membership to be regularly refreshed. The Company has in place
a formal, rigorous and transparent procedure for the appointment
of new Directors. In advance of the retirement of Carol Mills from
the Board with effect from the 2019 Annual General Meeting,
the Committee started a search process. This involved the
preparation of a specification and the engagement of the
independent global search firm, Russell Reynolds Associates
(which has no other connection to RELX), to identify and propose
Non-Executive Director candidates based on that specification.
During the process, all short-listed candidates were interviewed
by a number of Board members, including the Chair and Chief
Executive, and additionally the Chief Legal Officer and Company
Secretary. The candidates were then considered in detail by the
Committee, and a recommendation made to the Board regarding
the appointment, which it then had a further chance to discuss and
approve. Following the completion of this process, Andrew
Sukawaty was appointed as an independent Non-Executive
Director with effect from 25 April 2019. The Board is already
benefiting from his considerable international experience in
the technology sector, his significant and recent listed company
experience with Inmarsat plc and Sky plc, and his understanding
of the US business and governance environment. In addition,
Charlotte Hogg was appointed as an independent Non-Executive
Director with effect from 16 December 2019. She brings with
her relevant strategic and operational experience gained from
previous roles, a deep understanding of the financial services
sector and exposure to working with big data technologies.
These two appointments continued the progressive evolution
of the RELX PLC Board. The experience and sector knowledge
brought by the new Directors will ensure that new and diverse
perspectives are brought to Board discussions, as well as the
independence of thought and vision that new appointments to the
Board generally bring.
Independence of the Non-Executive Directors
During 2019, the Committee considered the tenure and
independence of existing Non-Executive Directors, and whether
a Director’s length of service had in any way impacted his or her
ability to remain independent in character and judgement in
performing his or her duties. The Board considers all of the
Non-Executive Directors (other than the Chair whose
independence was not assessed, but who was independent on
appointment) 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 Committee agreed with Adrian Hennah that he would retire
from the Board following the conclusion of the Company’s 2020
Annual General Meeting, having served for nine years. During
2019, the Committee had carried out a robust assessment with
regards to his ongoing independence and determined that: (i) he
continued to make thoughtful and valuable contributions to the
Board, (ii) he continued to constructively challenge management
and other members of the Board as appropriate, and (iii) that none
of the other factors weighing against his independence was
present in terms of Adrian’s relationship with the Company,
its directors or shareholders. The Board therefore deemed that he
remained independent and would likely do so past the completion
of nine years of service as a Non-Executive Director.
Board succession planning
In accordance with its Terms of Reference, the remit of the
Committee widened to include monitoring and reviewing
succession planning for both Board and Senior Management
positions within the Group. Succession planning for the Board
was discussed in every Committee meeting in 2019, emphasising
its importance and the Committee’s focus on this area. It received
a detailed presentation from the Chief Executive Officer on
succession plans for Senior Management, including broad views
on potential timings and implications for diversity in those
positions. It satisfied itself that appropriate succession planning
arrangements were in place for the orderly succession to both
Board and Senior Management positions, supported by a diverse
pipeline for such succession. Committee members have regular
contact with succession candidates for Senior Management
positions. The Board is also updated annually on succession
planning and, during the year, it received a detailed presentation
from the Chief Human Resources Officer on the first three tiers
of management below the Chief Executive Officer.
Since the last Annual Report, the Committee has recommended
the adoption of an updated Board Diversity Policy, which the Board
subsequently approved. Its primary objectives are: to ensure that
the Board’s operating environment and procedure for new
appointments respects individuals and their contributions
regardless of any member’s gender, ethnic origin, disability, age,
sexual orientation or any other individual characteristic; and to
ensure that there is at all times a diverse pipeline for succession
at Board level. The policy stresses that the Board’s composition
should be designed to advance the Group’s strategy for the benefit
of all its stakeholders, and that the benefits of all aspects of
diversity should be considered including, but not limited to,
gender and ethnicity. The policy requires that when searches
for an appointment to the Board are conducted by the Company
or by external search firms, they will identify and present a
gender-balanced list of diverse and qualified potential candidates.
The Board Diversity Policy was applied and considered by the
RELX Annual report and financial statements 2019 | Governance 87
Chair Succession
Sir Anthony Habgood has decided that this is the year to retire from
the RELX Board. The succession process is being led by the Senior
Independent Director, Wolfhart Hauser, and overseen by the
Nominations Committee. Sir Anthony joined RELX as Chair in
June 2009, and both the Committee and the Board are deeply
grateful to him for his leadership over a period of significant
development and growth for the Company. During his tenure,
the Group has systematically transitioned from print to electronic
and face-to-face formats, and has been migrating its information
solutions towards higher value-add decision tools, adding broader
data sets, embedding more sophisticated analytics and leveraging
more powerful technology. The Company has experienced
strong and consistent financial performance alongside strong
shareholder returns during his tenure. Under his leadership,
the Company has continued to build on its strong ESG
performance. RELX has been ranked second in 2019 in the S&P
Global 1200 for ESG performance (by CSR HUB), and sixth in the
new Responsibility 100 index of FTSE 100 companies measured
against the United Nations sustainable development goals.
Whilst the Company has been non-compliant with provision 19
of the Code with respect to the Chair’s tenure during the year, the
Board believes that this approach has been in the best interest of
the Company’s stakeholders. As explained on page 84 of our 2018
Annual Report and Accounts, the Board felt that with RELX PLC
becoming the sole parent of the Group, following the corporate
simplification which completed in 2018, continuity of Board
leadership under the current Chair was important for a period
whilst the new single parent governance structure and processes
were embedded.
Committee during the process of appointing Charlotte Hogg as a
Non-Executive Director during the year. The wider results of the
application of the policy can be found within the ‘Balance of our
Board’ section set out on page 80.
Group succession planning
In order to assist in providing a diverse pipeline for succession
across the rest of the Group, during the year the Committee
undertook a review of the Group’s approach to inclusion and
diversity, its objectives and linkage to Company strategy, their
implementation and the gender balance of those in Senior
Management and their direct reports. Following the review,
the Group Inclusion and Diversity Policy was updated to underpin
and support the requirements in the Code that succession plans
across the Group are based on merit and objective criteria, and
promote diversity of gender, social and ethnic backgrounds, and
cognitive and personal strengths. The primary objective of the
Group Inclusion and Diversity Policy is to make RELX a place to
work where our employees feel valued regardless of their gender,
national origin, ethnicity, religion, sexual orientation or identity,
age or disability status. It underpins our Group strategy, by
ensuring the engagement of people from a wide range of
backgrounds and experiences, to generate innovative ideas,
products and solutions that drive significant value for our
customers. Inclusion and diversity across our workforce is
important to our future.
Our approach to inclusion and diversity is supported by the Group’s
activities in this area during the year. We have 70 ERGs (Employee
Resource Groups) across the Group, each focusing on areas such
as Gender Balance, Pride, Race, Culture and Ethnicity, Disability
and Young Professionals. We have an inclusion and diversity
governance framework whereby the ERGs interact with business
leaders and HR leaders in the organisation with the objective of
providing input into diversity and inclusion planning. RELX hosted
its first Global ERG conference attended by 80 ERG leaders and
representatives across all RELX businesses. The objective of this
conference was to create meaningful connections among the ERG
groups and encourage sharing of best practices, innovation and
future ways of working to enhance further a culture of inclusion in
the Group.
As at 12 February 2020, the Group’s Senior Management team
and its direct reports is comprised of 67% male and 33% female.
RELX Annual report and financial statements 2019 | Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverviewRELX Annual report and financial statements 2019 | Report of the Nominations Committee 88
Directors’ Remuneration Report
The Directors’ Remuneration Report (the Report) has been prepared by the Remuneration Committee (the Committee) in
accordance with the UK Corporate Governance Code, the UK Listing Rules and Schedule 8 of the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008, as amended (the UK Regulations).
The Report was approved by the Board.
Introduction
The current remuneration policy was approved by shareholders at the 2017 Annual General Meetings (AGM) for three years and can be
found at www.relx.com/go/remunerationpolicy or on pages 84 to 90 of the 2016 Annual Reports and Financial Statements. As a result,
an updated remuneration policy is being proposed to shareholders for approval (by way of a binding vote) at the 2020 AGM, with the first
awards under the new policy to be granted in the first quarter of 2021. The updated remuneration policy, which is proposed to apply for
three years from the conclusion of the 2020 AGM, is set out on pages 90 to 96.
The implementation of the current remuneration policy during 2019 is described on pages 99 to 111 (the Annual Remuneration Report).
Shareholders will be invited to vote (by way of a non-binding advisory vote) on the 2019 Annual Remuneration Report at the 2020 AGM.
Our report therefore has two parts, the first part starts immediately below and relates to the new proposed remuneration policy and the
second part starts on page 97 and describes the implementation of the current remuneration policy in 2019.
Proposed new remuneration policy
The Committee reviewed the Directors’ current remuneration policy during 2019. In doing so, it took into account the Company’s desire
to retain and attract top executive talent, promote the continued strong strategic and financial performance of the business and maintain
executive alignment with long-term shareholder interests. The Committee considered feedback received from shareholders since
the adoption of the current policy in 2017, as well as developments in UK corporate governance and trends in market practice. The
Committee also reviewed the pay practices of the FTSE 30, reflective of the Company’s position around the middle of this group and
considered the fact that, as a global data analytics and technology-driven business with half of its revenue derived from the US market,
the Group primarily competes for talent with global information and technology companies.
In 2019, the Committee undertook a review of workforce remuneration and related policies and the alignment of incentives and rewards
with culture. Further detail is set out on page 98. The Committee took this into account when considering the proposed new
remuneration policy for Executive Directors. The Committee was also mindful to ensure that the proposed new remuneration policy
is transparent, easy to understand, consistent with the Company’s purpose, values and strategy and provides an appropriate link to
long-term performance.
Earlier this year, we consulted with shareholders (representing a total of c60% of our issued share capital) and shareholder
representative bodies. I would like to express my gratitude for the feedback received, which confirmed our proposal to maintain the
same overall incentive structure as previously and helped to shape the changes to the current policy which we have decided to propose.
We had a high level of engagement and are pleased to report that virtually all investors who provided feedback indicated support for the
proposed approach.
Aspects of the current policy which we are proposing to keep the same
Incentive structure: In our last remuneration policy review, we simplified our incentive structure by reducing the number of plans we
operated to one Annual Incentive Plan (AIP) (with a share deferral element) and one Long Term Incentive Plan (LTIP). The Committee is
comfortable with this simplified incentive structure and is therefore proposing to continue with it under the new policy.
Performance measures: The Committee proposes to use the same combination of financial performance measures for the incentive
plans as these have supported consistent, predictable and strong financial performance by the business and significant value creation
for shareholders over the last eight years. Our business strategy continues to be to grow the core business through organic investment
and the build-out of new products, with bolt-on acquisitions where we are the natural owner, as well as portfolio rationalisation through
selective divestments. The EPS, ROIC and TSR performance metrics for the LTIP align with, and support, our strategy by focussing on
sustained earnings growth, return on invested capital and shareholder returns.
Discretion and recovery provisions: The Committee has discretion to vary the level of payout under the AIP and LTIP, taking into account
RELX’s overall business performance including environmental, social and governance matters and value created for shareholders over
the period and other relevant factors. AIP and LTIP are also subject to malus and claw-back provisions in case of materially misstated
financial or other data, serious misconduct and breach of post-termination restrictive covenants.
RELX Annual report and financial statements 2019 | Governance 89
Proposed changes to the remuneration policy
Overall quantum: As a result of our plans to reduce the value of the pension benefits for Executive Directors, the overall compensation
opportunity for Executive Directors will go down during the new policy period. It is proposed to maintain the overall quantum of the other
components of pay at the same levels as under the current policy, therefore no changes are proposed to the policy on base salary and
benefits or to the maximum awards under the AIP and the LTIP. The Committee believes that the overall level of remuneration is
appropriate given comparisons to the FTSE 30 and taking into account the US market in which we compete for talent. The full range of
performance outcomes applicable to each of the CEO and CFO have been set out in the performance scenario charts.
Pension alignment with the workforce: The Committee reviewed the existing pension policy for Executive Directors in light of the
arrangements for the wider workforce and, as a result, is proposing a new pension policy which provides that newly appointed Executive
Directors will receive pension benefits that are of no higher value than the level of pension benefits provided under the Company’s
regular defined contribution pension plans (currently capped at 11% of base salary in the UK). This is designed to ensure alignment of the
maximum values of pension benefits for Executive Directors and the wider workforce. The existing Executive Directors will transition
from their current arrangements over the period 2020 to 2022 and will be subject to this new appointment Executive Director pension
policy and hence be aligned with the wider workforce after 31 December 2022.
In the case of the CEO, who is a member of a legacy UK defined benefit pension scheme, during this transition period he will pay
significantly increasing Total Plan Fees (which include contributions and a participation fee) amounting to 25% of pensionable earnings
in 2020, 30% of pensionable earnings in 2021 and 35% of pensionable earnings in 2022, and will then cease to accrue further benefits
under this scheme at the end of 2022. The CFO currently receives a company contribution paid as cash in lieu of pension. This
contribution is reduced to 20% of base salary for 2020 and will further decrease to 18% for 2021 and to 16% for 2022. After 31 December
2022, the existing Executive Directors will both be subject to the new appointment Executive Director pension policy (currently capped at
11% of base salary in the UK).
Annual Incentive Plan (AIP): It is proposed to formalise our current practice by increasing the minimum weighting of financial measures
from 70% to 85% in our policy. Any non-financial measures will be focused on sustainability metrics thereby increasing their weighting
compared with current practice.
The Committee also proposes to lower the AIP payout at target performance from 150% to 135% of base salary. The maximum remains
at 200% of base salary. Given the Company’s financial profile, value drivers and business model, the Committee does not believe it is
appropriate to provide executives the opportunity to double their AIP payout from the target payout levels, and proposes to cap the AIP
opportunity at approximately 50% above target payout. The Committee believes it sets stretching but achievable targets and while
executives should be eligible to receive payouts above target for outperformance, the emphasis should be on long-term performance.
Consistent with our emphasis on long-term performance, the AIP currently operates on the basis of a one-third deferral into shares
which are released after three years. The Committee is proposing to increase the deferral amount to 50% of the AIP earned, with effect
from the 2021 AIP.
Shareholding requirements: In order to further strengthen the alignment of Executive Directors’ interests to those of shareholders, the
shareholding requirement for the CEO will be increased from 400% of salary to 450% of salary. The CFO’s shareholding requirement will
remain at 300% of salary.
It is proposed to adjust the current policy on post-termination shareholding requirements to make Executive Directors subject to their
full shareholding requirement for two years after leaving the Company.
In line with evolving and accepted market practice, it is proposed that earned AIP deferred shares which are within their three-year
deferral period will only count towards the shareholding requirement on a notional net of tax basis.
In summary, we believe that our remuneration policy has contributed to RELX’s strong and consistent financial performance and
significant value creation for shareholders over the past eight years, and that the proposed changes to pension, AIP and shareholding
requirements reflect evolving shareholder preferences and current UK corporate governance principles.
Wolfhart Hauser
Chair, Remuneration Committee
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 90
Remuneration Policy Report
Set out in this section is the Company’s proposed new remuneration policy for Directors, which, subject to approval by shareholders,
will apply for three years from the conclusion of the RELX PLC AGM to be held on 23 April 2020. The key changes from the previous
remuneration policy (which was first published on pages 84 to 90 of the 2016 Annual Reports and Financial Statements and was
approved by shareholders at the April 2017 Annual General Meetings) and the rationale for the changes are explained in the Committee
Chair’s introduction on pages 88 and 89.
Remuneration policy table – Executive Directors
All footnotes to the policy table can be found on page 93.
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 eight years, Executive Directors’ salary increases have been 2.5% per annum.
Performance framework
N/A
Maximum value
Salary increases will continue to be aligned with the range of increases for the wider employee population and subject to annual
all-employee guidelines. However, as for all employees, 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
Policy for new appointments
Executive Directors appointed after the effective date of this policy will receive pension benefits up to the value equivalent to the
maximum level of pension benefits provided under the Company’s regular defined contribution pension plans as may be in effect or
amended from time to time (currently capped at 11% of base salary in the UK). The defined contribution pension plans are designed to
be competitive and sustainable long-term. Any amount payable may be paid wholly or partly as cash in lieu and may be subject to tax
and social security deductions in various jurisdictions.
Transition arrangements for existing Executive Directors
The existing directors will transition from their current arrangements to the above new appointment policy by the end of 2022.
The CFO currently receives a company contribution paid as cash in lieu of pension. The CFO’s company contribution decreased by five
percentage points to 20% of base salary from January 2020 and further decreases to 18% from January 2021, to 16% from January 2022
and from the end of 2022, he will be subject to the above new appointment policy (currently capped at 11% of base salary in the UK).
The CEO is a member of a UK legacy defined benefit pension scheme, 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 to the plan and fees he pays to participate in the plan (together the ‘Total Plan Fees’) have been increasing annually since
2011. However, the CEO now pays a higher percentage of pensionable earnings as Total Plan Fees in each calendar year than other legacy
members. In 2019, his Total Plan Fees were 20% of pensionable earnings, up from 12.5% in 2018. His total Plan Fees are 25% in 2020 and
increase to 30% in 2021 and to 35% in 2022. A cap applies of 2% per annum on the increase in the CEO’s pensionable earnings (in place
since 2017). Like all other members of the legacy defined benefit pension scheme, the CEO is allowed to switch to the defined
contribution plan at any time. At the end of 2022, the CEO will cease to accrue any further benefits under the legacy defined benefit
pension scheme. After 31 December 2022, he will be subject to the above new appointment policy (currently capped at 11% of base salary
in the UK).
Performance framework
N/A
RELX Annual report and financial statements 2019 | Governance 91
RETIREMENT BENEFITS CONTINUED
Maximum value
Policy
For Executive Directors hired or promoted to the Board after the effective date of this policy, the maximum value is equivalent to the
maximum level of pension benefits provided under the Company’s regular defined contribution pension plans as may be in effect or
amended from time to time (currently capped at 11% of base salary in the UK).
Transition arrangements for existing Executive Directors
For the current CFO, until 31 December 2022, the maximum values applicable are in accordance with the annual reductions in the
company contribution as detailed above under ‘Operation’. After 31 December 2022, he will be subject to the pension policy and
maximum value described above for new appointments.
For the current CEO, the maximum value under the legacy defined benefit scheme is an accrual of 1/30th of final year pensionable
earnings for every year of service until 31 December 2022, minus his applicable annual Total Plan Fees paid whilst accruing the benefit.
As noted above under ‘Operation’, the CEO is subject to increases in the Total Plan Fees which he pays annually as part of his ongoing
membership of this scheme until 31 December 2022, after which he will be subject to the pension policy and maximum value described
above for new appointments.
Recovery of sums paid
No provision.
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 any one-off items, such as
immigration support or 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.
ANNUAL INCENTIVE PLAN (AIP)
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 50% 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 measures 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 financial targets are designed to be challenging and are set with reference to the previous year’s performance and
internal and external forecasts for the following year.
Performance measures may also include non-financial measures, for example linked to sustainability.
Operation
The Committee reviews and sets the financial targets and, if applicable, non-financial targets, annually, taking into account internal
forecasts and strategic plans. Following year end, the Committee compares actual performance with the financial targets and assesses
the achievement of any non-financial targets. The targets and outcomes are fully disclosed in the Remuneration Report published after
year end.
50% of any annual incentive earned is paid in cash to the Executive Director and the remaining 50% is deferred into RELX shares, which
are released to the Executive Director after three years. Dividend equivalents accrued during the deferral period are payable in respect
of the shares. On a change in control, the default position is that deferred shares are released to the Executive Director. Alternatively,
the Committee may determine that deferred shares will instead be exchanged for equivalent share awards in the acquiring company.
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 92
AIP CONTINUED
Performance framework
The AIP includes financial measures with a weighting of at least 85% and may also include non-financial measures with a weighting of up
to 15%. Each measure is assessed separately.
§§ The minimum payout is zero.
§§ Each measure is assessed independently and payout for each measure at threshold is 10% of the maximum opportunity for that
measure. If the financial measures have a weighting of 100% and threshold is reached for each of the financial measures, the overall
payout for the financial measures is 13.5% of salary. If the financial measures have a weighting of 85% and threshold is reached for
each of the financial measures, the overall payout for the financial measures is 11.5% of salary.
§§ Payout for target performance is 135% of salary.
Following an assessment of financial achievement, and scoring of any non-financial measures, the Committee agrees the overall level
of earned incentive for each Executive Director.
Committee discretion applies.1,2,3
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.4
LONG TERM INCENTIVE PLAN (LTIP)
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 (450% 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.
§§ Each measure is assessed independently and payout for each measure at threshold is 25% of the maximum opportunity for that
measure. If only one measure vests at threshold, and it has a weighting of 40%, then the overall payout would be 10% of the maximum
award. If only one measure with a weighting of 20% vests at threshold, the overall payout would be 5% of the maximum 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.1,2,3
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.4
RELX Annual report and financial statements 2019 | Governance 93
Notes to the Remuneration policy table
(1) 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.
(2) 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.
(3) 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 95.
(4) 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.
(5) 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 may vary according to local market practice, role and seniority. This is to ensure that we provide competitive packages
which are appropriate to specific roles. However, as noted above in the pension section of the policy table, the proposed policy on Executive
Directors’ pension arrangements results in alignment of the maximum values of pension benefits for newly appointed Executive Directors
and the wider workforce following shareholder approval of the remuneration policy and for existing Executive Directors by the end of 2022.
(6) 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 Chair’s introduction on pages 88 and 89.
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 2020
salary. Benefits is based on the 2019 Single Total Figure table. Pension, annual incentive and LTIP are all based on full implementation of
all aspects of the policy table’s award levels and percentages (including 11% pension), applied to the 2020 salary. Annual incentive amounts
include the portion which is subject to compulsory deferral into RELX shares for three years. 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 135% of salary
(of which a portion is deferred into shares) and LTIP vesting at 50% of the award. Maximum means AIP payout at 200% of salary (of which
a portion is deferred into shares) and LTIP vesting at 100% of the award. The three bars in each chart assume no share price movement.
As required by the UK Regulations, assuming maximum performance achievement (as described above) and 50% share price growth over
the performance period, the CEO’s maximum remuneration would increase to £12.7m and the CFO’s maximum remuneration to £6.6m.
Any dividend equivalents payable in respect of the AIP deferred shares and the LTIP are not included.
CEO REMUNERATION (£’000)
CFO REMUNERATION (£’000)
9,828
59%
26%
15%
6,115
47%
28%
25%
1,507
100%
Minimum
In line with
expectations
Maximum
LTIP
AIP cash and deferred shares
Salary, benefits, pension
LTIP
AIP cash and deferred shares
Salary, benefits, pension
5,186
55%
29%
16%
3,282
43%
31%
26%
In line with
expectations
Maximum
851
100%
Minimum
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 94
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.
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 global
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 450% 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. On termination of employment, Executive Directors are to maintain their
full shareholding requirement (or, if lower, their actual level of shareholding at the time of leaving) for two years after leaving employment.
Shares which count for shareholding purposes are shares beneficially owned by the Executive Director, their spouse, civil partner or
dependent child and AIP deferred shares which are within their three-year deferral period, on a notional net of tax basis.
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.
RELX Annual report and financial statements 2019 | Governance 95
Policy on payments for loss of office (continued)
GENERAL1
INCENTIVES
Mutually agreed termination/termination by the Company other than for cause2
(includes retirement with customary notice)
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). AIP deferred shares would be
released to the Executive Directors 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
full shareholding requirement for two years after the termination
date. 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. The
requirement to retain net (after tax) vested LTIP shares for a
holding period of two years after vesting ceases to apply on
termination of employment.
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
AIP deferred shares would be released to the Executive Director 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 AIP deferred shares lapse on the
date of dismissal.
LTIP: All outstanding LTIP awards would lapse on the date of
dismissal.
(1) 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.
(2) 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.
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 96
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 Board and Committees of a global business which is listed in London, Amsterdam and New York.
Operation
RELX Chair: Receives an aggregate annual fee with no additional fees, for example, Committee Chair fees. The Committee determines
the Chair’s fee on the advice of the Senior Independent Director.
Other Non-Executive Directors: Receive an annual fee with additional fees payable as appropriate for specific roles and duties. These
additional fees include fees for the Senior Independent Director and Committee Chairs, for membership of Board Committees, as well
as a workforce engagement fee and international travel fees. In future, other fees may be payable, for example attendance fees. The
Board determines 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 Chair and the Non-Executive Directors is £2m. Additional fees for membership of or
chairing Board Committees and assuming additional responsibilities such as acting as Senior Independent Director, are not subject to
this maximum limit.
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 in the Company’s major operating
locations for the forthcoming year. The Committee also considers
market practice in the FTSE 30 as well as pay practices of other
global information and technology companies when determining
the quantum and structure of Directors’ pay.
Since 2019, the Committee annually reviews various aspects of
workforce remuneration and related policies in order to deepen
its understanding of pay structures throughout the organisation.
Also since 2019, our designated non-executive director responsible
for workforce engagement meets with employees representing our
global employee population in order to understand a wide-range of
employee views on a variety of topics. The feedback is reported back
to the Board at least once per year and forms part of the Board’s
discussions and decision making. As part of this process, the
non-executive director responsible for workforce engagement
explains how executive remuneration aligns with wider pay policy.
Consideration of shareholder views
Our practice is to consult shareholders and consider their views when
formulating, or changing, our policy. The Committee consulted
extensively with shareholders (representing c60% of the Company’s
issued share capital) and shareholder representative bodies 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 previous remuneration policies
(which are included in the 2013 and 2016 Annual Reports and
Financial Statements) will be made consistent with the applicable
policy. The provisions of the previous policies which relate to
arrangements and awards granted under those previous policies
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 2013
or 2016 policy or prior to an individual being appointed as a Director.
Minor amendments
The Committee may make minor amendments for regulatory, tax
or administrative purpose.
RELX Annual report and financial statements 2019 | Governance 97
Foreword to the Annual Remuneration Report
The Annual Remuneration Report reflects the 2019 annual incentives earned and the vesting outcomes for multi-year incentives granted
under the remuneration policy applicable to the 2017–2019 cycle of the multi-year plans.
As you will have read in the Annual Report, the Company’s strategic priority is the organic development of increasingly sophisticated
information-based analytics and decision tools that deliver enhanced value to customers. During 2019, RELX continued to successfully
execute this strategy, which is aimed at achieving more predictable revenues, a higher growth profile and improving returns.
Underlying revenue growth was 4%, underlying adjusted operating profit growth was 5% and adjusted earnings per share (EPS
at constant currencies) grew 7%. We also continued to build on our strong ESG performance during the year, and this was again
recognised by the positive ratings given to us by a number of external agencies. In 2019 RELX was ranked second in the S&P Global 1200
for ESG performance based on CSRHub data, and sixth in the newly launched Responsibility 100 index of FTSE 100 companies measured
against the United Nations 17 Sustainable Development Goals (SDGs). In 2019 RELX also retained its AAA ESG rating with MSCI for the
fourth consecutive year, and in January 2020 a Sustainalytics ESG report put RELX in the top one percent of over twelve thousand
companies covered.
