Highlights Successful delivery of 3 year strategic programme Successful delivery of 3 year strategic...

HighlightsHighlights

Successful delivery of 3 year strategic Successful delivery of 3 year strategic programmeprogramme

Achievement of 2002 financial targets despite Achievement of 2002 financial targets despite economic downturn economic downturn

Harcourt makes strong contribution in first Harcourt makes strong contribution in first full yearfull year

On track to meet strategic and financial On track to meet strategic and financial targets for 2003targets for 2003

Financial UpdateFinancial Update

Mark Armour Mark Armour

Chief Financial OfficerChief Financial Officer

Adjusted figures exclude amortisation of goodwill and intangible assets and exceptional items Adjusted figures exclude amortisation of goodwill and intangible assets and exceptional items

TurnoverTurnover

Adjusted operating profitAdjusted operating profit

Operating marginOperating margin

Net interest expenseNet interest expense

Adjusted profit before taxAdjusted profit before tax

%%

%%

%%

% change% changeconstantconstant

20012001 €m €m

20022002€m€m

20012001£m£m

20022002£m£m

4,5604,560

1,5941,594990990

22%22%22%22%

(229)(229)(142)(142)

1,3651,365848848

12 months to 31 December12 months to 31 December

7,3427,3425,0205,020

1,1331,133

23%23%

(206)(206)

927927

7,9827,982

1,8011,801

23%23%

(327)(327)

1,4741,474

+13+13

+17+17

+11+11

Adjusted Profit And LossAdjusted Profit And Loss

RevenuesRevenues Adjusted operating Adjusted operating profitprofit

1,024

1,649

2,059

1,295

0

400

800

1,200

1,600

2,000

2,400

20012001 2002200220012001 20022002

344

554

682

429

0

100

200

300

400

500

600

700

800

20012001 2002200220012001 20022002

Science & Medical:Science & Medical:Revenues up 29% - adjusted operating profit up 26% - margin 33.1%Revenues up 29% - adjusted operating profit up 26% - margin 33.1%

Underlying revenues up 6%; operating profit up 11%Underlying revenues up 6%; operating profit up 11% Strong renewals, growing online sales, successful publishing Strong renewals, growing online sales, successful publishing

programmeprogramme Integration of Harcourt mostly completeIntegration of Harcourt mostly complete Harcourt STM proforma revenues up 6%; operating profit up 14%Harcourt STM proforma revenues up 6%; operating profit up 14%

£m£m €€mm £m£m €€mm

Legal:Legal:Revenues up 5% - adjusted operating profit up 10% - margin 21.3%Revenues up 5% - adjusted operating profit up 10% - margin 21.3%

Underlying revenues up 4%; operating profit up 11%Underlying revenues up 4%; operating profit up 11% Operating margins improved 1.2% points; cost programmes implementedOperating margins improved 1.2% points; cost programmes implemented US Legal revenues up 4%; online up 8%US Legal revenues up 4%; online up 8% Corporate and Federal revenues up 5%; strong risk solutionsCorporate and Federal revenues up 5%; strong risk solutions LexisNexis International solid performance ex Latin AmericaLexisNexis International solid performance ex Latin America


1,330

2,141 2,145

1,349

0

500

1000

1500

2000

2500

267

430

287

456

0

100

200

300

400

500

20012001 2002200220012001 20022002 20012001 2002200220012001 20022002

£m£m £m£m€€€€ €€mm€€mm

Education:Education:Revenues up 78% - adjusted operating profit up 45% - margin 18.4%Revenues up 78% - adjusted operating profit up 45% - margin 18.4%

Underlying revenues up 2%; operating profit up 4%Underlying revenues up 2%; operating profit up 4% Harcourt K-12 and Testing proforma revenues up 2%;Harcourt K-12 and Testing proforma revenues up 2%;

adjusted operating profit up 6%adjusted operating profit up 6% Strong performance against a market down 5%; integration benefits increasingStrong performance against a market down 5%; integration benefits increasing Testing underlying revenues up 8% on strong prior year;Testing underlying revenues up 8% on strong prior year;

operating profit up 25%operating profit up 25% Harcourt International underlying revenues flat; profit down 10%Harcourt International underlying revenues flat; profit down 10%


579

932

1,579

993

0

200

400

600

800

1000

1200

1400

1600

1800

132

212

291

183

0

50

100

150

200

250

300

20012001 2002200220012001 20022002 20012001 2002200220012001 20022002

£m£m £m£m€€mm €€mm

Business:Business:Revenues down 14% - adjusted operating profit down 4% - margin 16.9%Revenues down 14% - adjusted operating profit down 4% - margin 16.9%

Underlying revenues down 6%; operating profit up 2%Underlying revenues down 6%; operating profit up 2% No recovery in advertising marketsNo recovery in advertising markets Cost actions taken across the businessCost actions taken across the business Strong outperformance of market; continued share gains and yield Strong outperformance of market; continued share gains and yield

managementmanagement Exhibitions resilient: underlying revenues down 1%; operating profit flatExhibitions resilient: underlying revenues down 1%; operating profit flat


1,627

2,620

2,199

1,383

0

1