The performance measures in the incentive plans align with and support the strategy by focussing on sustained earnings growth,
return on invested capital and shareholder returns. The performance measures are based on adjusted figures as they provide
relevant information in assessing the Company’s performance, position and cash flows and we believe they track the core operational
performance of RELX and how it contributes to shareholder value creation. The Annual Report includes a reconciliation of adjusted
measures to IFRS measures. The Committee also considers environmental, social and governance performance when determining
variable pay outcomes.
2019 Outcomes
The strong financial performance of the business is reflected in the 2019 annual incentive achievement for Executive Directors of slightly
ahead of the target level. Two-thirds of the amount earned will be paid in cash to the Executive Directors in March 2020 and the remaining
one-third is deferred into RELX shares which will be released in Q1 2023.
The continued strong long-term performance of the Company is reflected in the vesting of the 2017–2019 cycles of the multi-year plans.
The 2017–2019 cycle of the Long-Term Incentive Plan (LTIP) vested at 71%. The discontinued Bonus Investment Plan (BIP) and the
Executive Share Option Scheme (ESOS), which is the last cycle of these plans, vested at 89% and 88% respectively. These outcomes
reflect strong returns and earnings growth achieved by the business and how the challenging targets set by the Committee have been
perceived by the market. In determining the level of payout under the annual incentive and the multi-year incentives, the Committee took
into account RELX’s overall business performance and value created for shareholders over the period in review and other relevant
factors and concluded that the reward outcomes were proportionate in light of the Company’s performance and had operated as
intended in terms of quantum. As a result, the Committee did not exercise any discretion to adjust the 2019 reward outcomes.
The Committee is also satisfied that the overall remuneration for Executive Directors is appropriate and fair based on comparisons
to the FTSE 30, reflective of the Company’s position in the middle of this group and taking into account that the Company primarily
competes for talent with global information and technology companies. The Committee also considered senior executive pay levels
and wider workforce remuneration across RELX, as well as CEO to UK employee pay ratios.
Updated Corporate Governance Code
Following publication by the Financial Reporting Council (FRC) of the updated Corporate Governance Code in July 2018, the Committee
reviewed a number of areas and implemented several changes during 2019. The Committee also monitored investor guidance and
evolving best practice. A summary of areas reviewed and changes made is set out below:
§§ The Committee’s remit was expanded to include setting pay for senior management, i.e. the CEO’s direct reports.
§§ The Committee’s Terms of Reference were updated to reflect the new requirement that an appointee should have served on a
remuneration committee for at least 12 months before appointment as chair of the Committee.
§§ The Committee reviewed its policy on post-termination shareholding requirements for Executive directors, and has proposed an
update as part of the new Directors’ remuneration policy being put to shareholders for approval in April 2020. Further information
is set out on page 94.
§§ The value of pension benefits for current Executive Directors has decreased over the last several years, prior to the new UK
Corporate Governance Code coming into force. As part of the proposed new remuneration policy, the Committee is proposing a
revised pension policy for newly appointed Executive Directors which is aligned to the general workforce. Transition arrangements
for existing Executive Directors have been put in place so that the value of their pension benefits will be aligned with the regular
defined contribution plans (currently capped at 11% in the UK) by the end of 2022. Further information is set out on page 104.
§§ In addition to disclosing the target amount for each of the 2019 AIP financial measures, we have provided the actual threshold and
maximum amounts in the 2019 AIP table to further improve the clarity and simplicity of our disclosures.
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 98
Broader employee reward
The Committee has previously reviewed certain aspects of wider-workforce remuneration (such as annual salary increase guidelines
globally and executive share plan participation). In 2019 the Committee undertook a more wide-ranging review to increase its
understanding of broader employee reward so that it can consider this to an even greater extent when making decisions about Executive
Directors’ pay.
The Committee reviewed the RELX global reward philosophy, which aims to support the Company’s ability to attract, motivate and
retain high performing employees. The Company’s reward principles are underpinned by external equity, internal equity and pay for
performance and we aim to pay around the median of the relevant local operating market for base salary and benefits with opportunity
towards the upper quartile for sustained superior performance. The Committee also considered and reviewed the following aspects of
workforce remuneration and related policies:
§§ key statistics on the composition of the RELX workforce such as location, gender, age and length of service;
§§ pay philosophy and the evolution of our pay practices, including pay equity processes;
§§ details of the pension plan arrangements in our top five countries by number of employees;
§§ a summary of our main benefits policies globally;
§§ participation data on annual incentives (sales and non-sales), including gender splits;
§§ participation data related to the executive share plans and local ‘all-employee’ share plans;
§§ Employee Opinion Survey responses on reward related questions.
The Committee took into account its review of workforce remuneration when designing the proposed new remuneration policy for
Executive Directors. The Committee will continue to review workforce remuneration as a regular agenda item each year.
The Committee also considered the alignment of incentives and rewards with culture and is satisfied that the incentive schemes drive
the desired behaviours to support the Company’s purpose, values and strategy.
Our designated non-executive director responsible for workforce engagement, Marike van Lier Lels, met with employee
representatives from Europe, US and Asia Pacific during 2019 in order to understand a wide-range of employee views. She reported
back to the Board and the feedback and insights gathered formed part of the Board’s discussions and decision making. Further
information on the workforce engagement process is provided in the Governance section on page 76. As part of this process, Ms van Lier
Lels explained how executive remuneration aligned with wider pay policy.
As required under the Companies (Miscellaneous Reporting) Regulations 2018, we have included in the annual remuneration report
ratios of the CEO’s 2019 single total figure of remuneration to the median, the 25th percentile and the 75th percentile UK employees
ranked by total remuneration using prescribed methodology A (see page 109).
2020 Implementation of Remuneration Policy
In line with increases for the wider employee population, and consistent with the 2020 salary increase guidelines for UK-based
employees, the Committee has approved 2020 salary increases for the Executive Directors of 2.5%. After taking into account the
increasing pension Total Plan Fees, which the CEO pays as part of his ongoing membership of the legacy defined benefit pension plan,
his 2020 salary after these increasing fees will decrease again in 2020 compared to 2019.
The Board conducted its biennial review of Non-Executive Directors’ fees at the end of 2019 and considered, among other things,
relevant market data for the FTSE 30 in making its adjustments. The fees for 2020 are set out on page 103.
The audited sections of the Report are clearly marked.
Wolfhart Hauser
Chair, Remuneration Committee
RELX Annual report and financial statements 2019 | Governance 99
Annual Remuneration Report
Single Total Figure of Remuneration – Executive Directors (audited)
£’000
Erik Engstrom
Nick Luff
(a)
(b)
(c)
(d)
(e)
(f)
Annual incentive
2019
2018
2019
2018
Salary
1,249
1,218
735
717
Benefits(1)
86
85
15
14
Cash
1,276
1,269
749
753
Deferred
Share based
Shares(2)
638
635
375
376
awards(3)
4,894
5,388
2,449
2,697
Pension(4)
539
545
186
196
Total
8,681
9,141
4,510
4,754
(1) Benefits are typically comprised of a car allowance, private medical/dental insurance and the cost of tax return preparation.
(2) One-third of the 2018 and 2019 AIP is paid in shares deferred for three years. Dividend equivalents accrue on these shares.
(3) The 2019 figures reflect the vesting of the 2017–2019 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 2019 have been used to arrive at an estimated
figure in respect of these awards, in line with the methodology prescribed by the Regulations.
The estimated figures for 2018 disclosed in last year’s Report have been restated to reflect the actual amount vested and the actual
share prices and exchange rates, which increased the 2018 disclosed figure by £726k for the CEO and by £356k for the CFO. The
vesting percentages were determined on 22 February 2019 and were in line with those disclosed on pages 90 and 91 of the 2018
Remuneration Report.
For Erik Engstrom, the amount that directly reflects share price appreciation is £2.2m for 2018 and £1.5m for 2019 (of which £0.6m
relates to the LTIP, £0.3m relates to the BIP and £0.7m relates to the ESOS). For Nick Luff, these numbers are £1.1m for 2018 and
£0.7m for 2019 (of which £0.3m relates to the LTIP, £0.2m relates to the BIP and £0.3m relates to the ESOS). The figures add up to
different amounts than the totals due to rounding. The slight differences to the numbers in the table are also solely due to rounding.
The awards are due to vest in February 2020 and the 2019 figures will be restated in next year’s report to reflect actual values at vesting.
No discretion was applied by the Remuneration Committee in determining the vesting outcome percentages.
(4) The pension figure for Erik Engstrom reflects his current membership of the UK legacy defined benefit pension scheme and has
been calculated in accordance with the prescribed methodology set out in the Regulations. This figure does not represent a
contribution by the Company. In 2019, the Company contributed £53,297 to the funded portion of his defined benefit pension plan.
The remainder of his accrued pension is an unfunded liability of the Company.
In 2019, the CEO contributed a total of £246,353 (20% of his pensionable earnings) by way of Total Plan Fees, up from £151,306 (12.5%
of pensionable earnings) in 2018. The pension figures for 2019 and 2018 in the table are reduced by these Total Plan Fees. For details
of Mr Engstrom’s accrued pension as at 31 December 2019, and further information on his pension reduction in 2020 and the coming
years, see page 104.
Nick Luff receives a cash allowance in lieu of pension which reduced from 27% of salary to 25% of salary effective 1 March 2019.
For details on the reduction of the CFO’s allowance in 2020 and the coming years, see page 104.
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The total remuneration for Directors is set out in note 26 to the consolidated financial statements on page 168.
2019 Annual Incentive
Set out below is a summary of performance against each financial measure and non-financial KPO and the resulting annual incentive
payout for 2019:
Performance
measure
Revenue
Adjusted net profit
after tax
Cash flow
Non-financial Key
Performance
Objectives (KPOs)
Total
Relative
weighting
% at target
35%
35%
15%
15%
100%
Financial targets (1)
Threshold
£7,429
£1,692
Target
£7,904
£1,800
Maximum
£8,299
£1,890
Achievement
£7,874
£1,808
Achievement %
vs target
99.6%
100.5%
Payout %
vs target
94.0%
105.0%
Erik Engstrom
Nick Luff
Weighted
Payout
% of target
32.9%
36.8%
Weighted
Payout
% of target
32.9%
36.8%
£2,204
£2,344
£2,462
£2,403
102.5%
125.0%
A detailed description of the non-financial KPOs and achievement against
those KPOs for each Executive Director is set out below.
18.8%
13.75%
18.8%
13.5%
Total AIP payout as % of salary
100%
Cash
Deferred Shares 50%
Total
150%
Some figures add up to different amounts than the totals due to rounding.
102.2%
101.9%
102.2%
51.1%
153.2%
101.9%
51.0%
152.9%
The Cash AIP (£1,275,714 for the CEO and £749,388 for the CFO) will be paid in Q1 2020 and the Deferred Shares (with a current value of
£637,857 in the case of the CEO and £374,694 in the case of the CFO) will be released in Q1 2023. The release of Deferred Shares is not
subject to any further performance conditions, but is subject to malus and claw-back.
(1) (On an equivalent basis (at actual exchange rates and after the net impact of acquisitions and disposals completed during the year).
Non-financial measures (KPOs) – Erik Engstrom
Non-financial measures (KPO)
Risk Mitigation
Relative
weighting
% at target Achievement vs KPO
3%
This KPO was almost fully achieved.
§ Cyber security training provided to 100% of employees; enhanced social engineering
testing (e.g. phishing simulations) of all staff combined with a mandatory re-training
program; role-based security briefings held for three higher-risk groups. Target
almost fully met.
Customers
3%
§ An end-to-end major security incident table-top simulation (including testing of low
level operational elements) completed within one business area and results
summarised to all other business areas and incorporated into the Incident Response
Plan; crisis response/media training completed for two business areas. Target met.
§ Further reinforce culture of integrity with RELX ‘Do The Right Thing’ principles
developed with compliance leads across the business areas and incorporated into
RELX Ethical Leader communications and online training. Target met.
This KPO was almost fully achieved
§ New Editorial Policy training rolled out for staff. Target met.
§ Expanded online content on Corporate Responsibility for customer facing employees.
Migrated to a new intranet and refreshed all related content including a new resource
on talking to our customers about the SDGs. Target met.
§ Accessibility Advisory Board developed. Accessibility Board created representing all
business areas focused on standardising accessibility training, compliance models,
automated testing and enterprise-wide communications. Target almost fully met.
Payout %
of target
2.75%
2.75%
People
3%
This KPO was almost fully achieved
§ Additional inclusion initiatives launched; a dashboard to measure inclusion progress
2.75%
rolled out across the Group. Target met.
§ Progress made against our UN Equal Pay International Coalition commitments with
the completion of a job architecture project and its integration into new human
resources information system and the implementation of an action plan following pay
equity audits. Target met.
§ Mental Health metrics developed utilising absence, percentage of annual leave
taken and exit interview data. Expanded Well-being Champions Network. Target
almost fully met.
RELX Annual report and financial statements 2019 | Governance
Non-financial measures (KPOs) – Erik Engstrom
Non-financial
measure (KPO)
Process
Relative
weighting
% at target Achievement vs KPO
3%
This KPO was almost fully achieved
§ Number of suppliers signed up to the RELX Supplier Code of Conduct increased by 3.9% from last year.
Environment 3%
Target met.
§ Continued use of audits to ensure continuous improvement in supplier performance and compliance;
number of supplier audits completed increased over prior year. Target met.
§ Continued to advance the US Supplier Diversity & Inclusion programme – spend with veteran, women
and minority-owned businesses increased, with overall spend with diverse suppliers increased
compared to previous year at 11.9%. Target almost fully met.
This KPO was fully achieved
§ Renewable electricity purchased as a percentage of global consumption increased to 96%. Reduced
Scope 1 and Scope 2 CO2 emissions by 52% below the 2010 baseline ahead of the 2020 target of 40%.
Target exceeded.
§ Reduced our energy and fuel consumption by 41% below the 2010 baseline, ahead of our 2020 target of
30%. Target exceeded.
§ Reduced waste generated at reporting locations by 66% below the 2010 baseline, ahead of our 2020
Total
15%
target of 40%. Target exceeded.
Non-financial measures (KPOs) – Nick Luff
Non-financial
measure (
KPO)
Risk
Mitigation
Relative
weighting
% at target Achievement vs KPO
3%
This KPO was almost fully achieved
§ Cyber security training provided to 100% of employees; enhanced social engineering testing (e.g.
101
Payout %
of target
2.5%
3%
13.75%
Payout %
of target
2.75%
phishing simulations) of all staff combined with a mandatory re-training program; role-based security
briefings held for three higher-risk groups. Target almost fully met.
§ An end-to-end major security incident table-top simulation (including testing of low level operational
elements) completed within one business area and results summarised to all other business areas
and incorporated into the Incident Response Plan; crisis response/media training completed for two
business areas. Target met.
§ Further reinforce culture of integrity with RELX ‘Do The Right Thing’ principles developed with
compliance leads across the business areas and incorporated into RELX Ethical Leader communications
and online training. Target met.
This KPO was almost fully achieved
§ Optimised the Group’s distributable reserves position, with shareholder approval, following the
2.5%
corporate structure simplification last year. Target met.
§ Further reduced the number of legal entities in the Group’s corporate structure. Target almost fully met.
§ Internal funding arrangements realigned within the simplified corporate structure. Target met.
This KPO was almost fully achieved
§ Further improvements made to the effectiveness and efficiency of the finance function. Target almost
2.5%
fully met.
§ Increased use of robotic process automation in the finance function. Target almost fully met.
§ Actively promoted inclusion and diversity in the finance function with Talent Boards launched in the UK
and the US. Target met.
Corporate
Structure
3%
Finance
Function
3%
Financing /
Benefits
3%
This KPO was almost fully achieved
§ External bond financing resulting in a reduction in interest costs. Target met.
§ UK pension triennial modification plan completed and resulting follow up actions implemented. Target
2.75%
Environment 3%
almost fully met.
§ Reviewed and standardised US employee benefits. Target met.
This KPO was fully achieved
§ Renewable electricity purchased as a percentage of global consumption increased to 96%. Reduced
Scope 1 and Scope 2 CO2 emissions by 52% below the 2010 baseline ahead of the 2020 target of 40%.
Target exceeded.
§ Reduced our energy and fuel consumption by 41% below the 2010 baseline, ahead of our 2020 target of
30%. Target exceeded.
§ Reduced waste generated at reporting locations by 66% below the 2010 baseline, ahead of our 2020
Total
15%
target of 40%. Target exceeded.
3%
13.5%
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 102
Multi-year incentives (granted under the Remuneration Policy in effect prior to the approval by shareholders of the current
Remuneration Policy at the Annual General Meetings in April 2017)
Multi-year incentives with a performance period ended 31 December 2019 were the 2017–2019 cycles of BIP, LTIP and ESOS granted to
Executive Directors. Following the simplification of the remuneration plans approved by shareholders at the Annual General Meetings
in 2017, these are the final cycles of the BIP and, for Executive Directors, the ESOS.
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: 2017–2019 cycle performance outcome
Performance
measure
TSR over the three-year
performance period(2)
Weighting
1/3rd
Average growth in adjusted EPS over
the three-year performance period(3)
1/3rd
ROIC in the third year of the
performance period(3)
1/3rd
Achievement against the
performance range
Between median and
upper quartile of
sterling and euro
comparator groups
just above median of
US dollar group
6.8% p.a
Resulting vesting
percentage
59.5%
62.5%
13.7%(4)
91%
Performance range and
vesting levels set at grant (1)
below median
median
upper quartile
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 12.5%
12.5%
12.75%
13.0%
13.25%
13.5%
13.75%
14.0% and above
0%
30%
100%
0%
33%
52.5%
65%
75%
85%
92.5%
100%
0%
33%
52.5%
65%
75%
85%
92.5%
100%
Total vesting percentage:
71.0%
(1) Calculated on a straight-line basis for performance between the points.
(2) In respect of the euro TSR comparator group, RELX NV shares were, subsequent to the merger of RELX NV into RELX PLC, replaced with Euronext Amsterdam listed
RELX PLC shares priced in euros and, in respect of the US dollar TSR comparator group, RELX NV ADRs were, subsequent to the merger, replaced with RELX PLC ADRs.
(3) Growth in adjusted EPS at constant currencies and ROIC are calculated as set out in the Chief Financial Officer’s report on pages 52 to 57 and note 10 to the consolidated
financial statements on page 148, 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.
(4) For 2019, ROIC on pages 55 and 56 of the Chief Financial Officer’s report of 13.6% equates to ROIC of 13.7% under the plan methodology after adjustments for changes in
exchange rates, pension deficits and accounting standards and impact of acquisition related integration costs.
BIP: 2017–2019 cycle performance outcome (final cycle of the discontinued BIP)
Performance
measure
Average growth in adjusted EPS over
the three-year performance period(2)
ROIC in the third year of the
performance period(2)
Total vesting percentage:
Weighting
50%
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 12.5%
12.5%
13.0%
13.5% or above
0%
50%
75%
100%
0%
50%
75%
100%
Achievement against the
performance range
6.8% p.a.
Resulting vesting
percentage
78%
13.7%(3)
100%
89.0%
(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 52 to 57 and note 10 to the consolidated
financial statements on page 148, 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 2019, ROIC on pages 55 and 56 of the Chief Financial Officer’s report of 13.6% equates to ROIC of 13.7% under the plan methodology after adjustments for changes in
exchange rates, pension deficits and accounting standards and impact of acquisition related integration costs.
RELX Annual report and financial statements 2019 | Governance 103
ESOS: 2017–2019 cycle performance outcome (final cycle of ESOS, now discontinued for the Executive Directors)
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
6.8% p.a.
Resulting vesting
percentage
88%
(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 52 to 57 and note 10 to the consolidated financial
statements on page 148.
Single Total Figure of Remuneration – Non-Executive Directors (audited)
Anthony Habgood
Wolfhart Hauser
Adrian Hennah
Charlotte Hogg (2)
Marike van Lier Lels(3)
Robert MacLeod
Carol Mills(4)
Linda Sanford
Andrew Sukawaty(5)
Ben van der Veer(3)(4)
Suzanne Wood
Total fee
Benefits(1)
Total
2019
£650,000
£159,500
£129,500
£3,269
£124,583
£109,667
£41,984
£120,500
£76,699
£27,353
£120,500
2018
£650,000
£159,500
£118,990
N/A
€ 126,651
£107,000
£125,000
£125,000
N/A
€ 124,696
£116,000
2019
£1,665
£840
£840
£840
£840
£840
2018
£2,360
£780
£780
N/A
€ 949
£780
£1,620
£1,620
N/A
€ 949
2019
£651,665
£159,500
£129,500
£3,269
£125,423
£109,667
£42,824
£121,340
£76,699
£28,193
£121,340
2018
£652,360
£160,280
£119,770
N/A
€ 127,600
£107,780
£126,620
£126,620
N/A
€ 125,645
£116,000
(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 RELX. The incremental assessable benefit charge per tax return for 2019 was £840 (unchanged from 2018) for a UK tax return. Anthony Habgood’s benefits comprise
£1,665 (£1,580 in 2018) 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 Chair in the course of performing their duties.
(2) Appointed on 16 December 2019.
(3) The pound sterling equivalent of the total fees and benefits for Marike van Lier Lels and Ben van der Veer for 2018 (converted at the average exchange rate for 2018) were
£112,920 and £111,190 respectively. For the purposes of reporting the total fees and benefits for these two Directors for 2018, the pound sterling benefit relating to the UK
tax return preparation was converted into euros at the average exchange rate for 2018. From 2019, their fees are denominated in pound sterling.
(4) Retired at the 2019 AGM.
(5) Appointed on 25 April 2019.
(6) The total remuneration for Directors is set out in note 26 to the consolidated financial statements on page 168.
Non-Executive Directors’ fees
The fees in the Single Total Figure table for Non-Executive Directors reflect the following fees in 2019:
Chair
Non-Executive Directors
Senior Independent Director
Chair of:
– Audit Committee
– Remuneration Committee
Workforce engagement fee
Committee membership fee:
– Audit Committee
– Remuneration Committee
– Nominations Committee
Annual fee 2020
£650,000
£90,000
£30,000
£30,000
£30,000
£17,500
£17,500
£17,500
£10,000
Annual fee 2019
£650,000
£85,000
£30,000
£30,000
£30,000
£17,500
£17,500
£17,500
£10,000
In addition, an intercontinental travel fee of £4,500 was payable to any Non-Executive Director (excluding the Chair) in respect of each
transatlantic journey made in order to attend a RELX Board or Committee meeting during 2019. In 2020, this fee will remain at £4,500.
Fees may be reviewed annually, although in practice they have changed on a less frequent basis. At the end of 2019, the Non-Executive
Director and the Chair fees were each reviewed, taking into account comparative benchmark data, market practice and general
governance trends. As a result, certain changes were approved which took effect on 1 January 2020 as set out in the table above. Before
that, the last review took place at the end of 2017, as a result of which changes were approved which took effect on 1 January 2018.
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Total pension entitlements (audited)
Erik Engstrom is a member of the legacy UK defined benefit pension plan. Subject to approval of the new remuneration policy being
put forward for shareholder approval at the 2020 AGM, he will cease to accrue benefits under this plan at the end of 2022, at which
point he will receive pension benefits of equivalent value to the level of pension benefits provided under the Company’s regular defined
contribution pension plans as may be in effect or amended from time to time (currently capped at 11% of base salary in the UK).
Mr Engstrom’s contributions and participation fee (together, the Total Plan Fees), which are payable by him as part of his ongoing
membership of the scheme, have been increasing annually since 2011. In 2019, his Total Plan Fees were 20% of his pensionable earnings
(i.e. £246,353), up from 12.5% in 2018. His Total Plan Fees will increase to 25% of pensionable earnings in 2020, 30% in 2021 and 35% in
2022. Mr Engstrom is also subject to a cap of 2% on annual increases in pensionable earnings.
Nick Luff receives a cash allowance in lieu of pension, which reduced from 27% of salary to 25% of salary on 1 March 2019 and reduced
to 20% of base salary on 1 January 2020 and will continue to reduce each year until the end of 2022, at which time Mr Luff will receive
pension benefits of equivalent value to the level of pension benefits provided under the Company’s regular defined contribution pension
plans as may be in effect or amended from time to time (currently capped at 11% of base salary in the UK).
Erik Engstrom – pension information
Age at December 2019
56
Normal retirement age
60
CEO’s Total Plan Fees
£246,353
Accrued annual pension at
31 December 2019
£499,568
2019 single figure
pensions value
£538,862 (1)
(1) The 2019 single figure pensions value is the difference between the accrued annual pension as at 31 December 2018 (adjusted for inflation) and the accrued annual pension
as at 31 December 2019, multiplied by 20 in accordance with the UK Regulations and is net of the CEO’s Total Plan Fees.
Scheme interests awarded during the financial year (audited)
LTIP – PERFORMANCE SHARE AWARDS
Basis on which
award is made
Erik Engstrom 450% of salary
Face value of
award at grant(1)
£5,482,809
Value of awards
if vest in line with
expectations(2)
£2,741,405
Percentage of maximum that
would be received if threshold
performance achieved
If each measure pays out
at threshold, the overall payout
is 25%
End of
performance
period
31 December
2021
Nick Luff
375% of salary
£2,690,533
£1,345,267
AIP – DEFERRED SHARES
Erik Engstrom 1/3 of 2018 AIP
Nick Luff
payout
1/3 of 2018 AIP
payout
£634,639
£376,409
N/A. The release of AIP Deferred Shares in Q1 2022 is not subject to any
further performance conditions, but is subject to malus and claw-back.
(1) The face value of the LTIP awards and AIP Deferred Shares granted in February 2019 was calculated using the middle market quotation of a PLC ordinary share (£17.6975).
This share price was used to determine the number of awards granted.
(2) Vesting in line with expectations for LTIP is as per the performance scenario chart disclosed on page 87 of the 2016 Remuneration Report, i.e. 50%.
The LTIP awards granted in 2019 are based on ROIC, EPS and TSR weighted 40%:40%:20% respectively and assessed independently.
The targets and vesting scales applicable to these awards are set out on pages 97 and 98 of the 2018 Remuneration Report.
RELX Annual report and financial statements 2019 | Governance
105
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 RELX. The shareholding requirements applicable to the Executive Directors are set out
in the table below Shares that count for this purpose are (i) any type of RELX security of which the Director, their spouse, civil partner or
dependent child has beneficial ownership of and (ii) AIP deferred shares which are within their three-year deferral period, on a notional
net (after tax) basis. There has been no change to the interests reported below between 31 December 2019 and 12 February 2020.
Meeting the shareholding requirement is both a vesting condition for LTIP awards granted and a requirement to maintain eligibility for
future LTIP awards.
On 31 December 2019, the Executive Directors’ shareholdings were as follows (valued using the middle market closing prices of the
relevant securities):
Erik Engstrom
Nick Luff
Shareholding requirement
(% of 31 December 2019 annual base salary)
400%
300%
Shareholding as at
31 December 2019 (% of 31 December 2019
annual base salary) (1)
1,620%
742%
(1) Includes AIP deferred shares which are within their three-year deferral period, on a notional net (after tax) basis (19,005 for Erik Engstrom and 11,272 for Nick Luff).
Share interests (number of RELX ordinary shares held)
Erik Engstrom
Nick Luff
Anthony Habgood
Wolfhart Hauser
Adrian Hennah
Charlotte Hogg (from 16 December 2019)
Marike van Lier Lels
Robert MacLeod
Carol Mills (until 25 April 2019)
Linda Sanford
Andrew Sukawaty (from 25 April 2019)
Ben van der Veer (until 25 April 2019)
Suzanne Wood
1 January 2019
1,010,617
265,971
88,450
14,633
10,508
N/A
8,000
6,950
9,700
9,700
N/A
10,766
5,100
31 December 2019
1,014,006 (1)
270,203 (1)
88,450
14,633
10,508
0 (2)
10,907
6,950
N/A
9,700
10,000 (3)
N/A
5,100
N/A denotes that the individual was not a Director at the relevant date.
(1) Number excludes AIP deferred shares which are within their three-year deferral period. If these were included on a notional net (after tax) basis, the totals at 31 December
2019 would be 1,033,011 for Erik Engstrom and 281,475 for Nick Luff.
(2) Charlotte Hogg was appointed effective 16 December 2019.
(3) Andrew Sukawaty was appointed effective 25 April 2019.
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview
106
Multi-year incentive interests (audited)
The tables below and on page 107 set out vested but unexercised and unvested options, unvested share awards and AIP deferred shares
held by the Executive Directors including details of awards granted, options exercised 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 ADRs
awarded under the multi-year incentive plans are included as ordinary shares. Between 31 December 2019 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
Total
SHARES (2)
BIP
LTIP
Total
Year of
grant
2014
2015
2016(1)
2017
Year of
grant
2016(1)
2017
2016(1)
2017
2018
2019
No. of
options
held on
1 Jan
2019
145,604
158,166
114,584
120,886
112,690
119,312
96,996
102,405
970,643
No. of
unvested
shares
held on
1 Jan 2019
94,965
81,781
112,690
119,312
96,996
102,405
179,318
178,482
965,949
No. of
options
granted
during
2019
No. of
shares
awarded
during
2019
309,807
309,807
Option
price on
date of
grant
£9.245
€10.286
£11.520
€15.003
£12.550
€15.285
£14.945
€16.723
Market
price per
share at
award
€15.285
€16.723
£12.550
€15.285
£14.945
€16.723
£14.915
€16.870
£17.698
No. of
options
exercised
during
2019
Market
price per
share at
exercise
No. of
options
held on
31 Dec
2019
145,604
158,166
114,584
120,886
101,421
107,380
96,996
102,405
947,442
Unvested
options
vesting on
Feb 20
Feb 20
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
No. of
shares
vested
during
2019
83,094
Market
price per
share at
vesting
€20.400
No. of
unvested
shares
held on
31 Dec 2019
End of
performance
period
Date of
vesting
81,781
Dec 2019
Feb 2020
77,305
81,848
£17.698
€20.400
96,996
Dec 2019
Feb 2020
102,405
179,318
178,482
309,807
948,789
Dec 2019
Dec 2020
Dec 2020
Dec 2021
Feb 2020
Feb 2021
Feb 2021
Feb 2022
242,247
(1) The performance outcomes for the 2016 ESOS options, BIP and LTIP were disclosed on pages 90 and 91 of the 2018 Remuneration Report.
(2) In addition, Mr Engstrom has 35,860 AIP deferred shares (pre-tax) awarded in 2019 with a market price at award of £17.698. The release of these AIP deferred shares in
February 2022 is not subject to any further performance conditions. Including these AIP deferred shares increases the number of shares awarded during 2019 to 345,667
and the number of unvested shares held on 31 December 2019 to 984,649.
RELX Annual report and financial statements 2019 | Governance 107
Nick Luff
OPTIONS
ESOS
Total
SHARES (2)
BIP
LTIP
Total
Year of
grant
2014
2015
2016(1)
2017
Year of
grant
2016(1)
2017
2016(1)
2017
2018
2019
No. of
options
held on
1 Jan
2019
65,656
72,228
53,979
56,948
53,087
56,207
45,694
48,242
452,041
No. of
unvested
shares
held on
1 Jan 2019
26,543
28,103
22,847
24,121
53,087
56,207
45,694
48,242
87,996
87,585
480,425
No. of
options
granted
during
2019
No. of
shares
awarded
during
2019
152,029
152,029
Option
price on
date of
grant
£9.900
€11.378
£11.520
€15.003
£12.550
€15.285
£14.945
€16.723
Market
price per
share at
award
£12.550
€15.285
£14.945
€16.723
£12.550
€15.285
£14.945
€16.723
£14.915
€16.870
£17.698
No. of
options
exercised
during
2019
Market
price per
share at
exercise
No. of
shares
vested
during
2019
23,225
24,590
Market
price per
share at
vesting
£17.698
€20.400
36,417
38,558
£17.698
€20.400
122,790
No. of
options
held on
31 Dec
2019
65,656
72,228
53,979
56,948
47,778
50,586
45,694
48,242
441,111
No. of
unvested
shares
held on
31 Dec 2019
Unvested
options
vesting on
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
vesting
22,847
24,121
Dec 2019
Dec 2019
Feb 2020
Feb 2020
45,694
48,242
87,996
87,585
152,029
468,514
Dec 2019
Dec 2019
Dec 2020
Dec 2020
Dec 2021
Feb 2020
Feb 2020
Feb 2021
Feb 2021
Feb 2022
(1) The performance outcomes for the 2016 ESOS options, BIP and LTIP were disclosed on pages 90 and 91 of the 2018 Remuneration Report.
(2) In addition, Mr Luff has 21,269 AIP deferred shares (pre-tax) awarded in 2019 with a market price at award of £17.698. The release of these AIP deferred shares in February
2022 is not subject to any further performance conditions. Including these AIP deferred shares increases the number of shares awarded during 2019 to 173,298 and the
number of unvested shares held on 31 December 2019 to 489,783.
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 108
Performance graphs
The graphs below show total shareholder returns for RELX 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’s performance is compared with the FTSE 100. The
three-year chart covers the performance period of the 2017–2019 cycle of the LTIP.
3 years
5 years
10 years
RELX vs FTSE 100 – 3-YEAR TSR
RELX vs FTSE 100 – 5-YEAR TSR
RELX vs FTSE 100 – 10-YEAR TSR
%
175
150
125
100
75
50
25
0
+45%
∆=24%
+21%
%
225
200
175
150
125
100
75
50
25
0
+94%
∆=56%
+38%
%
550
500
450
400
350
300
250
200
150
100
50
0
+422%
∆=318%
+104%
D ec-16
D ec-17
D ec-18
D ec-19
D ec-14
D ec-15
D ec-16
D ec-17
D ec-18
D ec-19
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-18
D ec-19
RELX
FTSE 100
RELX
FTSE 100
RELX
FTSE 100
CEO historical pay table
The table below shows the historical CEO pay over a ten-year period.
£’000
Annualised base salary
Annual incentive payout
as a % of maximum
Multi-year incentive
vesting as a % of maximum
2010
1,000
67%
2011
1,025
66%
2012
1,051
73%
2013
1,077
70%
2014
1,104
71%
2015
1,131
70%
2016
1,160
68%
2017
1,189
69%
2018
1,218
78%
2019
1,249
77%
0%
0%
70%(1)
96%(1)
90%(1)
97%(1)
97%(1)
92%(1)
81%(1)
81%(1)
CEO total
3,140
2,738
11,145(2)
5,463
17,447(3)
11,416(4)
11,399(5)
8,748(6)
9,141(7)
8,681(8)
(1) The 2019, 2018, 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 percentage reflects BIP and the first tranche of the discontinued REGP.
(2) 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.
(3) 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.
(4) The 2015 figure includes £4.4m attributed to share price appreciation.
(5) The 2016 figure includes £4.2m attributed to share price appreciation.
(6) The 2017 figure includes £1.7m attributed to share price appreciation.
(7) The 2018 figure includes £2.2m attributed to share price appreciation. The share award value has been restated for actual share prices and exchange rates applicable on
the dates of vesting (see page 99 for further detail).
(8) The 2019 figure includes £1.5m attributed to share price appreciation.
RELX Annual report and financial statements 2019 | Governance
109
The Committee is satisfied that the overall picture presented
by the 2019 pay ratios is consistent with the pay, reward and
progression policies for the Group’s UK employees.
§§ Salaries for all UK employees, including the Executive
Directors, are set based on a wide range of factors, including
market practice, scope and impact of the role and experience.
§§ The provision of certain benefits and the level of benefit
provided vary depending on the role and level of seniority.
§§ Participation in annual incentive plans varies by business
and reflects the culture and the nature of the business, as well
as role.
§§ Whilst none of the comparator employees participate in the
executive share plans, they do have the opportunity to receive
company shares via the UK Sharesave Option Plan. A greater
proportion of performance-related variable pay and share
based awards applies to more senior executives, including
the Executive Directors, who have a greater influence over
performance outcomes.
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.
Employee costs(1)
Dividends
Share repurchases
2019
£m
2,498
842
600
2018
£m
2,350
796
700
% change
+6.3%
+5.8%
-14.3%
(1) Employee costs include wages and salaries, social security costs, pensions and
share based and related remuneration.
Payments to past Directors and payments for loss of office
(audited)
There have been no payments for loss of office in 2019.
Comparison of change in CEO pay with change in employee pay
The table below shows the percentage change in remuneration
(salary, benefits and annual cash incentive) from 2018 to 2019 for
the CEO compared with the average employee.
% change from 2018 to 2019
Salary
Benefits
Annual cash incentive
CEO
2.5%(2)
1.9%
0.5%
Average
employee(1)
3.0%
3.4%
2.2%
(1) The average employee data has been determined based on a review of employees
representing over 80% of the total employee population. The average salary
increase in the UK, where the CEO is based, was 2.5%.
UK pay ratios
The UK Companies (Miscellaneous Reporting) Regulations 2018
require the disclosure of the ratio of total CEO remuneration to
median (P50), 25th percentile (P25) and 75th percentile (P75) UK
employee total remuneration (calculated on a full-time equivalent
basis). UK employees represent less than 20% of our global
employee population.
Pay ratios for total remuneration are likely to vary, potentially
significantly, over time, since the CEO’s total remuneration each
year is driven largely by his performance-related pay outcomes
and is affected by share price movements. We have therefore also
shown the UK ratios for the salary component.
For the purposes of the ratios below, the CEO’s total remuneration
is his 2019 total single figure and salary as disclosed on page 99.
The P25, P50 and P75 UK employee were selected from the UK
employee population as at 1 October 2019.
Total remuneration
Year
2019
Salary
Year
2019
Pay Ratio
All employee £’000
Method
P25
P50
P75
A 225:1
149:1
100:1
P25
£39
P50
£58
P75
£86
Pay Ratio
All employee £’000
Method
A
P25
35:1
P50
25:1
P75
18:1
P25
£35
P50
£51
P75
£71
Slight differences compared with ratios calculated using data
shown in the tables due to rounding.
The ratios are calculated using Option A, meaning that the
median, 25th percentile and 75th percentile UK employees were
determined based on total remuneration for 2019 using the
single total figure valuation methodology, except for 2019 annual
incentives (other than sales incentives) which are based on
estimated pay-out as individual final payout levels are still to
be finalised and pension was valued based on the cost to the
Company of providing the benefit.
We chose Option A as we believe it is the most robust and accurate
way to identify the median, 25th percentile and 75th percentile
UK employee.
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 110
Implementation of remuneration policy in 2020
Salary: The Committee has awarded a salary increase of 2.5% to
each Executive Director, which means that, from 1 January 2020,
Erik Engstrom’s salary rose to £1,280,085 and Nick Luff’s salary to
£753,801. This is in line with the guidelines for 2020 for the general
UK-based employee population. When the increase in the CEO’s
pension Total Plan Fees is taken into account, his salary after
these deductions will decrease again in 2020 compared to 2019.
Benefits: The benefits provided to the Executive Directors are
unchanged for 2020.
Annual incentive: The operation of the AIP in 2020 will be in
accordance with the terms of the policy set out on pages 84 to 90
of the 2016 Annual Report. The weighting of the different metrics
is amended so that revenue, adjusted net profit after tax and
cash flow will each have a weight of 30% and non-financial KPOs
a weight of 10%. Non-financial measures will be focused on
sustainability metrics thereby increasing their weighting
compared with previous years. Details of the 2020 annual financial
targets and non-financial KPOs will be disclosed in the 2020
Remuneration Report.
Pension: Erik Engstrom’s Total Plan Fees for the legacy defined
benefit pension scheme were 20% of pensionable earnings in
2019, 25% of pensionable earnings in 2020 and will increase
further to 30% in 2021 and to 35% in 2022. Mr Engstrom is also
subject to a 2% cap on annual increases in pensionable earnings.
Subject to receipt of shareholder approval at the 2020 AGM, from
the end of 2022 Mr Engstrom will cease to accrue further benefits
under this scheme and will receive pension benefits of equivalent
value to the level of pension benefits provided under the
Company’s regular defined contribution pension plans as may
be in effect or amended from time to time.
Nick Luff’s cash allowance in lieu of pension reduced from 25%
of salary to 20% of salary from January 2020 and will continue
to reduce each year through 2022, at which time he will receive
pension benefits of equivalent value to the level of pension benefits
provided under the Company’s regular defined contribution
pension plans as may be in effect or amended from time to time.
Share based awards: As in 2019, we will be granting LTIP awards
with face values of 450% of salary to Erik Engstrom and 375%
to Nick Luff in 2020. 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 2020.
The vesting of LTIP awards is dependent on three separate
performance measures: ROIC, EPS and TSR weighted
40%:40%:20% respectively and assessed independently.
The TSR measure comprises three comparators (sterling, euro
and US dollar) reflecting the fact that RELX accesses equity
capital markets through three exchanges – London, Amsterdam
and New York – in three currency zones. RELX’s TSR performance
is measured separately against each comparator group and
each ranking achieved will produce a payout, if any, 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 TSR comparator groups for the 2020–2022
LTIP cycle were selected on the following basis (substantially
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 or single country revenues
(as they do not reflect the global nature of RELX’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).
(c) the remaining companies were then ranked by market
capitalisation and, for each comparator group, up to 50
companies with market capitalisations above and below that
of RELX were taken; and
(d) relevant listed global peers operating in businesses similar
to those of RELX, but not otherwise included, were added.
Vesting percentage of each third
of the TSR tranche(1)
0%
25%
100%
TSR ranking within the relevant
TSR comparator group
Below median
Median
Upper quartile
(1) 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 the footnotes on page 90 and in the 2013 Notices of Annual
General Meetings, which can be found on RELX’s website. The
targets and vesting scales applicable to the EPS and ROIC tranches
of the 2020 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(1)
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
(1) Vesting is on a straight-line basis for performance between the stated average
adjusted EPS growth/ROIC percentages.
RELX Annual report and financial statements 2019 | Governance 111
Remuneration Committee advice
The Committee consists of independent Non-Executive Directors
and the Chair of RELX. Details of members and their attendance
are contained in the Corporate Governance Review on page 78.
The Chief Legal Officer and Company Secretary attends
meetings as secretary to the Committee. At the invitation of the
Chair of the Committee, the CEO attends appropriate parts of
the meetings. The CEO is not in attendance during discussions
about his remuneration.
The Chief Human Resources Officer 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 RELX 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 2019, Willis Towers Watson
received fees of £18,250 for advice given to the Committee,
charged on a time and expense basis.
Shareholder voting at 2019 Annual General Meeting
At the Annual General Meeting of RELX PLC on 25 April 2019, votes cast by proxy and at the meeting in respect of the Directors’
remuneration were as follows:
Resolution
Remuneration Report (advisory)
Votes For
1,356,104,243
% For
93.60%
Votes Against
92,695,095
% Against
Total votes cast
6.40% 1,448,799,338
Votes Withheld
104,649,672
The current Remuneration Policy had been approved at the RELX PLC Annual General Meeting held on 20 April 2017 with 94.95% of votes
cast and approved at the RELX NV Annual General Meeting held on 19 April 2017 with 95.7% of votes cast.
Wolfhart Hauser
Chair, Remuneration Committee
12 February 2020
RELX Annual report and financial statements 2019 | Directors’ Remuneration ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 112
Report of the Audit Committee
This report has been prepared by the Audit Committee of RELX PLC and has been approved by the Board. It provides an overview of the
membership, responsibilities and activities of the Committee.
Membership
Responsibilities
The Committee comprises at least three independent
Non-Executive Directors. The members of the Committee
who served during the year were:
§§ Adrian Hennah (Chair of the Committee)
§§ Marike van Lier Lels (until 6 June 2019)
§§ Carol Mills (until 25 April 2019)
§§ Suzanne Wood
§§ Andrew Sukawaty (from 6 June 2019)
Of the current members of the Committee, Adrian Hennah, a
UK chartered accountant and Suzanne Wood, a US chartered
accountant are considered to have significant, recent and
relevant financial experience.
The Committee as a whole is deemed to have competence
relevant to the sectors in which RELX operates.
Please see pages 64 and 65 for full profiles of Audit
Committee members.
The main role and responsibility of the Committee is to assist
the Board in fulfilling its oversight responsibilities regarding:
§§ the integrity of the 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 Committee reports to the Board on its activities,
identifying any matters in respect of which it considers
that action or improvement is needed and making
recommendations as to the steps to be taken.
The terms of reference of the Audit Committee are reviewed
annually and a copy is published on the RELX website,
www.relx.com
Financial reporting
In discharging its responsibilities in respect of the 2019 interim and full-year financial statements, the Committee reviewed the following:
AREAS OF SIGNIFICANT JUDGEMENT
Specific areas of significant judgement focussed on by the Committee were:
PAGE REFERENCE
IN ANNUAL REPORT
§§ 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 Committee received and discussed reports from the RELX Financial
Controller on the methodology and the basis of the assumptions used;
§§ 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 Committee received reports from the RELX Financial
Controller on the amounts capitalised and asset lives selected for major projects;
151-154
153-154
§§ Uncertain tax positions: Assessing potential liabilities across numerous jurisdictions is complex and requires
judgement in making tax determinations. The Committee received and discussed reports from the RELX Head
of Taxation on the potential liabilities identified and judgements applied;
145
§§ Pensions: The recognition of certain pension scheme liabilities is subject to judgement. The Committee
received and discussed reports from the RELX Financial Controller on the methodology and the basis of the
assumptions used.
140-143
The Committee was satisfied that all judgements had been appropriately made.
RELX Annual report and financial statements 2019 | Governance 113
DISCLOSURE AND PRESENTATION
PAGE REFERENCE
IN ANNUAL REPORT
As well as considering the Annual Report as a whole (see ‘Fair, balanced and understandable’ section below) the
Committee focused on the following areas of disclosure and presentation:
§§ reviewed the critical accounting policies and compliance with applicable accounting standards, reviewed other
disclosure requirements and received regular update reports on accounting and regulatory developments;
133
§§ reviewed the disclosures made in relation to internal control, risk management, the going concern statement
and the viability statement. The Committee 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;
81-84
§§ considered the calculation and presentation of alternative performance measures in the Annual Report and
Accounts and results announcement.
51-57, 184
The Committee was satisfied that all relevant disclosures have been appropriately made.
FAIR, BALANCED AND UNDERSTANDABLE
The Committee considered whether the 2019 Annual Report is fair, balanced and understandable. In making this assessment,
the Committee considered the following areas:
§§ The process for preparing the Annual Report, including the contributors, the internal review process and how feedback is
addressed throughout the process;
§§ The business review narratives presented for each business area;
§§ The discussion of reported and underlying results throughout the report.
The Committee was satisfied that, taken as a whole, the Annual Report is fair, balanced and understandable. This conclusion has been
reported to the Board.
The Committee also received detailed written and verbal reports from the external auditors on these matters. The Committee was satisfied
with the explanations provided and conclusions reached.
Risk management and internal controls
With respect to their oversight of risk management and internal controls, the Committee has:
§§ received and discussed regular reports summarising the status of the Group’s risk management activities, including identification of
emerging risks and actions to mitigate risks, and the findings from internal audits and the status of actions agreed with management.
Areas of focus in 2019 included: cyber security; data privacy (including compliance with existing and proposed data privacy laws such
as the EU General Data Protection Regulation and California Consumer Privacy Act); the operational, financial and IT control
environment; the potential consequences of the United Kingdom’s withdrawal from the European Union under Article 50 of the Treaty
of Lisbon (Brexit); regulatory compliance; business continuity and resilience; post acquisition integration; integrity of published
non-financial data; 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 2020 and monitored execution of the 2019 plan, including progress in respect of
recommendations made;
§§ reviewed the resources, terms of reference and effectiveness of the RELX risk management and internal audit functions;
§§ received presentations from: the RELX Chief Compliance Officer on the compliance programmes, including the operation of the
RELX Code of Conduct, training programmes and whistleblowing arrangements, and the RELX Chief Legal Officer on legal issues
and claims;
§§ 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 RELX businesses.
RELX Annual report and financial statements 2019 | Report of the Audit CommitteeMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 114
Committee Meetings
The Committee met four times during 2019. 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.
External audit effectiveness and independence
The Group has a well-established policy on audit effectiveness
and independence of auditors that sets out amongst other things:
the responsibilities of the 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 Committee. The policy on the provision
of non-audit services has been updated to reflect the Financial
Reporting Council’s Revised Ethical Standard 2019. The policy
is available on the website,
www.relx.com
The Committee has conducted its review of the performance of the
external auditors and the effectiveness of the external audit process
for the year ended 31 December 2019. The review was based on a
survey of key stakeholders across RELX, 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 Committee.
Additionally in 2019, the Committee received and reviewed 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 2018. The findings have been discussed with
the auditors, and EY have made minor adjustments to their audit
plan as a result.
Based on this review, the Audit Committee was satisfied with
the performance of the auditors and the effectiveness of the
audit process.
The external auditors have confirmed their independence and
compliance with the policy on auditor independence to the
Audit Committee.
Non-audit services
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.
The Committee has, each quarter, reviewed and agreed the
non-audit services provided in 2019, 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 due
diligence. The lower level of non-audit fees in 2019 compared to
the prior year reflects a move away from using EY for work such as
due diligence and transaction-related services. The fees remain
below the 70% threshold as per the most recent FRC guidance.
From March 2020, the Revised Ethical Standard will become
effective, and the non-audit services provided will be restricted
to only providing non-audit services where required by laws and
regulations, or where the work is closely linked to the audit work.
Tenure of auditor
Ernst &Young LLP were first appointed auditor of RELX PLC
for the financial year ended 31 December 2016. The auditor
is required to rotate the lead audit partners responsible
for the audit engagements every five years. The year ended
31 December 2019 was the second year for the lead engagement
partner Hywel Ball. The Audit Committee confirms 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 2019.
Audit Committee effectiveness
The effectiveness of the Audit Committee was reviewed as part
of the 2019 evaluation of the Board which confirmed that the
Committee continues to function effectively. Details of the
evaluation are set out on page 81.
Adrian Hennah
Chair of the Audit Committee
12 February 2020
RELX Annual report and financial statements 2019 | Governance RELX Annual report and financial statements 2019
115
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 2019. The Company is incorporated as a public
limited company and is registered in England and Wales with
registered number 77536. Its registered office is 1-3 Strand,
London, WC2N 5JR.
Corporate structure
The Company’s ordinary shares are traded on the London Stock
Exchange and Euronext Amsterdam. It also has in place an
American Depositary Share programme, under which its
securities are traded on the New York Stock Exchange. For
the purposes of this Directors’ Report, and the Corporate
Governance Review from pages 70 to 84, the Company and its
subsidiaries, joint ventures and associates are together known
as ‘RELX’ or ‘the Group’.
Financial statement presentation
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 114. A review of the Group’s performance
during the year is set out on pages 5 to 57, the principal and
emerging risks facing the Group are set out on pages 58 to 61,
and the Group statement on corporate responsibility is set out
on pages 38 to 49.
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,
finance income 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.
Company financial statements
The individual company financial statements of the Company
are presented on page 178, and were prepared under Financial
Reporting Standard 101 (FRS 101). Distributable reserves as at
31 December 2019 were £6,795m (2018: £2,689m), comprising
reserves less shares held in treasury. Shareholders’ funds as at
31 December 2019 were £19,878m (2018: £19,739m).
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 and emerging risks facing the Group, any
important events affecting the Group since 31 December 2019, and
the likely future developments in the Group’s business, is set out
on pages 2 to 61 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 32.1p (2019: 29.7p)
per ordinary share to be paid on 28 May 2020 to shareholders
appearing on the Register of Members at the close of business on
27 April 2020. Payment of this final dividend remains subject to the
approval of the Company’s shareholders at its 2020 Annual
General Meeting (AGM). Together with the interim dividend of
13.6p (2018: 12.4p) per ordinary share, paid in September 2019,
the total ordinary dividends for the year will be 45.7p (2018: 42.1p).
Details of dividend cover and dividend policy are set out on page 56.
Corporate governance
With the exception of provision 19 (length of tenure of the
Chairman) and provision 38 (rates of contribution for Executive
Pensions), the Company has complied throughout the year with
the provisions of the 2018 UK Corporate Governance Code (the
Code), which is publicly available on the Financial Reporting
Council website (www.frc.org.uk). Details of how the main
principles of the Code have been applied and the Directors’
statement on internal control are set out in the Corporate
Governance Review on pages 71 to 84, 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 2019 and the actions being taken to reduce
them are set out in the Corporate Responsibility section of the
Strategic Report on pages 48 and 49, which are incorporated
into this 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 are set out on pages 64, 65, and 78, which are
incorporated into this Directors’ Report by reference.
Share capital
The Company’s issued share capital comprises a single class
of ordinary shares, all of which are listed on the London and
Amsterdam stock exchanges. It also has securities, in the form
of American Depositary Shares, traded on the New York Stock
Exchange. 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.
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
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 116
result in restrictions on the transfer of shares or on voting rights
attached to the shares. At the 2019 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 £14.1m,
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 2019 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 described below.
During the year, 3,059,588 ordinary shares in the Company were
issued in order to satisfy entitlements under employee share
plans as follows: 614,653 under a UK Sharesave option scheme at
prices between 596.00p and 1,316.80p per share; 440,537 under
the Dutch Debenture Scheme at prices between EUR 5.34 and
EUR 19.165, which is now satisfied by way of Company shares;
and 2,004,398 under executive share option schemes at prices
between 466.50p and 1,769.75p per share. The issued share capital
as at 31 December 2019 is shown in note 24 to the consolidated
financial statements.
Authority to purchase shares
At the 2019 AGM, shareholders passed a resolution authorising
the purchase of up to 201m ordinary shares in the Company
(representing less than 10% of the issued ordinary shares) by
market purchase. During the year, 33,544,007 ordinary shares
with a nominal value of 14 51/116p (representing 1.69% of the
ordinary shares in issue on 31 December 2019) were purchased
under this and the previous authority, for a total consideration of
£600m, 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 6 December 2019, the Company cancelled 33.3m ordinary
shares held in treasury. Therefore, as at 31 December 2019 there
were 42,267,027 ordinary shares held in treasury, representing
2.1% of the issued ordinary shares. A further 4,993,953 ordinary
shares were purchased between 2 January 2020 and the date of
this report. The authority to make market purchases will expire at
the 2020 AGM, at which a resolution to further extend the authority
will be submitted to shareholders.
Substantial share interests
As at 31 December 2019, 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 2019
§§ BlackRock, Inc
§§ Invesco Limited
% of voting rights
7.84%
4.99%
The percentage interests stated above are as disclosed at the date
on which the interests were notified to the Company and, as at
12 February 2020, the Company had not received any further
notifications under DTR 5.
Employee Benefit Trust
The trustee of the Employee Benefit Trust held an interest in
6,753,010 ordinary shares in the Company (representing 0.3% of
the issued ordinary shares) as at 31 December 2019. The trustee
may vote or abstain from voting any shares it holds in any way it
sees fit.
Significant agreements – change of control
There are a number of borrowing agreements including credit
facilities that, in the event of a change of control of 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. There are no
arrangements between the Company and its Directors or
employees providing for compensation for loss of office or
employment that occurs specifically because of a takeover,
merger or amalgamation with the exception of provisions in the
Company’s share plans which could result in options or awards
vesting or becoming exercisable on a change of control.
Articles
The Company’s Articles of Association (the ‘Articles’), which were
amended once during the year at the Company’s 2019 Annual
General Meeting, may only be amended by a special resolution
of shareholders passed at a general meeting of the Company.
Appointment and replacement of Directors
The appointment, re-appointment and replacement of Directors
is governed by the Articles, the Companies Act 2006 and related
legislation. Shareholders maintain their right to appoint and
re-appoint Directors by way of an ordinary resolution in
accordance with the Articles. 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 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 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 its
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 2019
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.
RELX Annual report and financial statements 2019 | Governance No contract existed during the year in relation to the Company’s
business in which any Director was materially interested.
(8) Non pro-rata allotments for cash (major subsidiaries)
(9) Parent participation in a placing by a listed subsidiary
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 18 to the consolidated financial statements on pages 157
to 162.
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 £60,351 (2018: £58,763) to political
organisations. In line with US law, these donations were not made
at federal level, but only to candidates and political parties at 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 2018.
Certain employees throughout the Group are eligible to
participate in the Group’s share incentive plans.
117
Disabled persons
RELX has a positive approach to inclusion and diversity. Details of
the Group’s Inclusion and Diversity Policy are set out on page 87,
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
Page
(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)
(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
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.
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.
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
150
150
n/a
RELX Annual report and financial statements 2019 | Directors’ ReportMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 118
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 64 and 65, 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
§§ 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 and emerging risks
and uncertainties that it faces.
Having taken into account all of 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 Financial
Statements, 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 of this 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
83, which is incorporated into this Directors’ Report by reference.
Viability statement
The Directors’ statement regarding the long-term viability of the
Group is set out on page 84, 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 2020 AGM.
Annual General Meeting
The 2020 Annual General Meeting will be held at 10.00am on
23 April 2020 at the Amba Hotel, Strand, London, WC2N 5HX.
By order of the Board
Henry Udow
Company Secretary
12 February 2020
Registered Office
1-3 Strand
London
WC2N 5JR
RELX Annual report and financial statements 2019 | Governance RELX Annual report and financial statements 2019
119
Financial statements
and other information
In this section
120 Independent auditor’s report
128 Consolidated financial statements
133 Notes to the consolidated
financial statements
175 5 year summary
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RELX Annual report and financial statements 2019 | Financial statements and other information
Independent auditor’s report to
the members of RELX PLC
OPINION
In our opinion:
§§ RELX PLC and its subsidiaries, joint ventures and associates (“RELX”)’s group financial statements and parent company financial
statements (the “financial statements”) give a true and fair view of the state of the group’s and of the parent company’s affairs as at
31 December 2019 and of the group’s profit for the year then ended;
§§ the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
§§ the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
§§ the financial statements 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.
We have audited the financial statements of RELX PLC which comprise:
Group
Parent company
Consolidated income statement for the year then ended
Statement of financial position as at 31 December 2019
Consolidated statement of comprehensive income for the
year then ended
Consolidated statement of cash flows for the year then ended
Statement of changes in equity for the year then ended
Related notes 1 to 4 to the financial statements including a summary
of significant accounting policies
Consolidated statement of financial position as at 31 December 2019
Consolidated statement of changes in equity for the year then ended
Related notes 1 to 29 to the financial statements, including a
summary of significant accounting policies
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 parent company financial statements is applicable law and United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
BASIS FOR OPINION
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 of our
report below. We are independent of the group and parent company 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.
CONCLUSIONS RELATING TO PRINCIPAL RISKS, GOING CONCERN AND VIABILITY STATEMENT
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 58 to 61 that describe the principal risks and explain how they are being
managed or mitigated;
§§ the directors’ confirmation set out on page 58 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 83 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 84 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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121
OVERVIEW OF OUR AUDIT APPROACH
Key audit matters
Audit scope
Materiality
§§ Uncertain tax positions
§§ Internally developed intangible assets
§§ Revenue recognition
§§ Finance systems
§§ We performed an audit of the complete financial information of six components and audit
procedures on specific balances for a further six components. We also instructed one location
to perform specified procedures.
§§ The components where we performed full or specific audit procedures accounted for 84% of
absolute profit before tax, 82% of revenue and 78% of total assets.
§§ Overall materiality of £90m which represents 5% of profit before tax.
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.
KEY OBSERVATIONS
COMMUNICATED
TO THE AUDIT COMMITTEE
We reported our conclusions
to the Audit Committee that
we challenged the robustness
of the key management
judgements. We confirmed
that we were satisfied that
management’s judgements
in relation to the extent of
provisions for uncertain tax
positions are appropriate.
We noted further that there
continues to be a high degree
of uncertainty about the
eventual outcome of many of
these provisions.
RISK
OUR RESPONSE TO THE RISK
Uncertain tax positions
As described in note 9 to the consolidated financial
statements and in the audit committee report
(page 112), the Group is subject to tax in numerous
jurisdictions. Its 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. Transfer pricing
relies on the exercise of judgement and it is
reasonably possible for there to be a significant
range of potential outcomes.
The Group is subject to tax authority audits in
multiple jurisdictions at any point in time 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
assumptions and judgement, as described in
note 9.
We focused on this area due to the subjectivity
in the quantification of the provision and the
judgement around the trigger for recognition or
release impacting the provision and the effective
tax rate.
Our procedures included obtaining an understanding
of the tax provisioning processes and evaluating their
design, as well as testing internal controls over the tax
provisioning process. For example, we tested controls
over management’s review of the uncertain tax position
provisions recorded, including the controls over the
development of significant assumptions and judgments.
Our procedures on the uncertain tax positions were
performed centrally by the group team supported
by overseas teams including professionals with
specialised skills. Procedures included, among others
(i) meeting with members of management responsible
for tax to understand the Group cross-border
transactions, status of significant provisions, and any
changes to management’s judgements in the year;
(ii) reading correspondence with tax authorities and
external advisors to inform our assessment of
recorded estimates and evaluate the completeness of
the provisions recorded; (iii) independently assessing
management’s significant assumptions and
judgements to record or release provisions following
tax audits, settlements and the expiry of timeframes
with reference to other similar tax positions the
Group has historically held and our knowledge of
developments in the jurisdictions in which RELX
maintain tax provisions; (iv) testing the underlying
schedules for arithmetic accuracy, as well as with
reference to applicable tax laws; and (v) evaluating
the adequacy of tax disclosures.
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RELX Annual report and financial statements 2019 | Financial statements and other information
KEY OBSERVATIONS
COMMUNICATED
TO THE AUDIT COMMITTEE
Based on the procedures
performed, we did not identify
any evidence of material
misstatement in the
capitalisation of internally
developed intangible assets.
Based on the procedures
performed, we did not
identify evidence of material
misstatement in the revenue
recognised in the year.
Based on the procedures
performed, we have not
identified any misstatements
in the financial statements
due to any limitations of the
IT systems. Our understanding
and testing of IT systems
and controls supported our
audit approach.
RISK
OUR RESPONSE TO THE RISK
Internally developed intangible assets
The Group capitalised internally developed
intangible assets of £333 million in the current year
(2018: £304 million) and has a year end net book
value of £1,264 million (2018: £1,217 million). As
described in note 15 to the consolidated financial
statements and in the audit committee report
(page 112), the capitalisation of costs related to
the development of new products and business
infrastructure, together with the economic useful
lives applied to the resulting assets, requires the
exercise of significant judgement.
We performed full and specific scope audit procedures
over internally developed intangible assets in 4
locations, which covered 71% of the account balance.
Procedures included obtaining an understanding of
the processes which support the expenditure and
subsequent capitalisation of internally developed
intangible assets and evaluating their design, as well
as testing controls for the capitalisation of internally
generated intangible assets. For example, we tested
controls over management’s review and approval of
new capital projects and the capitalisation criteria for
costs incurred for the projects.
We focused on this area as it is inherently
judgemental with respect to technical feasibility,
intention and ability to complete the intangible
asset, ability to use or sell the asset, ability to
generate future economic benefits and ability
to measure the costs reliably. As a result these
expenditures may be inappropriately capitalised,
amortised or valued.
Revenue recognition
As described in note 2 to the consolidated financial
statements, the group earns revenue (£7.9bn
recorded in 2019, compared to £7.5bn recorded in
2018) 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 each of
the business areas related to the opportunity to
commit fraud in the respective revenue streams
through manual adjustments or override of
controls by management.
Finance systems
The group has many IT systems that are vital to
the ongoing operations and to the integrity of the
financial reporting process. Owing to the global
nature of the group and its operations, the
applications, associated infrastructure and IT
processes that 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 some of
whom reside in different countries from the
physical location of the IT infrastructure or the
location of the RELX business users. Additionally,
due to the rapidly changing IT landscape, the group
undergoes numerous IT system migrations.
Understanding the IT environment including
interfaces between them was an area of audit
focus to assess if transactions were being
processed accurately.
Additionally, procedures included, among others (i)
assessing the accounting policy and methodology
for capitalisation of expenditures; (ii) evaluating 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, which was done by assessing if
capitalised costs related to an authorised capital
project and met the criteria to be capitalised; and (iii)
assessing the useful lives adopted based on related
business cases and historical experience.
We performed full and specific scope audit procedures
over revenue in 12 locations, which covered 82% of
revenue. We performed procedures to address the
specific risk in each business area. Procedures
included, among others, (i) assessing the processes
and testing controls over each significant revenue
stream; (ii) evaluating the appropriateness of journal
entries impacting revenue, as well as other
adjustments made in the preparation of the financial
statements; (iii) evaluating management’s controls
over such adjustments; (iv) inspecting a sample of
contracts to check that revenue recognition was in
accordance with the contract terms and the group’s
revenue recognition policies; (v) testing a sample of
transactions around period end to test that revenue
was recorded in the correct period; and (vi) for revenue
streams that have judgemental elements, evaluating
management’s assumptions.
We utilised professionals with specialised skills to
support our evaluation of the design and operation of
IT controls to address the group’s control objectives
and financial reporting risks. Procedures included,
among others, (i) holding enquiries of management to
understand the IT environment and walking through
the financial processes end-to-end in order to
understand where IT systems were integral to the
group accounting processes; (ii) performing data
analytic procedures in certain locations and business
areas to understand the flow of transactions and
perform specific test procedures; (iii) testing the IT
general controls environment for the key applications;
(iv) where appropriate, receiving reports from the
service auditors of the outsourced systems and
evaluating the adequacy of the work performed and
following up on matters arising, performing further
procedures as necessary; (v) testing system migrations,
including testing of controls surrounding the migration;
and (vi) where required, testing compensating controls
or performing alternative procedures to complement
the controls based audit approach.
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123
In the prior year, our auditor’s report included key audit matters in relation to carrying value of goodwill and acquired intangible assets,
acquisition accounting for significant new business combinations and corporate simplification. In the current year, these matters were
no longer identified as key audit matters as they related to either i) one-time occurrences in 2018 and are no longer significant in 2019,
or ii) matters that are no longer deemed to have the greatest effect on overall audit strategy, the allocation of resources in the audit or
directing the efforts of the engagement team.
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, we selected twelve components covering entities within the United Kingdom, the
Netherlands, the United States, France, Switzerland, and Japan, which represent the principal business units within the group.
Of the twelve 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 six 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.
We also instructed one location to perform specified procedures over manual journal entries to revenue.
The reporting components where we performed audit procedures accounted for 84% (2018: 81%) of the group’s profit before tax on an
absolute basis1, 82% (2018: 80%) of the group’s revenue and 78% (2018: 75%) of the group’s total assets. For the current year, the full
scope components contributed 60% (2018: 57%) of the group’s profit before tax on an absolute basis, 72% (2018: 70%) of the group’s
revenue and 72% (2018: 67%) of the group’s total assets. The specific scope components contributed 24% (2018 23%) of the group’s profit
before tax on an absolute basis, 10% (2018: 10%) of the group’s revenue and 6% (2018: 8%) 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 16% of the group’s profit before tax on an absolute basis, none are individually
greater than 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
16%
24%
60%
18%
10%
22%
6%
72%
72%
Full scope
Specific scope
Other procedures
(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 Annual report and financial statements 2019 | Financial statements and other information
Changes from the prior year
Changes from the prior year include instructing one location to perform specified procedures around revenue manual journal entries
in the current year. In the prior year, we performed procedures around the accounting for significant acquisitions made in the prior year,
which are no longer applicable in the current year in those locations.
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 primary audit
team. For the six 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
Auditor, 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 primary audit team to the component teams in the United Kingdom, the Netherlands,
the United States, France and Japan. 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.
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 £90 million (2018: £90 million), which is 5% (2018: 5%) of profit before tax. We believe that
profit before tax provides us with the best assessment of the requirements of the users of the financial statements.
We determined materiality for the Parent Company to be £90 million (2018: £90 million), which is 0.5% (2018: 0.5%) of equity.
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% (2018: 75%) of our planning materiality, namely £68 million (2018: £67.5m). 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 £8.5 million to £53.5 million (2018: £19.4 million
to £48.4 million).
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 £4.5 million (2018:
£4.5 million), which is set at 5% of planning 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.
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125
OTHER INFORMATION
The other information comprises the information included in the annual report set out on pages 2 to 118, 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 83 – 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 page 112 – 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 70 – 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.
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.
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RELX Annual report and financial statements 2019 | Financial statements and other information
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 117, 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 PLC is complying with those frameworks by 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.
§§ 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, business
area 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 the Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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127
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 and subsequent
financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments is four years, covering the years
ending 2016 to 2019.
§§ 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.
USE OF OUR REPORT
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.
Hywel Ball (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London 12 February 2020
Notes:
(1) The maintenance and integrity of the RELX PLC 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.
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128
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 shareholders
Non-controlling interests
Net profit for the year
Earnings per share
FOR THE YEAR ENDED 31 DECEMBER
Basic earnings per share
RELX PLC
Diluted earnings per share
RELX PLC
Note
2
3
7
7
8
9
2019
£m
7,874
(2,755)
5,119
(1,292)
(1,767)
41
2,101
9
(314)
(305)
51
1,847
(382)
44
(338)
1,509
2018
£m
7,492
(2,644)
4,848
(1,191)
(1,725)
32
1,964
6
(217)
(211)
(33)
1,720
(297)
5
(292)
1,428
2017
£m
7,341
(2,628)
4,713
(1,163)
(1,682)
37
1,905
6
(205)
(199)
15
1,721
(439)
374
(65)
1,656
1,505
4
1,509
1,422
6
1,428
1,648
8
1,656
2019
2018
2017
10
77.4p
71.9p
81.6p
10
76.9p
71.4p
81.0p
RELX Annual report and financial statements 2019 | Financial statements and other information Consolidated statement of comprehensive income
129
FOR THE YEAR ENDED 31 DECEMBER
Net profit for the year
Items that will not be reclassified to profit or loss:
Actuarial (losses)/gains 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 shareholders
Non-controlling interests
Total comprehensive income for the year
Note
2019
£m
1,509
2018
£m
1,428
2017
£m
1,656
6
9
18
18
9
(137)
23
(114)
(82)
16
35
(8)
(39)
(153)
1,356
1,352
4
1,356
(91)
15
(76)
207
(59)
17
9
174
98
1,526
1,520
6
1,526
233
(59)
174
(507)
137
25
(30)
(375)
(201)
1,455
1,447
8
1,455
RELX Annual report and financial statements 2019Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 130
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER
Cash flows from operating activities
Cash generated from operations
Interest paid (including lease interest)
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
Distributions to non-controlling interests
Increase/(decrease) in short-term bank loans, overdrafts and commercial paper
Issuance of term debt
Repayment of term debt
Repayment of leases
Receipts in respect of subleases
Disposal of non-controlling interest
Repurchase of ordinary shares
Purchase of shares by Employee Benefit Trust
Proceeds on issue of ordinary shares
Net cash used in financing activities
Note
11
11
13
11
11
11
11
11
24
24
2019
£m
2018
£m
2017
£m
2,724
(175)
4
(464)
2,089
(423)
(47)
(333)
(8)
2
82
(40)
34
(733)
(842)
(9)
98
729
(617)
(102)
16
6
(600)
(37)
29
(1,329)
2,555
(179)
24
(415)
1,985
(935)
(56)
(306)
(13)
4
34
(29)
30
(1,271)
(796)
(8)
147
958
(211)
(95)
14
–
(700)
(43)
21
(713)
2,526
(169)
6
(449)
1,914
(131)
(51)
(303)
(10)
1
84
(43)
38
(415)
(762)
(10)
(148)
873
(712)
(89)
11
–
(700)
(39)
32
(1,544)
Increase/(decrease) in cash and cash equivalents
11
27
1
(45)
Movement in cash and cash equivalents
At start of year
Increase/(decrease) in cash and cash equivalents
Exchange translation differences
At end of year
114
27
(3)
138
111
1
2
114
162
(45)
(6)
111
RELX Annual report and financial statements 2019 | Financial statements and other information
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
Right-of-use assets
Other receivables
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
Other payables
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
131
Note
2019
£m
2018
£m
14
15
16
16
17
23
9
6
18
19
20
18
11
21
18
22
18
22
9
6
24
24
24
25
6,824
3,452
118
133
180
264
31
239
45
58
11,344
217
2,067
23
138
2,445
–
13,789
3,479
24
2,060
372
12
5,947
10
4,354
593
565
108
22
5,652
–
11,599
2,190
6,899
3,534
104
151
198
263
–
455
6
37
11,647
212
2,015
10
114
2,351
1
13,999
3,432
32
1,392
450
15
5,321
37
4,973
830
439
–
36
6,315
4
11,640
2,359
286
1,443
(834)
292
979
2,166
24
2,190
290
1,415
(734)
374
984
2,329
30
2,359
The consolidated financial statements were approved by the Board of Directors and authorised for issue on 12 February 2020.
They were signed on its behalf by:
A J Habgood
Chair
N L Luff
Chief Financial Officer
RELX Annual report and financial statements 2019Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview
132
Consolidated statement of changes in equity
Note
13
24
13
24
24
13
24
24
24
24
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
Balance at 1 January 2018
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
Exchange differences on
translation of capital
and reserves
Balance at 1 January 2019
Total comprehensive income
for the year
Dividends paid
Issue of ordinary shares,
net of expenses
Repurchase of ordinary shares
Bonus issue of ordinary share
Cancellation of bonus share
Cancellation of shares
Increase in share based
remuneration reserve
(net of tax)
Settlement of share awards
Acquisitions
Put option
Disposal of non-controlling
interest
Exchange differences on
translation of capital
and reserves
Balance at 31 December 2019
Share
capital
£m
226
Share
premium
£m
3,003
Shares held
in treasury
£m
(1,471)
Translation
reserve
£m
727
Other
reserves
£m
(215)
Shareholders’
equity
£m
2,270
Non-
controlling
interests
£m
38
(507)
–
1,954
(762)
–
–
–
–
(4)
–
–
–
–
2
224
–
–
134
–
(68)
–
–
–
–
290
–
–
1
–
4,000
(4,000)
(5)
–
–
–
–
–
–
–
32
–
–
–
–
–
–
–
–
–
(737)
570
–
37
–
–
69
3,104
(30)
(1,631)
–
–
–
–
114
–
(1,795)
–
(743)
1,601
–
–
–
–
35
–
(8)
1,415
4
(734)
–
–
28
–
–
–
–
–
–
–
–
–
–
–
–
(637)
–
–
504
–
33
–
–
–
1,447
(762)
32
(737)
–
42
–
–
–
–
2,292
1,520
(796)
21
(743)
–
35
–
–
–
2,329
1,352
(842)
29
(637)
–
–
–
33
–
–
(103)
–
–
(566)
42
(37)
–
–
9
425
1,313
(796)
(227)
–
262
35
(35)
–
7
984
1,434
(842)
–
–
(4,000)
4,000
(499)
33
(33)
–
(103)
–
–
–
–
–
–
–
(50)
170
207
–
–
–
–
–
–
–
(3)
374
(82)
–
–
–
–
–
–
–
–
–
–
–
Total
equity
£m
2,308
1,455
(772)
32
(737)
–
42
–
1
(15)
(1)
2,313
1,526
(804)
21
(743)
–
35
–
11
–
2,359
1,356
(851)
29
(637)
–
–
–
33
–
(1)
(103)
6
8
(10)
–
–
–
–
1
(15)
(1)
21
6
(8)
–
–
–
–
–
11
–
30
4
(9)
–
–
–
–
–
–
–
(1)
–
1
5
5
–
286
–
1,443
–
(834)
–
292
–
979
–
2,166
(1)
24
(1)
2,190
RELX Annual report and financial statements 2019 | Financial statements and other information RELX Annual report and financial statements 2019
133
Notes to the consolidated financial statements
for the year ended 31 December 2019
1 Basis of preparation and accounting policies
Basis of preparation
The shares of RELX PLC are traded on the London, Amsterdam and New York stock exchanges. RELX PLC and its subsidiaries, joint
ventures and associates are together known as ‘RELX’.
In preparing the consolidated financial statements, subsidiaries 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.
The Directors of RELX 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
consolidated financial statements for the year ended 31 December 2019.
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 2018.
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 157 to 162.
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 157.
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 14 and 15;
§§ capitalisation of development spend – note 15;
§§ taxation – note 9; and
§§ accounting for defined benefit pension schemes – note 6.
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 134
Notes to the consolidated financial statements
for the year ended 31 December 2019
1 Basis of preparation and accounting policies (continued)
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.
The application of this policy is straightforward, and is included in note 2.
Standards and amendments effective for the year
RELX adopted IFRS 16 Leases for the year ended 31 December 2018, a year earlier than its mandatory effective date. The impact of the
adoption of IFRS 16 was reflected in the consolidated financial statements for the year ended 31 December 2018. Other interpretations
and amendments to IFRS effective for 2019 have not had a significant impact on the Group’s accounting policies or reporting.
Standards, amendments and interpretations not yet effective
A number of amendments and interpretations have been issued which are not expected to have any significant impact on the accounting
policies and reporting.
2 Revenue and segment analysis
Accounting policy
The Group’s reported segments are based on the internal reporting structure and financial information provided to the Board.
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 137.
Revenue arises from the provision of products and services under contracts with customers. In all cases, revenue is recognised
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services, and is recognised when the customer obtains control of the good
or service.
Revenue is stated at the transaction price, which includes allowance for anticipated discounts and returns and excludes customer
sales taxes and other amounts to be collected on behalf of third-parties.
Where the goods or services promised within a contract are distinct, they are identified as separate performance obligations and are
accounted for separately.
Where separate performance obligations are identified, total revenue is allocated on the basis of relative stand-alone selling prices
or management’s best estimate of relative value where stand-alone selling prices do not exist. Management estimates may include
a cost-plus method or comparable product approach, but must be supported by objective evidence. A residual approach may be
applied where it is not possible to derive a reliable management estimate for a specific component.
Revenue is recognised for the various categories as follows:
§§ Subscriptions – revenue comprises income derived from the periodic distribution or update of a product. Subscription revenue
is generally invoiced in advance and recognised systematically over the period of the subscription. Recognition is either on a
straight-line basis where the transaction involves the transfer of goods and services to the customer in a consistent manner
over a specific period of time; or based on the value received by the customer where the goods and services are not delivered in
a consistent manner.
§§ Transactional – revenue is recognised when control of the product is passed to the customer or the service has been performed.
For exhibitions, revenue primarily comprises income from exhibitors and attendees at exhibitions. Exhibition revenue is
recognised on occurrence of the exhibition.
§§ Advertising – revenue is recognised on publication or over the period of online display.
RELX Annual report and financial statements 2019 | Financial statements and other information 135
2 Revenue and segment analysis (continued)
RELX is a global provider of information-based analytics and decision tools for professional and business customers. Operating in four
major market segments: Scientific, Technical & Medical provides information and analytics that help institutions and professionals
progress science, advance healthcare and improve performance; Risk & Business Analytics provides customers with information-
based analytics and decision tools that combine public and industry-specific content with advanced technology and algorithms to assist
them in evaluating and predicting risk and enhancing operational efficiency; Legal provides legal, regulatory and business information
and analytics that helps customers increase their productivity, improve decision-making and achieve better outcomes; and Exhibitions
is a leading global events business. It combines face-to-face with data and digital tools to help customers learn about markets, source
products and complete transactions.
ANALYSIS BY BUSINESS SEGMENT
Revenue
Adjusted operating profit
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
Sub-total
Unallocated items
Total
2019
£m
2,637
2,316
1,652
1,269
7,874
–
7,874
2018
£m
2,538
2,117
1,618
1,219
7,492
–
7,492
2017
£m
2,473
2,073
1,686
1,109
7,341
–
7,341
2019
£m
982
853
330
331
2,496
(5)
2,491
2018
£m
942
776
320
313
2,351
(5)
2,346
2019
Scientific, Technical &
Medical
Risk & Business
Analytics
Legal
Exhibitions
Revenue by geographical market
North America
Europe*
Rest of world
Total revenue
Revenue by format
Electronic
Face-to-face
Print
Total revenue
Revenue by type
Subscriptions
Transactional
Advertising
Total revenue
1,182
635
820
2,637
2,214
8
415
2,637
1,970
622
45
2,637
1,843
317
156
2,316
2,264
25
27
2,316
872
1,428
16
2,316
1,118
340
194
1,652
1,400
9
243
1,652
1,287
359
6
1,652
248
508
513
1,269
51
1,218
–
1,269
–
1,269
–
1,269
* Europe includes revenue of £529m from the United Kingdom (2018: £527m; 2017: £521m).
2017
£m
914
760
328
287
2,289
(5)
2,284
Total
4,391
1,800
1,683
7,874
5,929
1,260
685
7,874
4,129
3,678
67
7,874
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 136
Notes to the consolidated financial statements
for the year ended 31 December 2019
2 Revenue and segment analysis (continued)
2018
Scientific, Technical &
Medical
Risk & Business
Analytics
Legal
Exhibitions
Revenue by geographical market
North America
Europe
Rest of world
Total revenue
Revenue by format
Electronic
Face-to-face
Print
Total revenue
Revenue by type
Subscriptions
Transactional
Advertising
Total revenue
2017
Revenue by geographical market
North America
Europe
Rest of world
Total revenue
Revenue by format
Electronic
Face-to-face
Print
Total revenue
Revenue by type
Subscriptions
Transactional
Advertising
Total revenue
1,118
611
809
2,538
2,094
7
437
2,538
1,877
615
46
2,538
1,669
322
126
2,117
2,030
36
51
2,117
765
1,322
30
2,117
1,083
340
195
1,618
1,338
10
270
1,618
1,247
365
6
1,618
221
535
463
1,219
51
1,168
–
1,219
–
1,219
–
1,219
Total
4,091
1,808
1,593
7,492
5,513
1,221
758
7,492
3,889
3,521
82
7,492
Scientific, Technical &
Medical
Risk & Business
Analytics
Legal
Exhibitions
Total
1,045
617
811
2,473
1,995
10
468
2,473
1,776
646
51
2,473
1,658
308
107
2,073
1,967
38
68
2,073
732
1,301
40
2,073
1,145
340
201
1,686
1,384
7
295
1,686
1,291
389
6
1,686
230
429
450
1,109
42
1,067
–
1,109
1
1,108
–
1,109
4,078
1,694
1,569
7,341
5,388
1,122
831
7,341
3,800
3,444
97
7,341
Around half of RELX’s revenue comes from subscription arrangements, and revenue for these is generally recognised on a straight-line
basis over the time period covered by the agreement, in line with the provision of services. There are a number of multi-year contracts,
mainly in Risk & Business Analytics, where revenue is recognised on the achievement of delivery milestones or other specified
performance obligations. As at 31 December 2019, the aggregate amount of the transaction price of such contracts which relates to
performance obligations which have not yet been delivered was approximately £162m (2018: £210m). It is expected that revenue will be
recognised in relation to this amount over the next nine years.
ANALYSIS OF REVENUE BY GEOGRAPHICAL ORIGIN
North America
Europe
Rest of world
Total
2019
£m
4,308
2,832
734
7,874
2018
£m
4,013
2,790
689
7,492
2017
£m
3,998
2,644
699
7,341
Revenue by geographical origin from the United Kingdom in 2019 was £1,320m (2018: £1,144m; 2017: £1,085m).
RELX Annual report and financial statements 2019 | Financial statements and other information 137
2 Revenue and segment analysis (continued)
ANALYSIS BY BUSINESS SEGMENT
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
Total
Expenditure on
acquired goodwill and
intangible assets
2018
2019
£m
£m
106
65
852
47
30
139
61
251
502 1,049
2017
£m
94
–
6
33
133
Capital expenditure
additions
Amortisation of acquired
intangible assets
Depreciation and other
amortisation
2019
£m
104
96
155
26
381
2018
£m
100
92
145
28
365
2017
£m
95
83
153
24
355
2019
£m
62
170
24
39
295
2018
£m
58
161
33
36
288
2017
£m
77
141
52
44
314
2019
£m
109
89
150
41
389
2018
£m
109
73
147
35
364
2017
£m
100
64
142
37
343
Capital expenditure comprises additions to property, plant and equipment and internally developed intangible assets. Depreciation
and other amortisation includes depreciation on right-of-use assets. Amortisation of acquired intangible assets includes amounts in
respect of joint ventures of £1m (2018: £1m; 2017: £1m) in Exhibitions.
ANALYSIS OF NON-CURRENT ASSETS BY GEOGRAPHICAL LOCATION
North America
Europe
Rest of world
Total
2019
£m
8,365
2,156
481
11,002
2018
£m
8,692
1,996
461
11,149
2017
£m
7,408
2,016
459
9,883
Non-current assets held in the United Kingdom totalled £1,248m (2018: £988m; 2017: £1,026m). 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
2019
£m
2,101
295
84
12
(1)
2,491
2018
£m
1,964
288
84
11
(1)
2,346
2017
£m
1,905
314
56
10
(1)
2,284
The share of post-tax results of joint ventures of £41m (2018: £32m; 2017: £37m) included in operating profit comprised £3m
(2018: nil; 2017: £5m) relating to Legal, £36m (2018: £31m; 2017: £32m) relating to Exhibitions and £2m (2018: £1m; 2017: nil) relating to
Risk & Business Analytics.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 138
Notes to the consolidated financial statements
for the year ended 31 December 2019
3 Operating profit
Accounting policy
Share based remuneration
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.
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
Depreciation of right-of-use assets
Total depreciation and amortisation
Other expenses and income
Cost of sales including pre-publication costs and inventory expenses
Short-term and low value lease expenses
Operating lease rentals income
Note
6
15
15
17
2019
£m
2,116
230
120
32
2,498
294
1
249
58
82
684
2018
£m
1,959
215
135
41
2,350
287
1
225
62
77
652
2017
£m
1,926
213
95
39
2,273
313
1
203
65
75
657
2,755
20
(1)
2,638
18
(3)
2,628
28
(3)
The amortisation of acquired intangible assets is included within administration and other expenses.
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. Further details are provided in the remuneration report on pages 88 to 111.
RELX Annual report and financial statements 2019 | Financial statements and other information 4 Auditor’s remuneration
Auditor’s remuneration
Payable to the auditors of RELX PLC
Payable to the auditors of the Group’s subsidiaries
Audit services
Audit-related assurance services
Total audit and audit-related assurance services
Other services: Due diligence and other transaction-related services
Total non-audit related services
Total auditor’s remuneration
139
2017
£m
0.9
5.9
6.8
0.8
7.6
0.3
0.3
7.9
2019
£m
0.8
7.4
8.2
0.6
8.8
0.1
0.1
8.9
2018
£m
0.9
6.5
7.4
0.9
8.3
2.7
2.7
11.0
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. Included in audit-related assurance services for 2019 are £0.1m in fees for services relating
to RELX pension plans (2018: £0.1m). The amounts payable in 2017 to the auditors of RELX PLC also reflect amounts payable to the auditors
of RELX NV. The previously reported 2018 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 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
Europe
Rest of world
Total
2019
2018
2017
2019
2018
2017
8,100
9,100
10,600
4,600
32,400
800
33,200
14,100
9,500
9,600
33,200
7,900
8,700
10,500
4,200
31,300
800
32,100
13,800
9,200
9,100
32,100
7,500
8,100
10,600
4,000
30,200
800
31,000
13,500
9,100
8,400
31,000
8,000
9,000
10,600
4,400
32,000
800
32,800
14,000
9,400
9,400
32,800
7,700
8,600
10,600
4,100
31,000
800
31,800
13,700
9,200
8,900
31,800
7,500
8,200
10,700
4,000
30,400
800
31,200
13,600
9,200
8,400
31,200
The number of UK full-time equivalents as at 31 December 2019 was 5,400 (2018: 5,200; 2017: 5,000) and the average during the year was
5,300 (2018: 5,100; 2017: 5,000).
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 140
Notes to the consolidated financial statements
for the year ended 31 December 2019
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 2019, 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 the more significant 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 2019 were in the
UK and the US, and are summarised below.
Major defined benefit schemes in place at 31 December 2019
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 was 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.
RELX Annual report and financial statements 2019 | Financial statements and other information 141
6 Pension schemes (continued)
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. As a result of
the 2018 triennial valuation, the Group’s remaining deficit funding contributions to the scheme over the period 2020 to 2022 are £132m.
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. The US scheme’s funded status is in excess of 100%.
Employer cash contributions to defined benefit pension schemes in respect of 2020 are expected to be approximately £58m including a
£44m pension deficit funding contribution relating to the UK scheme recovery plan.
The pension expense (excluding interest amounts) recognised in the income statement consists of:
Defined benefit pension expense
Defined contribution pension expense
Total
2019
£m
11
109
120
2018
£m
47
95
142
2017
£m
4
91
95
£120m (2018 £135m; 2017: £95m) of the total pension cost is recognised within operating profit.
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)/cost
Defined benefit pension expense
Net interest on net defined benefit obligation
Net defined benefit pension expense
2019
2018
2017
UK
£m
21
(8)
13
9
22
US
£m
3
(5)
(2)
3
1
Total
£m
24
(13)
11
12
23
UK
£m
27
11
38
6
44
US
£m
9
–
9
3
12
Total
£m
36
11
47
9
56
UK
£m
33
(42)
(9)
10
1
US
£m
14
(1)
13
5
18
Total
£m
47
(43)
4
15
19
In 2019, the past service credit relates to changes to both the UK and US schemes. In 2018, a past service cost was recognised to account
for the impact of GMP equalisation in the UK. In 2017 settlement and past service credits primarily related to changes to the UK scheme.
Net interest on net defined benefit pension scheme liabilities is presented within net finance costs in the income statement.
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
2019
UK
2.05%
2.95%
US
3.25%
2.50%
2018
UK
2.85%
3.15%
US
4.20%
2.50%
2017
UK
2.60%
3.15%
US
3.55%
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 2019
Member currently aged 60 years
Member currently aged 45 years
Male average life
expectancy
Female average
life expectancy
UK
85
86
US
86
87
UK
88
89
US
88
89
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 142
Notes to the consolidated financial statements
for the year ended 31 December 2019
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/(cost)
Interest on pension scheme liabilities
Actuarial (loss)/gain on financial assumptions
Actuarial gain/(loss) arising from experience assumptions
Contributions by employees
Liabilities transferred on settlement
Benefits paid
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
Assets transferred on settlement
Benefits paid
Exchange translation differences
At end of year
Opening net deficit
Service cost
Net interest on net defined benefit obligation
Settlement and past service credits/(cost)
Contributions by employer
Actuarial (losses)/gains
Exchange translation differences
Net pension obligation
Impact of asset ceiling
Overall net pension obligation
2019
2018
UK
£m
US
£m
Total
£m
UK
£m
US
£m
Total
£m
(3,772)
(21)
8
(104)
(495)
22
(9)
–
120
–
(4,251)
3,413
95
304
66
9
–
(120)
–
3,767
(359)
(21)
(9)
8
66
(169)
–
(484)
–
(484)
(1,040)
(3)
5
(42)
(116)
(5)
–
65
77
41
(1,018)
966
39
166
6
–
(65)
(77)
(40)
995
(74)
(3)
(3)
5
6
45
1
(23)
(13)
(36)
(4,812)
(24)
13
(146)
(611)
17
(9)
65
197
41
(5,269)
4,379
134
470
72
9
(65)
(197)
(40)
4,762
(433)
(24)
(12)
13
72
(124)
1
(507)
(13)
(520)
(3,854)
(27)
(11)
(98)
91
4
(8)
–
131
–
(3,772)
3,589
92
(184)
39
8
–
(131)
–
3,413
(265)
(27)
(6)
(11)
39
(89)
–
(359)
–
(359)
(1,075)
(9)
–
(38)
85
2
–
–
56
(61)
(1,040)
1,012
35
(89)
7
–
–
(56)
57
966
(63)
(9)
(3)
–
7
(2)
(4)
(74)
–
(74)
(4,929)
(36)
(11)
(136)
176
6
(8)
–
187
(61)
(4,812)
4,601
127
(273)
46
8
–
(187)
57
4,379
(328)
(36)
(9)
(11)
46
(91)
(4)
(433)
–
(433)
As at 31 December 2019, the defined benefit obligations comprised £5,016m (2018: £4,582m) in relation to funded schemes and £253m
(2018: £230m) in relation to unfunded schemes.
The weighted average duration of defined benefit scheme liabilities is 19 years in the UK (2018: 19 years) and 13 years in the US
(2018: 12 years). Deferred tax assets of £96m (2018: £86m) 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 recognised
Net pension obligation
Overall net pension obligation
2019
£m
45
(565)
(520)
2018
£m
6
(439)
(433)
RELX Annual report and financial statements 2019 | Financial statements and other information 6 Pension schemes (continued)
Amounts recognised in the statement of comprehensive income are set out below:
Gains and losses arising during the year:
Experience gains/(losses) 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
2019
£m
17
470
(743)
142
(10)
(124)
(704)
(828)
2018
£m
6
(273)
242
–
(66)
(91)
(613)
(704)
Additionally a loss of £13m (2018: nil) is recognised in the statement of comprehensive income in relation to the asset ceiling.
The major categories and fair values of scheme assets at the end of the reporting period are as follows:
FAIR VALUE OF SCHEME ASSETS
2019
2018
Equities
Liability matching assets
Property funds and ground leases
Direct lending
Cash and cash equivalents
Other
Total
UK
£m
1,358
1,414
715
182
75
23
3,767
US
£m
126
850
–
–
13
6
995
Total
£m
1,484
2,264
715
182
88
29
4,762
UK
£m
1,128
1,363
723
151
26
22
3,413
US
£m
115
831
–
–
4
16
966
143
2017
£m
(38)
287
(102)
69
17
233
(846)
(613)
Total
£m
1,243
2,194
723
151
30
38
4,379
Included within liability matching assets are government bonds totalling £1,486m (2018: £1,448m).
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 liability matching and other assets. 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, liability matching assets, property funds, cash and other assets. Asset allocations are dependent
on a variety of factors including the duration of scheme liabilities and the funded position of the plan.
All equities and 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
228
105
193
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 as some of the assumptions may be correlated.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview
144
Notes to the consolidated financial statements
for the year ended 31 December 2019
7 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
Interest on lease liabilities
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 and other
Finance costs
Interest on bank deposits
Interest income on net finance lease receivables
Fair value gains on designated fair value hedge relationships
Gains on loans and derivatives not designated as hedges
Finance income
Net finance costs
2019
£m
(20)
(266)
(15)
(301)
–
–
(13)
(314)
3
2
1
3
9
(305)
2018
£m
(22)
(161)
(14)
(197)
(10)
(1)
(9)
(217)
4
2
–
–
6
(211)
2017
£m
(10)
(154)
(17)
(181)
(9)
–
(15)
(205)
3
2
1
–
6
(199)
A loss of £1m (2018: losses of £8m; 2017: gains of £63m) on interest rate derivatives designated as cash flow hedges was recognised in
other comprehensive income and accumulated in the hedge reserve, and may be reclassified to the income statement in future periods.
Gains of nil (2018: gains of £3m; 2017: gains of £65m) in total were transferred from the hedge reserve in the period. The movements in
2017 included gains of £78m related to foreign exchange movements on debt hedges which were reclassified immediately to the income
statement and offset £78m of foreign exchange losses on the related debt.
The interest charge on term debt includes a charge of £99m in respect of the early redemption of bonds that were due to be repaid in
October 2022. The redemption of these bonds took place in January 2020 and was committed to at 31 December 2019.
8 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 are reported within disposals and other items – see note 16.
Revaluation of investments
Gain/(loss) on disposal of businesses and assets held for sale
Net gain/(loss) on disposals and other non-operating items
2019
£m
25
26
51
2018
£m
(11)
(22)
(33)
2017
£m
5
10
15
RELX Annual report and financial statements 2019 | Financial statements and other information 145
9 Taxation
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.
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.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 146
Notes to the consolidated financial statements
for the year ended 31 December 2019
9 Taxation (continued)
Current tax
United Kingdom
Rest of world
Total current tax charge
Deferred tax
Tax expense
2019
£m
(141)
(241)
(382)
44
(338)
2018
£m
(71)
(226)
(297)
5
(292)
2017
£m
(104)
(335)
(439)
374
(65)
Cash tax paid in the year was £464m (2018: £415m; 2017: £449m), 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.
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 different to the current tax expense in the
income statement 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
Non-deductible costs of share based remuneration
Non-deductible disposal-related gains and losses
Deferred tax assets of the period not recognised
Change in recognition of deferred tax assets or liabilities
Other adjustments in respect of prior periods
Exceptional tax credit
Tax expense
2019
2018
2017
£m
1,847
(418)
10
(3)
(1)
4
(15)
12
73
–
(338)
%
22.6%
(0.5)%
0.2%
0.1%
(0.2)%
0.8%
(0.6)%
(4.0)%
–
18.3%
£m
1,720
(361)
8
(24)
(1)
–
(24)
(15)
13
112
(292)
%
21.0%
(0.5)%
1.4%
0.1%
0.0%
1.4%
0.9%
(0.8)%
(6.5)%
17.0%
£m
1,721
(407)
7
(15)
(1)
(36)
(10)
16
35
346
(65)
%
23.6%
(0.4)%
0.9%
0.1%
2.1%
0.6%
(0.9)%
(2.1)%
(20.1)%
3.8%
The weighted average applicable tax rate for the year was 22.6% (2018: 21.0%, 2017: 23.6%), 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.
RELX Annual report and financial statements 2019 | Financial statements and other information 147
9 Taxation (continued)
In the UK, a reduction in the corporation tax rate from 19% to 17% from April 2020 was enacted in 2016. However the current government
stated in December 2019 that the corporation tax rate will remain at 19% instead of reducing to 17%. It is expected that this will be included
in the UK Budget in March 2020 and enacted shortly afterwards. In the US, the Tax Cuts and Jobs Act included a reduction in the federal
corporate tax rate from 35% to 21% from January 2018. In the Netherlands, a reduction in the corporate tax rate from 25% to 21.7%
from 2021 was enacted in 2019. In total, the deferred tax effect of changes in tax rates for the year was a tax credit of £6m (2018: £8m,
2017: £346m).
The effective tax rate of 18.3% (2018:17%, 2017:3.8%) is lower than the weighted average applicable tax rate of 22.6% mainly because of a
tax credit arising from the substantial resolution of certain prior year tax matters, which is included in other adjustments in respect of
prior periods. In 2018 and 2017, the effective tax rate was also lower than the weighted average applicable tax rate due to exceptional tax
credits. In 2018, the exceptional tax credit arose from the substantial resolution of certain prior year tax matters and the deferred tax
effect of tax rate reductions in the Netherlands and the US. In 2017, the exceptional tax credit related to a one-off non-cash credit from
a deferred tax adjustment arising from the US Tax Cuts and Jobs Act.
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 credit/(debit) recognised in other comprehensive income
Tax credit/(debit) on share based remuneration recognised directly in equity
Deferred tax assets
Deferred tax liabilities
Total
2019
£m
23
(8)
15
6
2018
£m
15
9
24
(3)
2019
£m
239
(593)
(354)
2017
£m
(59)
(30)
(89)
8
2018
£m
455
(830)
(375)
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
Pension
balances
£m
Other
temporary
differences
£m
Deferred tax (liability)/asset at
1 January 2018
Credit/(charge) to profit
Credit/(charge) to equity/other
comprehensive income
Acquisitions
Exchange translation differences
Deferred tax (liability)/asset at
1 January 2019
Credit/(charge) to profit
Credit/(charge) to equity/other
comprehensive income
Acquisitions
Exchange translation differences
Deferred tax (liability)/asset at
(267)
75
–
–
(12)
(204)
48
–
–
6
(426)
13
–
(88)
(26)
(527)
9
–
(44)
19
(302)
13
–
–
(17)
(306)
19
(17)
–
14
257
(51)
–
–
1
207
(19)
–
–
(9)
31 December 2019
(150)
(543)
(290)
179
87
(32)
–
37
4
96
(18)
–
–
(3)
75
66
3
15
–
2
86
(2)
13
–
(1)
96
Total
£m
(307)
5
12
(51)
(34)
(375)
44
6
(44)
15
278
(16)
(3)
–
14
273
7
10
–
(11)
279
(354)
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.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 148
Notes to the consolidated financial statements
for the year ended 31 December 2019
9 Taxation (continued)
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 and interest expenses of approximately £255m (2018: £213m) carried forward
at year end. The deferred tax asset not recognised in respect of these losses and interest expenses is approximately £66m (2018: £52m).
Of the unrecognised losses and interest expenses, £124m (2018: £93m) will expire if not utilised within ten years and £131m (2018:
£121m) will expire after more than ten years or have no expiration date.
Deferred tax assets of approximately £6m (2018: £4m) have not been recognised in respect of tax losses and other temporary
differences carried forward of £33m (2018: £24m), which can only be used to offset future capital gains.
10 Earnings per share
Accounting policy
Earnings per share (‘EPS’) is calculated by taking the reported net profit attributable to shareholders and dividing this by the total
weighted average number of shares.
Adjusted earnings per share is calculated by dividing adjusted net profit attributable to RELX PLC shareholders by the total weighted
average number of shares.
EARNINGS PER SHARE – FOR THE YEAR
ENDED 31 DECEMBER
Basic earnings per share
Diluted earnings per share
2019
2018
2017
Net profit
attributable
to RELX PLC
shareholders
£m
Weighted
average
number
of shares
(millions)
1,505 1,943.5
1,505 1,956.2
Net profit
attributable
to RELX PLC
shareholders
£m
Weighted
average
number
of shares
(millions)
1,422 1,977.2
1,422 1,990.8
Net profit
attributable
to RELX PLC
shareholders
£m
Weighted
average
number
of shares
(millions)
1,648 2,019.4
1,648 2,035.2
EPS
(pence)
71.9p
71.4p
EPS
(pence)
77.4p
76.9p
EPS
(pence)
81.6p
81.0p
The diluted figures are calculated after taking account of potential additional ordinary shares arising from share options and
conditional shares.
ADJUSTED EARNINGS PER SHARE
2019
2018
2017
Adjusted net
profit
attributable
to RELX PLC
Weighted
average
number
of shares
(millions)
1,808 1,943.5
shareholders
£m
Adjusted net
profit
attributable to
RELX PLC
shareholders
£m
Weighted
average
number of
shares
(millions)
1,674 1,977.2
Adjusted
EPS
(pence)
84.7p
Adjusted net
profit
attributable to
RELX PLC
shareholders
£m
Weighted
average
number of
shares
(millions)
1,620 2,019.4
Adjusted
EPS
(pence)
80.2p
Adjusted
EPS
(pence)
93.0p
Adjusted earnings per share
RECONCILIATION OF ADJUSTED NET PROFIT ATTRIBUTABLE TO RELX PLC SHAREHOLDERS
Net profit attributable to RELX PLC shareholders
Adjustments (post-tax):
Amortisation of acquired intangible assets
Acquisition-related costs
Net interest on net defined benefit pension obligation and other
Disposals and other non-operating items
Other deferred tax credits from intangible assets*
Exceptional tax credit
Adjusted net profit attributable to RELX PLC shareholders
* Movements on deferred tax liabilities arising on acquired intangible assets that do not qualify for tax amortisation.
2019
£m
1,505
321
69
10
(40)
(57)
–
1,808
2018
£m
1,422
322
71
7
19
(55)
(112)
1,674
2017
£m
1,648
356
43
11
1
(93)
(346)
1,620
RELX Annual report and financial statements 2019 | Financial statements and other information 149
11 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 OPERATING PROFIT TO CASH GENERATED FROM OPERATIONS
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
Depreciation of right-of-use assets
Share based remuneration
Total non-cash items
(Increase)/decrease in inventories and pre-publication costs
(Increase)/decrease in receivables
Increase/(decrease) 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
Increase/(decrease) in cash and cash equivalents
(Increase)/decrease in short-term bank loans,
overdrafts and commercial paper
Issuance of term debt
Repayment of term debt
Repayment of leases
Change in net borrowings resulting from cash flows
Borrowings in acquired businesses
Remeasurement and derecognition of leases
Inception of leases
Fair value and other adjustments to borrowings
and related derivatives
Exchange translation differences
At end of year
Note
12
Cash and
cash
equivalents
£m
114
Borrowings
£m
(6,365)
Related
derivative
financial
instruments
£m
25
Finance
lease
receivable
£m
49
27
–
–
–
–
27
–
–
–
–
(98)
(729)
617
102
(108)
(6)
(28)
(62)
–
–
–
–
–
–
–
–
–
–
(3)
138
(123)
278
(6,414)
29
(2)
52
–
–
–
–
(16)
(16)
–
–
2
–
(2)
33
2019
£m
2,101
(41)
294
249
58
82
32
715
(14)
(116)
79
(51)
2,724
2019
£m
(399)
–
(24)
(423)
2018
£m
1,964
(32)
287
225
62
77
41
692
(7)
(89)
27
(69)
2,555
2018
£m
(919)
–
(16)
(935)
2017
£m
1,905
(37)
313
203
65
75
39
695
2
37
(76)
(37)
2,526
2017
£m
(117)
(1)
(13)
(131)
2019
£m
(6,177)
2018
£m
(5,042)
2017
£m
(5,050)
27
1
(45)
(98)
(729)
617
86
(97)
(6)
(28)
(60)
(147)
(958)
211
81
(812)
(12)
(12)
(28)
148
(873)
712
78
20
–
(6)
(36)
(94)
271
(6,191)
(25)
(246)
(6,177)
(11)
41
(5,042)
Net borrowings comprise cash and cash equivalents, loan capital, lease liabilities and receivables, 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.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview
150
Notes to the consolidated financial statements
for the year ended 31 December 2019
12 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
Non current assets
Current liabilities
Borrowings
Deferred tax
Net assets acquired
Consideration (after taking account of £32m (2018: £27m; 2017: £7m) net cash acquired)
Less: consideration deferred to future years
Less: acquisition date fair value of equity interest
Net cash flow
Fair value
2019
£m
257
245
1
20
4
(53)
(6)
(44)
424
424
(10)
(15)
399
Fair value
2018
£m
626
423
5
24
12
(72)
(12)
(51)
955
955
(36)
–
919
Fair value
2017
£m
77
56
–
3
–
(16)
–
(2)
118
118
(1)
–
117
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 2020 consolidated financial statements. There were no significant adjustments
to the provisional fair values of prior year acquisitions established in 2018.
The businesses acquired in 2019 contributed £51m to revenue, increased adjusted operating profit by £8m, decreased net profit by
£9m (after charging £17m of integration costs and amortisation of acquired intangibles) and contributed £3m to net cash outflow 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 shareholders for the year would have been £7,897m, £2,487m and £1,501m respectively, before taking account
of acquisition financing costs.
Since 31 December 2019, the Group has acquired or committed to acquire a number of businesses, for aggregate consideration of
£0.6bn. These acquisitions include ID Analytics, a provider of credit and fraud solutions, and Emailage, a provider of email based fraud
solutions, both of which will become part of Risk & Business Analytics.
13 Equity dividends
ORDINARY DIVIDENDS PAID IN THE YEAR
RELX PLC
RELX NV
Total
2019
£m
842
–
842
2018
£m
420
376
796
2017
£m
400
362
762
The RELX NV amount shown relates to dividends paid prior to the corporate simplification.
Ordinary dividends declared and paid in the year ended 31 December 2019, in amounts per ordinary share, comprise: a 2018 final
dividend of 29.7p (2018: 27.7p; 2017: 25.7p) and a 2019 interim dividend of 13.6p (2018: 12.4p; 2017: 11.7p), giving a total of 43.3p (2018: 40.1p;
2017: 37.4p).
The Directors of RELX PLC have proposed a final dividend of 32.1p (2018: 29.7p; 2017: 27.7p), giving a total for the financial year of 45.7p
(2018: 42.1p; 2017: 39.4p). The total cost of funding the proposed final dividend is expected to be £620m, for which no liability has been
recognised at the statement of financial position date.
The Employee Benefit Trust has currently waived the right to receive dividends on RELX PLC shares. This waiver has been applied to
dividends paid in 2019, 2018 and 2017.
RELX Annual report and financial statements 2019 | Financial statements and other information 151
14 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 Board. 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
Exchange translation differences
At end of year
2019
£m
6,899
257
(64)
(268)
6,824
2018
£m
5,965
626
(25)
333
6,899
The carrying amount of goodwill is after cumulative amortisation of £1,178m (2018: £1,222m), which was charged prior to the adoption
of IFRS, and £9m (2018: £9m) of subsequent impairment charges recorded in prior years.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 152
Notes to the consolidated financial statements
for the year ended 31 December 2019
14 Goodwill (continued)
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 or indefinite lived intangible assets in 2019 (2018: 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
The key assumptions used for each group of cash generating units are disclosed below:
KEY ASSUMPTIONS
Scientific, Technical & Medical
Risk & Business Analytics
Legal
Exhibitions
2019
£m
1,594
3,186
1,428
616
6,824
2018
£m
1,620
3,283
1,465
531
6,899
2019
2018
Pre-tax
discount
rate
9.4%
10.0%
10.6%
11.6%
Nominal
long-term
market
growth rate
3%
3%
2%
3%
Nominal
long-term
market
growth rate
3%
3%
2%
3%
Pre-tax
discount rate
10.0%
11.5%
12.2%
12.7%
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. The Group’s weighted average cost of capital is derived from a risk free rate, a market risk premium, a risk adjustment
(beta) and a cost of debt adjustment. The key assumptions within the forecast growth in the cash flows over a forecast period of up to
five years are revenue growth, operating margin and cash conversion. Revenue growth and operating profit margin forecasts for each
CGU are derived from past results adjusted by management based on salient current and future considerations. Cash conversion rates
for each CGU are based on historical cash conversion rates. 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.
RELX Annual report and financial statements 2019 | Financial statements and other information 153
15 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 encompasses 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.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 154
Notes to the consolidated financial statements
for the year ended 31 December 2019
15 Intangible assets (continued)
Cost
At 1 January 2018
Acquisitions
Additions
Disposals/reclassified as held for sale
Exchange translation differences
At 1 January 2019
Acquisitions
Additions
Disposals/reclassified as held for sale
Exchange translation differences
At 31 December 2019
Accumulated amortisation
At 1 January 2018
Charge for the year
Disposals/reclassified as held for sale
Exchange translation differences
At 1 January 2019
Charge for the year
Disposals/reclassified as held for sale
Exchange translation differences
At 31 December 2019
Net book amount
At 31 December 2018
At 31 December 2019
Market and
customer-
related
£m
Content,
software
and other
£m
Total
acquired
intangible
assets
£m
Internally
developed
intangible
assets
£m
3,519
310
–
(15)
211
4,025
161
–
(28)
(158)
4,000
1,907
169
(15)
105
2,166
182
(28)
(91)
2,229
3,492
113
–
(11)
130
3,724
84
–
(57)
(116)
3,635
3,046
118
(11)
113
3,266
112
(57)
(103)
3,218
7,011
423
–
(26)
341
7,749
245
–
(85)
(274)
7,635
4,953
287
(26)
218
5,432
294
(85)
(194)
5,447
2,691
–
304
(148)
99
2,946
–
333
(130)
(108)
3,041
1,555
225
(111)
60
1,729
249
(130)
(71)
1,777
Total
£m
9,702
423
304
(174)
440
10,695
245
333
(215)
(382)
10,676
6,508
512
(137)
278
7,161
543
(215)
(265)
7,224
1,859
1,771
458
417
2,317
2,188
1,217
1,264
3,534
3,452
Included in content, software and other acquired intangible assets are assets with a net book value of £54m (2018: £80m) 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 £114m (2018: £119m) 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. Indefinite
lived intangibles are tested for impairment at least annually. See note 14 for details of impairment testing.
RELX Annual report and financial statements 2019 | Financial statements and other information 155
16 Investments
Accounting policy
Investments, other than investments in joint arrangements and associates, are stated in the statement of financial position at fair
value. Changes in the fair value of investments held as part of the venture capital portfolio are reported in disposals and other
non-operating items in the income statement. 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.
Venture capital investments and equity investments represent interests in unlisted securities. The fair value of unlisted securities is
based 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
Venture capital investments
Total
2019
£m
118
133
251
2018
£m
104
151
255
The value of venture capital investments and equity 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 8.
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
Additions
Disposals
Exchange translation differences
At end of year
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
2019
£m
104
41
(34)
24
(11)
(6)
118
RELX’s share
2019
£m
123
41
112
(58)
54
64
118
2018
£m
102
32
(30)
2
–
(2)
104
2018
£m
101
32
96
(49)
47
57
104
The Group’s consolidated other comprehensive income includes no income or losses relating to joint ventures in either period.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 156
Notes to the consolidated financial statements
for the year ended 31 December 2019
17 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
2019
Land and
buildings
£m
Fixtures and
equipment
£m
223
1
5
(8)
(8)
213
146
9
(7)
(5)
143
640
–
42
(59)
(21)
602
519
49
(59)
(17)
492
Total
£m
863
1
47
(67)
(29)
815
665
58
(66)
(22)
635
Net book amount
70
110
180
No depreciation is provided on freehold land of £14m (2018: £14m).
Amounts relating to right-of-use assets under IFRS 16 can be found in note 23.
2018
Land and
buildings
£m
Fixtures and
equipment
£m
217
–
5
(8)
9
223
137
9
(6)
6
146
77
599
5
51
(40)
25
640
485
53
(40)
21
519
121
Total
£m
816
5
56
(48)
34
863
622
62
(46)
27
665
198
RELX Annual report and financial statements 2019 | Financial statements and other information 157
18 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 described in note 16. 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. (These investments are typically classified as either Level 2 or 3 in
the IFRS 13 fair value hierarchy).
Trade receivables are carried in the statement of financial position at invoiced value less allowance for expected credit losses.
Expected credit losses are 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. With effect from 1 January 2018, the
fair value amounts relating to foreign currency basis spreads are recorded in a separate component of equity in the cost of hedging
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 recorded in the statement of financial position
at fair value, with changes in fair value recognised in the income statement.
The fair values of derivative financial instruments 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.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 158
Notes to the consolidated financial statements
for the year ended 31 December 2019
18 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 2019
Contractual cash flow
Borrowings
Fixed rate borrowings
Floating rate borrowings
Lease liabilities
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
(5,293)
(779)
(342)
(1,332)
(779)
(104)
(4)
(1)
(29)
(1)
(41)
(1,984)
35
14
32
(6,367)
19
31
1,977
(2,214)
1-2 years
£m
2-3 years
£m
3-4 years
£m
4-5 years
£m
More than
5 years
£m
Total
£m
(528)
–
(92)
–
(16)
(351)
10
7
354
(616)
(134)
–
(62)
–
(16)
(179)
8
7
185
(191)
(732)
–
(50)
–
(35)
(34)
8
26
35
(782)
(498)
–
(32)
(2,791)
–
(48)
(6,015)
(779)
(388)
(1)
(15)
–
3
7
–
(536)
(2)
(512)
–
(4)
(635)
(2,548)
–
515
–
(2,838)
48
593
2,551
(7,177)
AT 31 DECEMBER 2018
Contractual cash flow
Borrowings
Fixed rate borrowings
Floating rate borrowings
Lease liabilities
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
(5,315)
(690)
(360)
Within
1 year
£m
(752)
(686)
(104)
(15)
(1)
(53)
(2)
(48)
(1,498)
21
13
13
(6,387)
12
33
1,473
(1,572)
1-2 years
£m
2-3 years
£m
3-4 years
£m
4-5 years
£m
(610)
–
(92)
(2)
(21)
(375)
13
8
361
(718)
(552)
–
(75)
(2)
(21)
(181)
3
8
173
(647)
(879)
–
(47)
(2)
(21)
(25)
1
8
26
(939)
(732)
–
(30)
(3)
(39)
–
5
25
–
(774)
More than
5 years
£m
(2,555)
(4)
(63)
Total
£m
(6,080)
(690)
(411)
(8)
(557)
–
(19)
(707)
(2,079)
3
553
–
(2,631)
37
635
2,033
(7,281)
The carrying amount of derivative financial liabilities comprises £4m (2018: £15m) in relation to fair value hedges, £13m (2018: £41m) in
relation to cash flow hedges and £17m (2018: £13m) not designated as hedging instruments. The carrying amount of derivative financial
assets comprises £50m (2018: £33m) in relation to fair value hedges, £27m (2018: £7m) in relation to cash flow hedges and £4m (2018:
£7m) not designated as hedging instruments.
Other payables balance of £108m (2018: nil), including put options, are currently expected to be settled in 4 to 5 years.
RELX Annual report and financial statements 2019 | Financial statements and other information 159
18 Financial instruments (continued)
At 31 December 2019, the Group had access to a $3,000m committed bank facility, consisting of various tranches with maturities through
to July 2024, which was undrawn. This facility backs up short-term borrowings. All borrowings that mature within the next twelve
months can be covered by the facility and by utilising available cash resources.
The committed bank facility is subject to a financial covenant typical to the Group’s size and financial strength. The Group had significant
headroom within this covenant for the year ended 31 December 2019. There are no financial covenants in any outstanding public bonds.
Market risk
The Group’s primary market risks are 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. Where the
impact of derivatives on the income statement and the statement of financial position could be significant, hedge accounting is applied
(subject to satisfying the required criteria) as described in ‘Hedge accounting’ below. 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 and interest rate swaps to give a target mix of fixed rate and floating rate borrowings.
Interest rate derivatives are used only to hedge an underlying risk and no net market positions are held.
At 31 December 2019, 46% of gross bank and bond borrowings were at fixed rate. A 100 basis point reduction in interest rates would
result in an estimated decrease in net finance costs of £31m (2018: £32m), based on the composition of financial instruments including
cash, cash equivalents, bank loans and commercial paper borrowings at 31 December 2019. A 100 basis point rise in interest rates would
result in an estimated increase in net finance costs of £31m (2018: £32m).
The impact on net equity of a theoretical change in interest rates as at 31 December 2019 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 decrease in net equity of £1m (2018: £1m) and a 100 basis point
increase in interest rates would increase net equity by an estimated £1m (2018: £1m). 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. Further information
is provided in ‘Cash flow hedges’ below.
A theoretical weakening of all currencies by 10% against sterling at 31 December 2019 would decrease the carrying value of net
assets, excluding net borrowings, by £749m (2018: £782m). This would be offset to a degree by a decrease in net borrowings of £526m
(2018: £625m). A strengthening of all currencies by 10% against sterling at 31 December 2019 would increase the carrying value of net
assets, excluding net borrowings, by £749m (2018: £782m) and increase net borrowings by £526m (2018: £625m).
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 £129m (2018: £127m). A 10% strengthening of all foreign currencies against sterling
on this basis would increase net profit for the year by £129m (2018: £127m).
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 160
Notes to the consolidated financial statements
for the year ended 31 December 2019
18 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.
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 2019, cash and cash equivalents totalled £138m (2018: £114m), of which 93% (2018: 93%) 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. Expected credit losses are 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, after considering loss allowance: past due up to one
month £215m (2018: £181m); past due two to three months £108m (2018: £93m); past due four to six months £39m (2018: £37m); and past
due greater than six months £45m (2018: £35m).
Hedge accounting
The hedging relationships that are designated under IFRS 9 – Financial Instruments with effect from 1 January 2018, and/or that were
previously 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. The table
below details the designated fair value hedge relationships that were in place at 31 December 2019, 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, together
with the related fixed and floating rates.
FAIR VALUE HEDGE RELATIONSHIPS
€550m loan notes and €550m interest rate swaps maturing 2020
31 December
2019
Principal
amount
£m
(466)
31 December
2018
Principal
amount
£m
(494)
Fixed rate
Floating rate
2.5% LIBOR+1.1%
€500m bond and €500m interest rate swaps maturing 2021
(423)
(449)
0.4% LIBOR+0.3%
$700m bond and $700m interest rate swaps maturing 2023
(528)
(549)
3.5% LIBOR+0.8%
€500m bond and €500m interest rate swaps maturing 2024
(423)
(449)
1.0% LIBOR+0.7%
€600m bond and €600m/$669.3m cross-currency interest rate swaps maturing 2025
(505)
(525)
1.3% LIBOR+1.3%
$200m bond and $200m interest rate swaps maturing 2027
(151)
(2,496)
(157)
(2,623)
7.2% LIBOR+5.8%
RELX Annual report and financial statements 2019 | Financial statements and other information 161
18 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 as part of finance costs, together with the total carrying values of the borrowings and related derivatives included in the
statement of financial position, for the three years ended 31 December 2019, 2018 and 2017 were as follows:
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
AND CARRYING VALUES
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 on borrowings and related derivatives/ total carrying
1 January
2019
£m
13
(14)
(1)
(39)
39
–
(26)
25
Fair value
movement
gain/(loss)
£m
(26)
27
1
(2)
2
–
(28)
29
Exchange
gain/(loss)
£m
–
–
–
2
(2)
–
2
(2)
31 December
2019
£m
(13)
13
–
(39)
39
–
(52)
52
Carrying
values
£m
(699)
13
(686)
(1,853)
39
(1,814)
(2,552)
52
value
(1)
1
–
–
(2,500)
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
AND CARRYING VALUES
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 on borrowings and related derivatives/ total carrying value
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
AND CARRYING VALUES
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 on borrowings and related derivatives/
1 January
2017
£m
16
(16)
–
(33)
32
(1)
(17)
16
1 January
2018
£m
12
(12)
–
(17)
17
–
(5)
5
–
Fair value
movement
gain/(loss)
£m
(1)
1
–
17
(16)
1
16
(15)
Fair value
movement
gain/(loss)
£m
–
(1)
(1)
(21)
21
–
(21)
20
(1)
Exchange
gain/(loss)
£m
1
(1)
–
(1)
1
–
–
–
–
31 December
2018
£m
13
(14)
(1)
(39)
39
–
(26)
25
(1)
Carrying
values
£m
(701)
(14)
(715)
(1,952)
39
(1,913)
(2,653)
25
(2,628)
De-designated
£m
(2)
2
–
–
–
–
(2)
2
Exchange
gain/(loss)
£m
(1)
1
–
(1)
1
–
(2)
2
31 December
2017
£m
12
(12)
–
(17)
17
–
(5)
5
Carrying values
£m
(147)
(12)
(159)
(1,922)
17
(1,905)
(2,069)
5
total carrying value
(1)
1
–
–
–
(2,064)
All fair value hedges were highly effective throughout the three years ended 31 December 2019.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 162
Notes to the consolidated financial statements
for the year ended 31 December 2019
18 Financial instruments (continued)
Gross borrowings as at 31 December 2019 included £19m (2018: £23m) 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 (2018: £3m) of these fair value adjustments were amortised in the year as a reduction to finance costs.
Cash flow hedges
As part of the Group’s interest rate exposure management, it has entered into certain cross-currency interest rate derivatives,
individual components of which have been accounted for as cash flow hedges (with the remaining components accounted for as fair
value hedges, as described above). These comprised the following:
1
2
Interest rate derivatives which swapped a fixed rate CHF 275m bond, issued in June 2013 and maturing in December 2018, to floating
rate USD debt for the whole of its term. The component relating to the swap of fixed rate CHF coupons to fixed rate USD cash flows was
accounted for as a cash flow hedge under IAS 39 and was de-designated on 31 December 2017. The gains which had accumulated in the
cash flow hedge reserve up to the date of de-designation were reclassified to the income statement as part of finance costs during 2018.
Interest rate derivatives which swapped a fixed rate €600m bond, issued in May 2015 and maturing in May 2025, to floating rate USD
debt for the whole of its term. The component relating to the swap of floating rate euro cash flows to floating rate USD cash flows
(including credit margin) was accounted for as a cash flow hedge under IAS 39 up to 31 December 2017. From 1 January 2018 the
component relating to the swap of the euro credit margin to USD is being accounted for a cash flow hedge under IFRS 9, with the
amount associated with foreign currency basis spreads recorded in the cost of hedging reserve.
As part of the Group’s foreign currency exposure management, it has entered into 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. These have
been accounted for as cash flow hedges under IAS 39 and under IFRS 9 of the forecast foreign currency revenues, with gains and losses
on the forward contracts deferred in the hedge reserve until the related revenue is recognised, at which time the accumulated gains and
losses are reclassified to the income statement.
Movements in the hedge reserve in 2018 and 2019 and, with effect from 1 January 2018, the cost of hedging reserve, including gains and
losses on cash flow hedging instruments, were as follows:
Hedge reserve at 31 December 2017: gains/(losses) deferred
Reclassification on 1 January 2018
Losses arising in 2018
Amounts recognised in income statement
Hedge reserve at 31 December 2018: gains/(losses) deferred
(Losses)/gains arising in 2019
Amounts recognised in income statement
Hedge reserve at 31 December 2019: (losses) /gains deferred
Interest rate
hedge reserve
£m
5
(1)
–
(3)
1
(1)
–
–
Cost of
hedging
reserve
£m
–
1
(8)
–
(7)
–
–
(7)
Foreign
currency
hedge reserve
£m
(7)
–
(51)
20
(38)
17
35
14
Total
£m
(2)
–
(59)
17
(44)
16
35
7
All cash flow hedges were highly effective throughout the two years ended 31 December 2019.
A deferred tax credit of nil (2018: £8m) in respect of the above gains and losses at 31 December 2019 was also deferred in the
hedge reserve.
Of the amounts recognised in the income statement in the year, losses of £35m (2018: £20m) were recognised in revenue, and gains of nil
(2018: £3m) were recognised in finance costs. A tax credit of £6m (2018: £3m) was recognised in relation to these items.
The deferred gains and losses on foreign currency cash flow hedges at 31 December 2019 are currently expected to be recognised in the
income statement in future years as shown in the table below, together with the principal amount of hedges relating to each year and
their total carrying values included within derivative assets and liabilities in the statement of financial position:
2020
2021
2022
2023
Total
Foreign
currency
hedge reserve
£m
7
2
4
1
14
Principal
amount of
hedges
£m
502
394
221
34
1,151
Carrying
values
£m
5
2
4
1
12
The cash flows for these hedges are expected to occur in line with the recognition of the gains and losses in the income statement, or in
the preceding year. These cash flows are included in the table on page 158.
RELX Annual report and financial statements 2019 | Financial statements and other information 163
19 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
20 Trade and other receivables
Trade receivables
Loss allowance
Prepayments and accrued income
Current tax receivable
Net finance lease receivable
Total
2019
£m
2
181
34
217
2019
£m
1,858
(88)
1,770
236
28
33
2,067
2018
£m
2
171
39
212
2018
£m
1,829
(87)
1,742
224
–
49
2,015
Trade receivables are predominantly non-interest bearing and their carrying amounts approximate to their fair value.
Trade receivables are stated net of a loss allowance for expected credit losses. The movements in the loss allowance 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
21 Trade and other payables
2019
£m
87
8
(4)
(3)
88
2018
£m
79
14
(8)
2
87
Accounting policy
Deferred income is recognised when either a customer has paid consideration, or RELX has an unconditional right to an amount of
consideration, in advance of the goods and services being delivered.
Trade payables
Accruals
Social security and other taxes
Other payables
Deferred income
Total
2019
£m
173
684
129
422
2,071
3,479
2018
£m
187
711
127
407
2,000
3,432
Trade and other payables are predominantly non-interest bearing and their carrying amounts approximate to their fair value.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 164
Notes to the consolidated financial statements
for the year ended 31 December 2019
22 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
Lease liabilities
Term debt in fair value hedging relationships
Term debt previously in fair value hedging relationships
Total
2019
Falling due
within
1 year
£m
Falling due
in more than
1 year
£m
779
716
93
472
–
2,060
–
1,792
249
2,080
233
4,354
2018
Falling due
within
1 year
£m
Falling due in
more than
1 year
£m
686
614
92
–
–
1,392
–
1,808
268
2,652
245
4,973
Total
£m
779
2,508
342
2,552
233
6,414
Total
£m
686
2,422
360
2,652
245
6,365
The total fair value of financial liabilities measured at amortised cost (excluding lease liabilities) is £3,491m (2018: £3,254m). The total fair
value of term debt in fair value hedging relationships is £2,629m (2018: £2,742m). The total fair value of term debt previously in fair value
hedging relationships is £276m (2018: £283m).
RELX PLC has given guarantees in respect of certain long-term and short-term borrowings issued by subsidiaries. Included within term
debt above are debt securities issued by RELX Capital Inc., a 100% indirectly owned finance subsidiary of RELX PLC, which have been
registered with the US Securities and Exchange Commission. RELX PLC has fully and unconditionally guaranteed these securities,
which are not guaranteed by any other subsidiary of RELX PLC.
Analysis by year of repayment
2019
2018
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
779
–
–
–
–
–
–
779
Term debt
£m
1,188
425
33
658
433
2,556
4,105
5,293
Lease
liabilities
£m
93
87
57
47
29
29
249
342
Total
£m
2,060
512
90
705
462
2,585
4,354
6,414
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
686
–
–
–
–
–
–
686
Term debt
£m
614
508
451
688
669
2,389
4,705
5,319
Lease
liabilities
£m
92
87
70
42
27
42
268
360
Total
£m
1,392
595
521
730
696
2,431
4,973
6,365
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 2019 by a $3,000m (£2,262m) committed
bank facility, consisting of tranches of: $31m maturing in 2021, $1,219m maturing in 2022, $44m maturing in 2023 and $1,706m maturing
in 2024. The committed bank facility was undrawn.
RELX Annual report and financial statements 2019 | Financial statements and other information 165
22 Borrowings (continued)
Analysis by currency
US dollars
£ sterling
Euro
Other currencies
Total
2019
2018
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
309
–
423
47
779
Term
debt
£m
2,915
–
2,378
–
5,293
Lease
liabilities
£m
168
71
70
33
342
Total
£m
3,392
71
2,871
80
6,414
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
19
317
318
32
686
Term
debt
£m
2,493
300
2,526
–
5,319
Lease
liabilities
£m
177
66
85
32
360
Total
£m
2,689
683
2,929
64
6,365
Included in the US dollar amounts for term debt above is £525m (2018: £544m) of debt denominated in euros (€600m) (2018: €600m) that
was swapped into US dollars on issuance and against which there are related derivative financial instruments, which, as at 31 December
2019, had a fair value of £21m (2018: £19m).
23 Lease arrangements
Accounting policy
All leases where RELX is the lessee (with the exception of short-term and low-value leases) are recognised in the statement of
financial position. A lease liability is recognised based on the present value of the future lease payments, and a corresponding
right-of-use asset is recognised. The right-of-use asset is depreciated over the shorter of the lease term or the useful life of the
asset. Lease payments are apportioned between finance charges and a reduction of the lease liability.
Low-value items and short-term leases with a term of 12 months or less are not required to be recognised on the balance sheet and
payments made in relation to these leases are recognised on a straight-line basis in the income statement.
The leases held by the Group can be split into two categories: property and non-property. 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.
Non-property includes all other leases, such as cars and printers.
Right-of-use assets
At start of year
Additions
Acquisitions
Remeasurement
Disposals
Depreciation
Exchange translation differences
At end of year
Property
£m
246
Non-
property
£m
17
57
4
29
(2)
(74)
(9)
251
5
–
–
(1)
(8)
–
13
2019
£m
263
62
4
29
(3)
(82)
(9)
264
Property
£m
264
Non-
property
£m
23
26
7
13
(2)
(68)
6
246
5
5
–
(8)
(9)
1
17
2018
£m
287
31
12
13
(10)
(77)
7
263
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 166
Notes to the consolidated financial statements
for the year ended 31 December 2019
23 Lease arrangements (continued)
Lease liability
Current
Property
Non-property
Non-current
Property
Non-property
Total
2019
£m
(87)
(6)
(242)
(7)
(342)
2018
£m
(83)
(9)
(260)
(8)
(360)
Interest expense on the lease liabilities recognised within finance costs was £15m (2018: £14m; 2017: £17m).
As at 31 December 2019, RELX was committed to leases with future cash outflows totalling £9m (31 December 2018: £40m) which had
not yet commenced and as such are not accounted for as a liability as at 31 December 2019. A liability and corresponding right-of-use
asset will be recognised for these leases at the lease commencement date.
RELX subleases vacant space available within its leased properties. IFRS 16 specifies conditions whereby a sublease is classed as a
finance lease for the sub-lessor. The finance lease receivable balance held is as follows:
Short-term and low-value lease expenses have been disclosed in note 3.
Net finance lease receivable
Interest income recognised in relation to finance lease receivables is disclosed in note 7.
24 Share capital, share premium and shares held in treasury
2019
£m
33
2018
£m
49
Accounting policy
Shares of RELX PLC that are repurchased 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 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.
RELX PLC
CALLED UP SHARE CAPITAL – ISSUED AND FULLY PAID
At start of year
Issue of ordinary shares
Issue of bonus share
Issue of ordinary shares in exchange for RELX NV shares
Cancellation of shares
At end of year
No. of shares
2,011,043,101
3,059,558
1
–
(33,300,001)
1,980,802,659
2019
£m
290
1
–
–
(5)
286
No. of shares
1,123,682,106
1,580,885
–
930,780,110
(45,000,000)
2,011,043,101
2018
£m
162
–
–
134
(6)
290
At the 2019 AGM shareholders approved the issue of a bonus share with £4bn nominal value. The share was subsequently cancelled via a
capital reduction, creating £4bn of distributable reserves in RELX PLC to replace the RELX NV reserves lost in the corporate simplification.
RELX Annual report and financial statements 2019 | Financial statements and other information 167
24 Share capital, share premium and shares held in treasury (continued)
NUMBER OF ORDINARY SHARES
Year ended 31 December
RELX PLC
At start of year
Issue of ordinary shares
Issue of ordinary shares in exchange for RELX NV shares
Repurchase of ordinary shares
Net release/(purchase) of shares by the Employee Benefit Trust
Cancellation of shares
At end of year
Shares in
issue
(millions)
Treasury
shares
(millions)
2019
Shares in
issue net of
treasury
shares
(millions)
2018
Shares in
issue net of
treasury
shares
(millions)
2,011.0
3.1
–
–
–
(33.3)
1,980.8
(49.1)
–
–
(33.5)
0.4
33.3
(48.9)
1,961.9
3.1
–
(33.5)
0.4
–
1,931.9
1,060.1
1.6
927.3
(26.9)
(0.2)
–
1,961.9
During the year, RELX PLC repurchased 33.5m (2018: 26.9m; 2017: 23.1m) RELX PLC ordinary shares for an average price of 1,789p;
these shares are held in treasury. The total consideration for the RELX PLC repurchases was £600m (2018: £700m, including
consideration for 17.5m shares purchased by RELX NV prior to the corporate simplification).
In 2018, as a result of the corporate simplification, RELX NV shares were cancelled and replaced with RELX PLC shares. This amounted
to 930,780,110 RELX NV shares being cancelled and the same number of RELX PLC shares issued in exchange.
The Employee Benefit Trust purchases RELX PLC 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 2.2m
shares for a total cost of £37m (2018: £43m; 2017: £39m). At 31 December 2019, shares held by the Employee Benefit Trust were £94m
(2018: £90m; 2017: £82m) at cost.
The issue of ordinary shares in the year relates to the exercise of share options.
All of the RELX PLC ordinary shares rank equally with respect to voting rights and rights to receive dividends, except for shares held in
treasury, which do not attract voting or dividend rights. There are no restrictions on the rights to transfer shares.
At 31 December 2019, RELX PLC shares held in treasury related to 6,753,010 (2018: 7,130,366; 2017: 3,493,817) RELX PLC ordinary shares
held by the Employee Benefit Trust; and 42,267,027 (2018: 42,023,020; 2017: 60,077,786) RELX PLC ordinary shares held by the parent
company. During December 2019, 33.3m (2018: 45m) RELX PLC ordinary shares held in treasury were cancelled.
On 6 December 2019, RELX PLC announced a non-discretionary programme to repurchase further ordinary shares up to the value of
£100m. At 31 December 2019, an accrual of £100m was recognised in respect of this non-discretionary commitment. A further 5.0m
RELX PLC ordinary shares have been repurchased in January and February 2020 under this programme.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 168
Notes to the consolidated financial statements
for the year ended 31 December 2019
25 Other reserves
At start of year
Profit attributable to RELX PLC shareholders
Dividends paid
Actuarial 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)
Issue of ordinary shares, net of expenses
Bonus issue of ordinary share
Cancellation of bonus share
Cancellation of shares
Settlement of share awards
Put option
Disposal of non-controlling interests
Exchange translation differences
At end of year
Hedge
reserve
2019
£m
(36)
–
–
–
16
35
(8)
–
–
–
–
–
–
–
–
–
7
Other
reserves
2019
£m
1,020
1,505
(842)
(137)
–
–
23
33
–
(4,000)
4,000
(499)
(33)
(103)
5
–
972
Total
2019
£m
984
1,505
(842)
(137)
16
35
15
33
–
(4,000)
4,000
(499)
(33)
(103)
5
–
979
Total
2018
£m
425
1,422
(796)
(91)
(59)
17
24
35
(227)
–
–
262
(35)
–
–
7
984
Other reserves principally comprise retained earnings and the share based remuneration reserve.
26 Related party transactions
Transactions between RELX PLC and subsidiaries 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 £4m (2018:
£3m; 2017: £16m) and the rendering and receiving of goods and services of £0.1m (2018: £0.1m; 2017: £0.1m). As at 31 December 2019,
amounts owed by joint ventures were £5m (2018: £2m; 2017: £2m) and amounts due to joint ventures were £0.5m (2018: £0.9m;
2017: £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. Key management personnel remuneration is set out below. For reporting purposes, salary,
benefits and annual incentive payments are considered short-term employee benefits.
KEY MANAGEMENT PERSONNEL REMUNERATION
Salaries, other short-term employee benefits and non-executive fees
Post-employment benefits
Share based remuneration*
Total
2019
£m
7
1
7
15
2018
£m
7
1
7
15
2017
£m
5
1
8
14
EXECUTIVE DIRECTORS
Total Executive Directors
Salary
£’000
1,984
1,935
1,889
Benefits
£’000
101
99
101
2019
2018
2017
Annual
incentive
£’000
3,038
3,033
1,964
Cost of share
based
remuneration*
£’000
7,343
7,003
8,205
Cost of
pension
provision*
£’000
725
741
983
Total
£’000
13,191
12,811
13,142
* The figures for share based awards 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. Please see page 99 for further details. 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.
RELX Annual report and financial statements 2019 | Financial statements and other information 169
26 Related party transactions (continued)
NON-EXECUTIVE DIRECTORS
Fees and benefits
2019
£’000
1,569
2018
£’000
1,634
2017
£’000
1,396
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. No deemed benefits were provided during 2019 to former Directors (2018: nil; 2017: £2,460).
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 2019 were nil (2018: nil; 2017: £2,804,358).
27 Exchange rates
The following exchange rates have been applied in preparing the consolidated financial statements:
Euro to sterling
US dollar to sterling
Income statement
2019
1.14
1.28
2018
1.13
1.34
2017
1.14
1.29
Statement of
financial position
2019
1.18
1.33
2018
1.11
1.27
28 Approval of financial statements
The consolidated financial statements were approved and authorised for issue by the Board of Directors on 12 February 2020.
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview
170
Notes to the consolidated financial statements
for the year ended 31 December 2019
29 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
Elsevier (Australia) Pty Ltd
Fair Events Pty Ltd (49%)
Fitness Show Pty Ltd
Reed Business Information (Australia) Pty Ltd
Reed Exhibitions Australia Pty Ltd
Reed International Books Australia Pty Ltd
Reed Oz Comic-Con Pty Ltd
RELX Australia Pty Ltd
Symbiotic Technologies Operation Pty Ltd
ThreatMetrix 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
F4F Europe NV/SA
LexisNexis BVBA
Share
class
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Ordinary
Ordinary
Brazil
Elsevier Editora Ltda
Fircosoft Brasil Consultoria e Servicos de Informatica Ltda Ordinary
LexisNexis Informações e Sistemas Empresariais Ltda
LexisNexis Serviços de Análise de Risco Ltda
MLex Brasil Midia Mercadologica Ltda (91%)
Reed Exhibitions Alcântara Machado Ltda
SST Software do Brasil Ltda
Quotas shares
Quotas shares
Quotas
Quotas shares
Ordinary
Quotas
Canada
LexisNexis Canada Inc
RELX Canada Ltd
Science-Metrix Inc
ThreatMetrix (Canada) Inc
Class B Voting
Common shares
Common shares
Common shares
China
Registered Capital
Beijing Bakery China Exhibitions Co., Ltd (25%)
Beijing Medtime Elsevier Education Technology Co., Ltd (49%) Registered Capital
Registered Capital
C-One Energy (Guangzhou) Co., Ltd
Registered Capital
Genilex Information Technology Co., Ltd
Registered Capital
ICIS Consulting (Beijing) Co., Ltd
Registered Capital
KeAi Communications Co., Ltd (49%)
Registered Capital
LexisNexis Risk Solutions (Shanghai) Information
Technologies Co., Ltd
Mack Brooks (Shanghai) Ltd
Reed Business Information (Shanghai) Co Ltd
Reed Elsevier Information Technology (Beijing) Co., Ltd
Reed Exhibitions (China) Co., Ltd
Reed Exhibitions Hengjin Co., Ltd (51%)
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 Datong Medical Information Technology Co., Ltd
Shanghai SinoReal Exhibitions Co., Ltd (27.5%)
Registered Capital
Registered Captial
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Reg
office
AUS3
AUS2
AUS4
AUS1
AUS3
AUS3
AUS3
AUS3
AUS5
AUS5
AUT1
AUT2
AUT2
AUT1
AUT3
AUT1
AUT3
AUT3
BEL2
BEL1
BRA1
BRA2
BRA6
BRA3
BRA4
BRA3
BRA5
CAN1
CAN3
CAN4
CAN2
CHN1
CHN2
CHN5
CHN6
CHN7
CHN8
CHN9
CHN18
CHN17
CHN3
CHN4
CHN16
CHN13
CHN11
CHN4
CHN12
CHN4
CHN10
CHN4
CHN12
CHN14
CHN15
Company name
Colombia
LexisNexis Risk Solutions S.A.S.
Denmark
Elsevier A/S
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 (83%)
GIE Juris Data
GIE PRK - Publicite Robert Krier
LexisNexis Business Information Solutions SA
LexisNexis Business Information Solutions Holding SA
LexisNexis International Development & Services SAS
LexisNexis SA
Reed Exhibitions ISG SARL
Reed Expositions France SAS
Reed Midem SAS
Reed Organisation SAS
RELX France SA
RELX France Services SAS
SAFI SA (50%)
Germany
Aries GmbH & Co KG
Aries Medical Knowledge Verwaltungsgesellschaft mbH
Elsevier GmbH
Elsevier Information Systems GmbH
LexisNexis GmbH
PatentSight GmbH
Reed Exhibitions (Germany) GmbH
Reed Exhibitions Deutschland GmbH
RELX Deutschland GmbH
Tschach Solutions GmbH
Greece
Mack Brooks Hellas SA
Hong Kong
Ascend China Holding Ltd
JC Exhibition and Promotion Ltd (65%)
JYLN Sager Ltd
Mlex Asia Ltd (91%)
Reed Business Information (China) Ltd
Reed Exhibitions Ltd
RELX (Greater China) Ltd
India
Chemprotech India Expo Pvt Ltd (25%)
Chemspec India Expo Pvt Ltd (50%)
FircoSoft India Private Ltd
Next Events Pvt Ltd
Parity Computing India Pvt Ltd
Reed Elsevier Publishing (India) Pvt Ltd
Reed Manch Exhibitions Private Ltd (70%)
Reed Triune Exhibitions Private Ltd (72%)
RELX India Private Ltd
Share
class
Ordinary
Reg
office
COL1
Ordinary
DNK1
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
Registered capital
Ordinary
Registered capital
Ordinary
Registered capital
Registered capital
Ordinary
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
UAE1
UAE2
EGY1
FRA1
FRA1
FRA2
FRA8
FRA3
FRA3
FRA4
FRA3
FRA5
FRA3
FRA3
FRA6
FRA4
FRA6
FRA4
FRA6
FRA8
FRA7
DEU2
DEU2
DEU4
DEU3
DEU5
DEU7
DEU5
DEU1
DEU1
DEU6
GRE1
HNK1
HNK1
HNK3
HNK5
HNK2
HNK1
HNK4
IND7
IND7
IND2
IND4
IND5
IND3
IND4
IND6
IND1
RELX Annual report and financial statements 2019 | Financial statements and other information 29 Related undertakings (continued)
Company name
Indonesia
PT Reed Exhibitions Indonesia (70%)
PT Reed Panorama Exhibitions (50%)
Ireland
Elsevier Services Ireland Ltd
LexisNexis Risk Solutions (Europe) Ltd
LexisNexis Risk Solutions (Ireland) Ltd
3D4Medical Ltd
3D4Medical Support Services Ltd
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
PatentSight Japan Inc
Reed Exhibitions Japan KK
Reed ISG Japan KK
ThreatMetrix GK
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%)
Malaysia
LexisNexis Malaysia Sdn Bhd
Reed Exhibitions 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
Share
class
Class A
Class B
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Common Stock
Common Shares
Ordinary
Ordinary
Membership Interest
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Reg
office
IDN2
IDN1
IRL2
IRL1
IRL1
IRL3
IRL3
ISR1
ITA1
ITA2
ITA1
ITA1
JPN1
JPN2
JPN3
JPN6
JPN4
JPN5
JPN7
KOR1
KOR2
KOR3
KOR4
KOR3
MYS1
MYS1
MEX1
MEX1
Ordinary
MAR1
Ordinary
NZL1
Philippines
Reed Elsevier Shared Services (Philippines) Inc.
Common Shares
PHL1
Poland
AI Digital Contracts Sp. z.o.o. (75%)
Elsevier Sp. z.o.o.
Russia
Ecwatech Company OOO
Elsevier OOO
LexisNexis OOO
Real Estate Events Direct OOO (80%)
RELX OOO
3D4Medical OOO
Saudi Arabia
Reed Sunaidi Exhibitions LLC(50%)
Ordinary
Ordinary
Ordinary
Participation Shares
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
POL1
POL2
RUS1
RUS1
RUS1
RUS2
RUS1
RUS3
SAU1
Company name
Singapore
Elsevier (Singapore) Pte Ltd
Lexis-Nexis Philippines Pte Ltd (75%)
Mack Brooks Asia Pte Ltd
Reed Business Information Pte Ltd
RE (HAPL) Pte Ltd
RELX (Singapore) Pte. Ltd
ThreatMetrix Pte Ltd
South Africa
Fircosoft South Africa (Pty) Ltd
Globalrange SA (Pty) Ltd
Korbitec (Pty) Ltd (78%)
LegalPerfectTSoftware Solutions (Pty) Ltd (78%)
LexisNexis (Pty) Ltd (78%)
LexisNexis Academic (Pty) Ltd (78%)
LexisNexis Risk Management (Pty) Ltd (78%)
Property Payment Exchange (SA) (Pty) Ltd (78%)
RELX (Pty) Ltd
Reed Exhibitions (Pty) Ltd (90%)
Reed Events Management (Pty) Ltd (90%)
Reed Exhibitions Group(Pty) Ltd (90%)
Reed Venue Management (Pty) Ltd (90%)
Winsearch Services (Pty) Ltd (78%)
Spain
Elsevier Espana SL
Switzerland
Elsevier Finance SA
Fircosoft Schweiz GmbH
RELX Risks SA
RELX Swiss Holdings SA
Taiwan
Elsevier Taiwan LLC
Thailand
MackBrooks Exhibitions Asia Ltd (49%)
Reed Tradex Company Ltd (49%)
RELX Holding (Thailand) Co., Ltd
RELX Information Analytics (Thailand) Co., Ltd
The Netherlands
AGRM Solutions C.V.
Elsevier B.V.
Elsevier Employment Services B.V.
ICIS Benchmarking Europe B.V
LexisNexis Business Information Solutions B.V.
LexisNexis Univentio B.V.
Misset Uitgeverij B.V.(49%)
One Business B.V. (33%)
Reed Business B.V.
RELX Finance B.V.
RELX Holdings B.V.
RELX Nederland B.V.
RELX Overseas B.V.
ThreatMetrix BV
Turkey
Elsevier STM Bilgi Hizmetleri Limited Şirketi
Mack Brooks Fuarcilik A.S
Reed Tüyap Fuarcilik A.Ș.(50%)
171
Reg
office
SGP1
SGP2
SGP5
SGP3
SGP1
SGP2
SGP4
ZAF1
ZAF2
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
ZAF3
Share
class
Ordinary
Ordinary B
Preference shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
A-shares
Ordinary
Ordinary
A-shares
Ordinary
Participations
ESP1
Ordinary
Ordinary
Ordinary
Ordinary
CHE1
CHE2
CHE1
CHE1
Ordinary
TWN1
Ordinary
Ordinary
Ordinary
Ordinary
Partnership Interest
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Registered Capital
Ordinary
Ordinary
Ordinary
Ordinary
RE Shares
Ordinary
Ordinary
Registered Capital
A Ordinary
B Ordinary
THA3
THA1
THA2
THA4
NLD1
NLD1
NLD1
NLD1
NLD1
NLD2
NLD4
NLD5
NLD1
NLD1
NLD1
NLD1
NLD1
NLD3
TUR1
TUR 3
TUR2
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 172
Notes to the consolidated financial statements
for the year ended 31 December 2019
29 Related undertakings (continued)
Company name
United Kingdom
Adaptris Group Ltd
Bradfield Brett Holdings Ltd
Butterworths Ltd
Cordery Ltd (71%)
Cordery Compliance Ltd (71%)
Crediva Ltd
Dew Events Ltd
Digital Foundry Network (50%)
Drayton Legal Recoveries Ltd
E & P Events LLP (50%)
Elsevier Ltd
Elsevier Life Sciences IP Ltd
Fastener Fairs Ltd
Formpart (EPS) Ltd
Formpart (HPL) Ltd
Gamer Edition Ltd
Gamer Events Ltd
Gamer Network Ltd
Imbibe Media Ltd
Information Handling Ltd (85%)
Insurance Initiatives Ltd
Knowable Ltd (75%)
Knowable Holdings Ltd (75%)
Legend Exhibitions Ltd
LexisNexis Risk Solutions UK Ltd
Mack Brooks Events Ltd
Mack-Brooks Exhibitions Ltd
Mack Brooks (France) Ltd
Mack-Brooks Publishing Ltd
Mack Brook Speciality Publishing Ltd
MCM Central Ltd
MCM Expo Ltd
Mendeley Ltd
MLex Ltd
Newsflo Ltd
NLife Ltd (23.5%)
Offshore Europe (Management) Ltd
Offshore Europe Partnership (50%)
Out There Gaming Ltd (70%)
Oxford Spires Management Co; Ltd (55%)
Prean Holdings Ltd
RE Directors (No.1) Limited
RE Directors (No.2) Limited
RE (RCB) Ltd
RE Secretaries Ltd
RE (SOE) Ltd
Reed Business Information Ltd
Reed Business Information (Holdings) Ltd
Reed Elsevier (UIG) Ltd
Reed Events Ltd
Reed Exhibitions Ltd
Reed Nominees Ltd
Reed Publishing Corporation Ltd
RELX (Holdings) Ltd
RELX (Investments) plc
RELX (UK) Ltd
RELX Finance Ltd
RELX Group plc
RELX Overseas Holdings Ltd
REV Venture Partners Ltd
Symbiotic Technologies Operations Ltd
Tracesmart Ltd
Whitehall Debenture Company Limited
Wunelli Ltd
Share
class
Company name
United States
Common Stock
Accuity Inc.
Common Stock
Accuity Asset Verification Services Inc.
American Textile Machinery Exhibitions International Inc. (40%) Common Stock
Common Stock
Aries Systems Corporation
Common Stock
Derman, Inc.
Partnership Interest
Dunlap-Hanna Publishers (50%)
Common Stock
Elsevier Holdings Inc.
Common Stock
Elsevier Inc.
Membership Interest
Elsevier Medical Information LLC
Common Stock
Elsevier STM Inc.
Common Stock
Enclarity, Inc.
Membership Interest
ExitCare LLC
Common Stock
Gamer Network Inc.
Membership Interest
Gaming Business Asia LLC (50%)
Common Stock
Health Market Science, Inc.
Membership Interest
IDG-RBI China Publishers LLC (50%)
Common Stock
Intelligize, Inc.
Common Stock
Knovel Corporation
Common Stock
Knowable Inc (75%)
Common Stock
LexisNexis Claims Solutions Inc.
Common Stock
LexisNexis Coplogic Solutions Inc.
Common Stock
LexisNexis of Puerto Rico Inc.
Common Stock
LexisNexis Risk Assets Inc.
Common Stock
LexisNexis Risk Data Management Inc.
Common Stock
LexisNexis Risk Holdings Inc.
Common Stock
LexisNexis Risk Solutions Inc .
Common Stock
LexisNexis Risk Solutions FL Inc.
Common Stock
LexisNexis Special Services Inc.
Common Stock
LexisNexis VitalChek Network Inc.
Common Stock
Mack Brooks Exhibitions Inc.
Common Stock
Matthew Bender & Company, Inc.
Common Stock
MLex US, Inc. (91%)
Common Stock
Parity Computing, Inc.
No Stock
PCLaw Time Matters LLC (51%)
Membership Interest
PoliceReports.US, LLC
Common Stock
Portfolio Media, Inc.
Common Stock
Reed Business Information Inc.
Common Stock
Reed Technology and Information Services Inc.
Common Stock
RELX Capital Inc.
Common Stock
RELX Inc.
Common Stock
RELX Risks Inc.
Common Stock
RELX US Holdings Inc.
Common Stock
Reman, Inc.
No Stock
REV IV Partnership LP
Membership Interest
SAFI Americas LLC (50%)
Partnership Interest
The Reed Elsevier Ventures 2005 Partnership LP
Partnership Interest
The Reed Elsevier Ventures 2006 Partnership LP
Partnership Interest
The Reed Elsevier Ventures 2009 Partnership LP
Partnership Interest
The Reed Elsevier Ventures 2010 Partnership LP
Partnership Interest
The Reed Elsevier Ventures 2011 Partnership LP
Partnership Interest
The Reed Elsevier Ventures 2012 Partnership LP
Partnership Interest
The Reed Elsevier Ventures 2013 Partnership LP
Partnership Interest
The Remick Publishers (50%)
Common Stock
ThreatMetrix, Inc.
Common Stock
World Compliance, Inc.
Membership I nterest
3D4Medical.com, LLC
Common Stock
3D4Medical Inc.
Reg
office
USA1
USA1
USA3
USA3
USA4
USA7
USA3
USA3
USA3
USA3
USA2
USA3
USA3
USA3
USA2
USA3
USA3
USA3
USA8
USA2
USA2
USA9
USA2
USA2
USA2
USA2
USA2
USA6
USA2
USA3
USA3
USA3
USA3
USA2
USA2
USA3
USA5
USA3
USA4
USA3
USA2
USA3
USA3
USA4
USA3
USA4
USA4
USA4
USA4
USA4
USA4
USA4
USA7
USA2
USA4
USA10
USA10
Vietnam
Reed Tradex Vietnam LLC (49%)
Ordinary
VIE1
Share
class
Ordinary
7 1/2% Preferred
Income, Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
No Shares
Ordinary
Ordinary
Ordinary,
Ordinary-A,
Ordinary-B
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary, A Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Partnership Interest
Ordinary
Ordinary
Deferred, Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
‘R’ Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
A Ordinary
B Ordinary
Ordinary
Reg
office
GBR2
GBR1
GBR5
GBR5
GBR5
GBR6
GBR3
GBR3
GBR7
GBR3
GBR8
GBR8
GBR4
GBR1
GBR1
GBR3
GBR3
GBR3
GBR3
GBR1
GBR10
GBR1
GBR1
GBR13
GBR9
GBR3
GBR3
GBR3
GBR3
GBR3
GBR2
GBR2
GBR7
GBR4
GBR1
GBR12
GBR3
GBR3
GBR3
GBR10
GBR1
GBR1
GBR1
GBR1
GBR1
GBR3
GBR2
GBR2
GBR1
GBR3
GBR3
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR1
GBR9
GBR5
GBR1
GBR11
RELX Annual report and financial statements 2019 | Financial statements and other information 173
29 Related undertakings (continued)
Registered offices
Australia
AUS1: Building B, Level 2, Unit 11, 1 Maitland Place, Baulkham Hills NSW 2153,Australia
AUS2: 383 Kent Street, Sydney NSW 2000, Australia
AUS3:
AUS4: 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
AUS5: 1303, 799 Pacific Highway, Chatswood, NSW 2067
Austria
AUT1: Messeplatz 1, 1020, Wien, Austria
AUT2: Marxergasse 25, 1030, Wien, Austria
AUT3: Am Messezentrum 6, 5020, Salzburg, Austria
Belgium
BEL1: Oudenaardseheerweg 129, 9810 Nazareth, Belgium
BEL2: Guldensporenpark 36D, 9820 Merelbeke, Belgium
Brazil
BRA1: Rua da Assembleia no 100, 6th Floor, RJ Centro, Rio de Janiero, 20011-904, Brazil
BRA2: Rua Bela Cintra 2305, São Paulo, 01415-009,Brazil
BRA3: Rua Bela Cintra no. 1200, 10th floor, Sâo Paulo, 01415-001, Brazil
BRA4: Avenida paulista, 2300-Piso Pilotis room 28, Sao Paulo, 01310-300,Brazil
BRA5: Rua Cel Fonseca, 203 A-Centro, Botucatu, SP, 18600-200,Brazil
BRA6: Rua Bela Cintra no. 1200, 5th floor, Sâo Paulo, 01415-002, Brazil
Canada
CAN1: 123 Commerce Valley Drive East, Suite 700, Markham, Ontario, L3T 7W8, Canada
CAN2: 177 King Street West, Suite 400, Toronto-Dominion Centre Toronto, Ontario, M5K
0A1, Canada
CAN3: 555 RIichmond Street West, Toronto, Ontario,M5V 3B1, Canada
CAN4: 26E-1501 av. McGill College, Montreal, Quebec, H3A 3N9, Canada
China
CHN1: Zhongkun Building, Room 612, Gaoliangqiaoxie Street, No. 59, Haidan District,
Beijing, 100044, China
65, rue Camille Desmoulins, 92130, Issy les Moulineaux, France
Registered offices
France
FRA1:
FRA2: Parc Euronord – 10, rue du Parc – 31150 Bruguieres
FRA3: 141 rue de Javel, 75015 Paris
FRA4: 52 Quai de Dion Bouton 92800 Puteaux
Immeuble « Technopolis », 350 rue Georges Besse –Nîmes (30000)
FRA5:
FRA6: 27-33 quai Alphonse Le Gallo, 92100, Boulogne-Billancourt, France
FRA7: 6-8 Rue Chaptal, 75009 Paris
FRA8: 151-155 Rue de Bercy, 75012 Paris, France
Germany
DEU1: Völklinger Strasse 4, 40219, Düsseldorf, Germany
Leichlinger Street 14,40764,Langenfeld,Germany
DEU2:
Theodor-Heuss-Allee 108, D-60488, Frankfurt am Main, Hesse, Germany
DEU3:
DEU4: Hackerbrücke 6, 80335, Munich, Germany
DEU5: Heerdter Sandberg 30, 40549, Düsseldorf, Germany
DEU6: Steinhäuserstrasse 9, 76135, Karlsruhe, Germany
DEU7: Joseph-Schumpeter-Allee 33, 53227, Bonn
Greece
GRE1: 188A, Filolaou Str.,Athens, 11632, Greece
Hong Kong
HNK1: 20/F Alexandra House, 18 Chater Road, Central, Hong Kong
HNK2: Level 54 Hopewell Center, 183 Queens Road East (Tricor Office), Hong Kong
HNK3: Flat 1506, 15/F, Lucky Center, No. 165-171 Wan Chai Road, Wan Chai, Hong Kong
HNK4:
HNK5:
11/F Oxford House, Taikoo Place, 979 King’s Road, Quarry Bay, Hong Kong
3901, 39th Floor Hopewell Center, 183 Queens Road East, Wanchai, Hong Kong
India
IND1:
IND2:
IND3:
818, 8th Floor, Indraprakash Builing, 21 Barakhamba Road, New Delhi, 110001,
India
S21 Vatika Centre, No 471 Anna Salai, Taynampet, Chennai, 600035, India
818, 8th Floor, Indraprakash Builing, 21 Barakhamba Road, New Delhi, 110001,
India
CHN2: West Building of Administration Building, Xueyuan Road No. 38 Peking University
IND4: Unit no 03,04,05 first floor, Southern Park D2 Saket, New Delhi, South Delhi ,110017,
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
IND5:
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: Unit 2480, Building 2, No. 7, Chuangxin Road, Science Park of Changping District,
Beijing, China
CHN6: Unit B1303-1 & 1305, 13F Center Plaza, 161 Linhe Road West, Tianhe District
Guangzhou, China
CHN7: 404 F4, No.9 Shangdi 9th Street, Haidian District, Beijing, 100085, China
CHN8: Room 5106, Raffle City, 268 Middle Xizang Road, Huangpu District, Shanghai,
200001, China
CHN9: Room A 100 of Room 0307, Floor 3, Building 3, 7 Middle Dongsanhuan road,
Chaoyang District, Beijing
CHN10: Intercontinental Center, 42F, 100 Yutong Road, Zhabei District, Shanghai, 200070,
China
CHN11: Shenzhen International Chamber of Commerce Tower, Room 1801-1802, 1805,
Fuhua 3rd Road, Futian District, Shenzhen, 518048, China
CHN12: Room 319, 238 Jiangchangsan Road, Jing’an District, Shanghai, China
CHN13: Room 304, Sanlian Building, No.8, Huajing Road, Pudong District, Shanghai,
200070, China
CHN14: Building 2, Room No. 3895, Changjiang Avenue, No. 161, Changliang Farm,
Chongming County, Shanghai Municipality
CHN15: FL2, No.979, Yunhan Road, Nicheng Town, Pudong New Area
CHN16: Floor 2, No.979, Yunhan Road, Nicheng Town, Pudong New Area, Shanghai
4/F Block C, No 999 Jingzhong Road, Changning District, Shanghai, China
CHN17:
Room Jia301-22, No15, Lane152, Yanchang Road, Shanghai, China
CHN18:
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
Dubai, UAE
UAE1: Office G-49, Building No 9, Dubai Media City, Post 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
India
99/100, Prestige Towers Unit No. 505, Fifth Floor, Residency Road, Bangalore ,
Karnataka, 560025, India
IND6: #25, 3rd floor, 8th Main Road, Vasanthnager, Bangalore, 560052, India
IND7: B-602, Godrej coliseum, K. J. Hospital Road, Sion (E), Mumbai, 400 022, India
Indonesia
IDN1:
IDN2: Menara Citicon Level 8. Unit 8011 & 8012 Jl. Letjen S. Parman No. 8 Kav 72 Slipi
Panorama Building, 5th Floor, Jalan Tomang Raya No. 63, Jakarta, 11440, Indonesia
Palmerah Jakarta Barat 11410 Indonesia
Ireland
IRL1:
IRL2:
IRL3:
80 Harcourt Street, Dublin 2, Ireland
Suite 4320, Atlantic Avenue, Westpark Business Campus, Shannon, Clare, Ireland
1st Floor The Grange Stillorgan Road, Blackrock, Co Dublin, Ireland
Israel
ISR1: Meitar, attorneys at Law, 16 Abba Hillel Road, Ramat Gan, 5250608, Israel
Italy
ITA1:
ITA2:
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:
JPN6:
JPN7:
13-12 Rokubancho, Chiyoda-ku, Tokyo, Japan
7F Cross Office Uchisaiwaicho, 1-18-6 Nishi-Shinbashi, Minato-ku, Tokyo
2-6, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo
1-9-15, Higashi Azabu, Minato-ku Tokyo Japan
Korea (South)
KOR1: Chunwoo Building, 4th floor, 534 Itaewon-dong, Yongsan-gu, Seoel, 140-861,
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
RELX Annual report and financial statements 2019 | Notes to the consolidated financial statementsMarket segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 174
Notes to the consolidated financial statements
for the year ended 31 December 2019
29 Related undertakings (continued)
Registered offices
Malaysia
MYS1: 6th Floor, Akademi Etiqa, No. 23 Jalan Melaka, 50100 Kuala Lumpur, Malaysia
Registered offices
Thailand
THA1: Sathorn Nakorn Building, Floor 32, No. 100/68-69 North Sathon Road, Silom,
Mexico
MEX1:
Insurgentes Sur # 1388 Piso 8, Col. Actipan, Deleg. Benito Juarez, C.P. 03230 Ciudad
de México, México
Morocco
MAR1: 104 bis, Boulevard Abdelmoumen, 4 eme etage, 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:
POL2:
Russia
RUS1:
RUS2:
RUS3:
Sw. Antoniego 2/4 50-073, Wrocław,Poland
Natpoll Building, ul. Migdalowa 4/59, 02-796, Warsaw, Poland
2-y Syromyatnichesky per.1, Delta Plaza business center, 105120, Moscow, Russian
Federation
Petrozavodskaya street 28/4, Building VI, room 2, 125475, Moscow, Russian
Federation
Krasnykh Partizan st. 152, Office 505, 350049, Krasnodar, Russian Federation
Saudi Arabia
SAU1: Al Fadl Commercial Center, Jeddah, 21411, Saudi Arabia
Singapore
SGP1:
SGP2: 80 Robinson Road, #02-00, Singapore, 068898, Singapore
SGP3: 1 Changi Business Park Crescent, #06-01 Plaza 8 & CBP, Singapore, 48602551,
3 Killiney Road, #08-01 Winsland House 1, Singapore, 239119, Singapore
SGP4:
SGP5:
Singapore
8 Robinson Road #03-00 ASO Building Singapore 048544
120 Lower Delta Road #12-02, Cendex Centre, Singapore, 169208
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
Spain
ESP1: C/ Josep Tarradellas 20-30, 1º / 20029, Barcelona, Spain
Switzerland
CHE1: Espace de L’Europe 3, 2002 Neuchatel, Switzerland
CHE2: Regus Brooklyn Bridge, 3rd Floor Steven House Brooklyn, 570 Fehrsen Street,
0181, Brooklyn, Pretoria, Switzerland
Taiwan
TWN1: Rm N818, 8F, Chia Hsin Building II, No.9 , Lane 3, Minsheng West Road, Taipei
10449, Taiwan
Bangrak, Bangkok, 10500, Thailand
THA2: 14th Floor, CTI Tower, 191/70-73 Ratchadapisek Road, Khwaeng Klongtoey, Khet,
THA3:
THA4:
Klongtoey, Bangkok, Thailand
140/36, New ITF Tower, 17th Floor, Silom Road, Bangrak 10500, Bangkok, Thailand
2 Ploenchit Centre, Room 7, Floor G., Sukhumvit Road, Klongtoey, Bangkok, 10110,
Thailand
The Netherlands
NLD1: Radarweg 29, 1043 NX Amsterdam, Netherlands
NLD2: Galileiweg 8, 2333 BD Leiden, Netherlands
NLD3: Evert van de Beekstraat 1 The Base 3 / F, 1118CL Schiphol
NLD4: Prins Hendrikstraat 17, 7001GK Doetinchem
NLD5: Spaklerweg 53, 1114 AE Amsterdam-Duivendrecht
Turkey
TUR1: Maslak Mah. Bilim Sokak Sun Plaza Kat:13 Şişli-Maslak, Istanbul, Turkey
TUR2: E - 5 Karayolu Üzeri, Gürpınar Kavşağı 34500, Büyükçekmece ,Istanbul, 34500,
Turkey
TUR3: Fulya Mah. Hakkı Yeten Cad. No:10/C, Selenium Plaza Kat:5,6 Fulya, Beşiktaş
İstanbul, Turkey
United Kingdom
GBR1: 1-3 Strand, London, WC2N 5JR, United Kingdom
GBR2: Quadrant House, The Quadrant, Sutton, Surrey, SM2 5AS, United Kingdom
GBR3: Gateway House 28 The Quadrant, Richmond, Surrey, TW9 1DN, United Kingdom
GBR4: Lexis House, 30 Farringdon Street, London, EC4A 4HH, United Kingdom
GBR5: Global Reach, Dunleavy Drive, Cardiff, CF11 0SN, United Kingdom
GBR6: The Eye, 1 Procter Street, London, WC1V 6EU, United Kingdom
GBR7: The Boulevard, Langford Lane, Kidlington, Oxford, OX5 1GB, United Kingdom
GBR8: 35 – 37 St. Marys Gate, Nottingham, United Kingdom, NG1 1PU
GBR9: 1st Floor 80 Moorbridge Road, Maidenhead, Berkshire, SL6 8BW
GBR10: 40 Kimbolton Road, Bedford, England, MK40 2NR
GBR11: 1000 Lakeside, Western Road, Portsmouth, PO6 3EN, United Kingdom
GBR12: 5 Oakwood Drive, Loughborough, England, LE11 3QF
GBR13: 28 The Quadrant, Richmond, Surrey, England, TW9 1DN
1007 Church Street, Evanston IL 60201
United States
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: 313 Washington Street, Suite 400, Newton, MA 02458
USA8: 1209 Orange Street, Wilmington, DE 19801
USA9:
USA10:
9443 Springboro Pike, Miamisburg, OH 45342
15633 Rising River PL N, San Diego, CA 92127-5100
Vietnam
VIE1:
2nd Floor, Kova Center, 92G-92H Nguyen Huu Canh Street, Ward no. 22, District.
Binh Thanh, Ho Chi Minh City, Vietnam
RELX Annual report and financial statements 2019 | Financial statements and other information 5 year summary
175
RELX consolidated financial information
Revenue
Reported operating profit
Adjusted operating profit
Reported net profit attributable to RELX PLC shareholders
Adjusted net profit attributable to RELX PLC shareholders
RELX PLC financial information
Reported earnings per ordinary share (pence)
Adjusted earnings per ordinary share (pence)
Dividend per ordinary share (pence)
Note
2019
£m
2018
£m
7,874
2,101
2,491
1,505
1,808
77.4p
93.0p
45.7p
7,492
1,964
2,346
1,422
1,674
71.9p
84.7p
42.1p
1
1
2
2017
£m
7,341
1,905
2,284
1,648
1,620
81.6p
80.2p
39.4p
2016
£m
6,889
1,708
2,114
1,150
1,473
55.8p
71.4p
35.95p
2015
£m
5,971
1,497
1,822
1,008
1,275
46.4p
60.5p
29.7p
(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 184. Adjusted measures are stated before amortisation of acquired intangible assets, the net financing cost on defined benefit
pension schemes and acquisition-related costs, exceptional tax credits 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.
RELX Annual report and financial statements 2019Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 176
RELX Annual report and financial statements 2019 | Financial statements and other information
RELX Annual report and financial statements 2019
177177
RELX PLC
Annual Report and
Financial Statements
In this section
178 RELX PLC statement of financial position
179 RELX PLC statement of changes in equity
179 RELX PLC accounting policies
180 Notes to the RELX PLC financial statements
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Financial statements and other information
178
RELX PLC statement of financial position
AS AT 31 DECEMBER
Non-current assets
Investments in subsidiary undertakings
Investments in joint ventures
Current assets
Cash and cash equivalents
Trade and other receivables
Receivables: amounts due from subsidiary undertakings
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
Merger reserve
Net profit
Reserves
Shareholders’ equity
Note
1
1
2019
£m
2018
£m
18,318
–
18,318
–
–
1,662
19,980
–
102
102
18,314
–
18,314
1
1
1,536
19,852
4
109
113
19,878
19,739
286
1,443
(739)
36
168
11,150
1,548
5,986
19,878
290
1,415
(643)
31
164
15,150
2,063
1,269
19,739
The RELX PLC Company financial statements were approved by the Board of Directors and authorised for issue on 12 February 2020.
They were signed on its behalf by:
A J Habgood
Chair
N L Luff
Chief Financial Officer
RELX Annual report and financial statements 2019 | Financial statements and other information RELX Annual report and financial statements 2019
179
RELX PLC statement of changes in equity
Balance at 1 January 2018
Total comprehensive income for the year
Dividends paid (4)
Repurchase of ordinary shares
Cancellation of shares
Issue of ordinary shares, net of expenses
Issue of ordinary shares in exchange for RELX NV shares
Equity instruments granted to employees of the Group
Transfer of net profit to reserves
Balance at 1 January 2019
Total comprehensive income for the year
Dividends paid (4)
Repurchase of ordinary shares
Cancellation of shares
Bonus issue of ordinary share
Cancellation of bonus share
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 2019
Share
capital
£m
162
–
–
–
(6)
–
134
–
–
290
–
–
–
(5)
4,000
(4,000)
1
–
–
286
Share
premium
£m
1,309
–
–
–
–
13
93
–
–
1,415
–
–
–
–
–
–
28
–
–
1,443
Shares
held in
treasury
£m
(753)
–
–
(472)
582
–
–
–
–
(643)
–
–
(600)
504
–
–
–
–
–
(739)
Capital
redemption
reserve(1)
Other
reserves(2)
£m
25
–
–
–
6
–
–
–
–
31
–
–
–
5
–
–
–
–
–
36
£m
160
–
–
–
–
–
–
4
–
164
–
–
–
–
–
–
–
4
–
168
Merger
reserve(1)
£m
–
–
–
–
–
–
15,150
–
–
Net
profit
£m
817
2,063
–
–
–
–
–
–
(817)
15,150 2,063
– 1,548
–
–
–
–
–
–
–
(4,000)
–
–
–
–
–
–
– (2,063)
11,150 1,548
Reserves(3)
Total
£m
£m
3,174
1,454
2,063
–
(420)
(420)
(472)
–
–
(582)
13
–
– 15,377
4
–
–
817
1,269 19,739
– 1,548
(842)
(842)
(600)
–
–
(504)
–
–
–
4,000
29
–
4
–
2,063
–
5,986 19,878
(1) The capital redemption and merger reserve do 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 2019 were £6,795m (2018: £2,689m) comprising net profit and reserves, net of shares held in treasury.
(4) Refer to note 13 of the RELX consolidated financial statements on page 150 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 128 to 175, which are also presented as the
RELX PLC consolidated financial statements. See the Basis of
preparation of the consolidated financial statements on page 133.
The RELX PLC financial statements are prepared on a going
concern basis, as explained on page 83.
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 24 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 9 on pages 145 to 148 of the consolidated financial
statements for the taxation accounting policies.
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 180
Notes to the RELX PLC financial statements
1 Investments
At 1 January 2018
Acquisition of interest in RELX Group plc not already owned
Equity instruments granted to employees of the Group
At 1 January 2019
Equity instruments granted to employees of the Group
At 31 December 2019
Subsidiary
undertaking
£m
–
18,310
4
18,314
4
18,318
Joint
venture
£m
3,027
(3,027)
–
–
–
–
Total
£m
3,027
15,283
4
18,314
4
18,318
The acquisition of the remaining RELX Group plc interest in 2018 relates to the transfer of RELX NV’s previously held interest in RELX
Group plc as a result of the corporate simplification. Following the simplification, RELX Group plc is recognised as a 100% owned
subsidiary of RELX PLC.
2 Related party transactions
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
26 of the Group consolidated financial statements and details of the Directors’ remuneration are included in the Directors’
Remuneration Report on pages 88 to 111.
3 Contingent liabilities
There are contingent liabilities in respect of borrowings of subsidiaries guaranteed by RELX PLC as follows:
Contingent liabilities
2019
£m
5,777
2018
£m
5,775
Financial instruments disclosures in respect of the borrowings covered by the above guarantees are given in note 18 of the Group’s
consolidated financial statements.
4 Bonus share issue
At the 2019 AGM shareholders approved the issue of a bonus share with £4bn nominal value. The share was subsequently cancelled via a
capital reduction, creating £4bn of distributable reserves in RELX PLC to replace the RELX NV reserves lost in the corporate simplification.
RELX Annual report and financial statements 2019 | Financial statements and other information RELX Annual report and financial statements 2019
181
Other financial
information
In this section
182 Summary financial information in euros
183 Summary financial information in US dollars
184 Reconciliation of adjusted to GAAP measures
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Financial statements and other information
182
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.
Income statement
Statement of
financial position
2019
1.14
2018
1.13
2017
1.14
2019
1.18
2018
1.11
2017
1.12
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 shareholders
Adjusted operating profit
Adjusted profit before tax
Adjusted net profit attributable to RELX PLC shareholders
Adjusted earnings per ordinary share
Basic earnings per ordinary share
Net dividend per ordinary RELX PLC share paid in the year
Net dividend per ordinary RELX PLC share paid and proposed in relation to the financial year
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
Increase/(decrease) in cash and cash equivalents
Movement in cash and cash equivalents
At start of year
Increase/(decrease) 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
2019
€m
8,976
2,395
2,106
1,716
2,840
2,508
2,061
€1.060
€0.883
€0.494
€0.521
2019
€m
2,381
(835)
(1,515)
31
127
31
5
163
2018
€m
8,466
2,219
1,944
1,607
2,651
2,424
1,892
€0.957
€0.813
€0.453
€0.476
2018
€m
2,243
(1,436)
(806)
1
124
1
2
127
2017
€m
8,369
2,172
1,962
1,879
2,604
2,395
1,847
€0.915
€0.930
€0.426
€0.449
2017
€m
2,182
(473)
(1,760)
(51)
190
(51)
(15)
124
2,738
2,535
2,505
2019
€m
13,386
2,885
–
16,271
7,018
6,669
–
13,687
2,584
2018
€m
12,928
2,609
1
15,538
5,906
7,010
4
12,920
2,618
2017
€m
11,673
2,475
–
14,148
5,224
6,333
–
11,557
2,591
RELX Annual report and financial statements 2019 | Financial statements and other information RELX Annual report and financial statements 2019
183
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.
Income statement
Statement of
financial position
2019
1.28
2018
1.34
2017
1.29
2019
1.33
2018
1.27
2017
1.35
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 shareholders
Adjusted operating profit
Adjusted profit before tax
Adjusted net profit attributable to RELX PLC shareholders
Adjusted earnings per American Depositary Share (ADS)
Basic earnings per ADS
Net dividend per RELX PLC ADS paid in the year
Net dividend per RELX PLC ADS paid and proposed in relation to the financial year
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
Increase/(decrease) in cash and cash equivalents
Movement in cash and cash equivalents
At start of year
Increase/(decrease) 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
2019
US$m
10,079
2,689
2,364
1,926
3,188
2,816
2,314
$1.191
$0.991
$0.554
$0.585
2019
US$m
2,674
(938)
(1,701)
35
145
35
4
184
2018
US$m
10,039
2,632
2,305
1,905
3,144
2,874
2,243
$1.134
$0.963
$0.537
$0.564
2018
US$m
2,660
(1,703)
(956)
1
150
1
(6)
145
2017
US$m
9,470
2,457
2,220
2,126
2,946
2,710
2,090
$1.035
$1.053
$0.482
$0.508
2017
US$m
2,469
(535)
(1,992)
(58)
199
(58)
9
150
3,075
3,006
2,834
2019
US$m
15,088
3,252
–
18,340
7,910
7,517
–
15,427
2,913
2018
US$m
14,792
2,986
1
17,779
6,758
8,020
5
14,783
2,996
2017
US$m
14,070
2,984
–
17,054
6,296
7,635
–
13,931
3,123
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 184
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 pension obligation and other
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 pension obligation and other
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 shareholders
Adjustments (post-tax):
Amortisation of acquired intangible assets
Acquisition-related costs
Net interest on net defined benefit pension obligation and other
Disposals and other non-operating items
Other deferred tax credits from intangible assets*
Exceptional tax credit**
Adjusted net profit attributable to RELX PLC shareholders
Cash generated from operations
Adjustments:
Dividends received from joint ventures
Purchases of property, plant and equipment
Proceeds from disposals of property, plant and equipment
Expenditure on internally developed intangible assets
Payments in relation to acquisition-related costs
Pension recovery payment
Repayment of lease principal
Sublease payments received
Adjusted cash flow
2019
£m
2,101
295
84
12
(1)
2,491
2018
£m
1,964
288
84
11
(1)
2,346
1,847
1,720
295
84
12
13
(51)
2,200
288
84
11
9
33
2,145
(338)
(292)
26
(15)
(12)
(3)
11
(57)
–
(388)
34
(13)
(11)
(2)
(14)
(55)
(112)
(465)
1,505
1,422
321
69
10
(40)
(57)
–
1,808
322
71
7
19
(55)
(112)
1,674
2,724
2,555
34
(47)
2
(333)
63
44
(86)
1
2,402
30
(56)
4
(306)
77
20
(82)
1
2,243
* Movements on deferred tax liabilities arising on acquired intangible assets that do not qualify for tax amortisation.
** In 2018 relates to the substantial resolution of certain prior year tax matters and deferred tax effect of tax rate reductions in the Netherlands and US.
RELX Annual report and financial statements 2019 | Financial statements and other information Shareholder information
185
In this section
186 Shareholder information
188 Shareholder information and contacts
IBC 2020 financial calendar
RELX Annual report and financial statements 2019 Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 186
Shareholder information
Annual Report and Financial Statements 2019
The Annual Report and Financial Statements for RELX PLC for
the year ended 31 December 2019 are available on the Group’s
website, and from the registered office of RELX PLC shown on
page 188. 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 Report
and Financial Statements are expressed in sterling, with summary
financial information expressed in euros and US dollars.
Share price information
RELX PLC’s ordinary shares are traded on the London
Stock Exchange.
Trading symbol
ISIN
PLC
REL
GB00B2B0DG97
RELX PLC’s ordinary shares are also traded on the Euronext
Amsterdam Stock Exchange.
Trading symbol
ISIN
PLC
REN
GB00B2B0DG97
The RELX PLC 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
The RELX PLC ordinary share price and the ADS price 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 registered
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 188.
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, the Company 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 Company 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 188.
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 188.
Dividend Reinvestment Plan
Shareholders can choose to reinvest their Company 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 188.
RELX Annual report and financial statements 2019 | Financial statements and other information RELX Annual report and financial statements 2019 | Shareholder information
187
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 their 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
Market segmentsGovernanceFinancial statements and other informationFinancial reviewCorporate ResponsibilityOverview 188
Shareholder information and contacts
Information for holders of ordinary shares
held through Euroclear Nederland
Shareholders with enquiries concerning RELX PLC ordinary
shares that are not held directly on the Register of Members and
are ultimately held through Nederlands Centraal Instituut voor
Giraal Effectenverkeer BV (Euroclear Nederland) should direct
their enquiries to the broker, financial intermediary, bank or other
financial institution that holds the shares on their behalf.
Dividend Reinvestment Plan
Shareholders can choose to reinvest their dividends by purchasing
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.
Information for ADR holders
ADR shareholder services
Enquiries concerning RELX PLC ADRs should be addressed
to the ADR Depositary, Citibank NA, at the address shown below.
Dividend payments on RELX PLC ADRs are converted into US
dollars by the ADR Depositary.
Annual Report on Form 20-F
The RELX 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.
Dividend currency elections
Shareholders appearing on the Register of Members or holding
their shares through CREST will continue to receive their
dividends in Pounds Sterling, but will have the option to elect to
receive their dividends in Euro. Euro payments will be made by
cheque only.
Shareholders who appear on the Register of Members and wish
to receive their dividend in Euro should contact our Registrar,
Equiniti on 0371 384 2960 (UK) or +44 (0) 121 415 0165 (from outside
the UK) for a dividend election form and further information
regarding the Euro dividend option. Alternatively, shareholders
can view and update their current dividend elections by registering
for a Shareview Portfolio at www.shareview.co.uk/register.
Shareholders who hold their shares through CREST and wish to
receive their dividend in Euro, must do so by following the CREST
Elections process.
Shareholders who hold RELX PLC shares through Euroclear
Nederland (via banks and brokers), will automatically receive their
dividends in Euro, but will have the option to elect to receive their
dividends in Pounds Sterling.
Shareholders who hold their shares through Euroclear Nederland
and wish to receive their dividends in Pounds Sterling should
contact their broker, financial intermediary, bank or other financial
institution that holds the shares on their behalf.
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 0165 (callers outside the UK)
Listing/paying agent for shares listed on Euronext Amsterdam
held through Euroclear Nederland
ABN AMRO Bank NV
Department Corporate Broking and Issuer Services HQ7212
Gustav Mahlerlaan 10
1082 PP Amsterdam
The Netherlands
Email: corporate.broking@nl.abnamro.com
www.securitiesinfo.com
RELX PLC 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)
RELX Annual report and financial statements 2019 | Financial statements and other information 2020 financial calendar
13 February Results announcement for the year ended 31 December 2019
23 April
23 April
24 April
27 April
13 May
18 May
28 May
2 June
23 July
30 July*
31 July*
Trading update issued in relation to the 2020 financial year
Annual General Meeting – Amba Hotel , Strand, London WC2N 5HX
Ex-dividend date – 2019 final dividend, ordinary shares and ADRs
Record date – 2019 final dividend, ordinary shares and ADRs
Dividend currency and DRIP election deadline
Euro dividend equivalent announcement
Payment date – 2019 final dividend, ordinary shares
Payment date – 2019 final dividend, ADRs
Interim results announcement for the six months to 30 June 2020
Ex-dividend date – 2020 interim dividend, ordinary shares and ADRs
Record date – 2020 interim dividend, ordinary shares and ADRs
* Please note that these dates are provisional and subject to change. The 2020 Interim Dividend payment dates in respect of ordinary shares and ADRs will be confirmed by the
Company in its 2020 Interim Results announcement, currently scheduled for release on 23 July 2020.
Dividend history
The following tables set out dividends paid (or proposed) in relation to the three financial years 2017–2019.
ORDINARY SHARES
Final dividend for 2019**
Interim dividend for 2019
Final dividend for 2018
Interim dividend for 2018
Final dividend for 2017
Interim dividend for 2017
**Proposed dividend, to be submitted for approval at the Annual General Meeting of RELX PLC in April 2020
ADRS
Final Dividend for 2019***
Interim Dividend for 2019
Final Dividend for 2018
Interim Dividend for 2018
Final dividend for 2017
Interim dividend for 2017
***Payment will be determined using the appropriate £/US$ exchange rate on 28 May 2020.
pence per PLC ordinary share
32.10
13.60
29.70
12.40
27.70
11.70
$ per PLC ADR
***
0.16398
0.37612
0.15914
0.37159
0.15085
Payment date
28 May 2020
2 September 2019
4 June 2019
24 August 2018
22 May 2018
25 August 2017
Payment date
2 June 2020
5 September 2019
7 June 2019
29 August 2018
25 May 2018
30 August 2017
Credits
Designed and produced by
Conran Design Group
Board photography by
Douglas Fry, Piranha Photography
Printed by
Pureprint Group, ISO14001, FSC® certified and CarbonNeutral®
Printed on Revive 100 Silk which is made from 100% recovered
waste. All of the pulp is bleached using an elemental chlorine
free process (ECF). Printed in the UK by Pureprint using their
environmental printing technology; vegetable inks were used
throughout. Pureprint is a CarbonNeutral® company. Both
manufacturing mill and printer are ISO14001 registered and are
Forest Stewardship Council® (FSC) chain-of-custody certified.
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www.relx.com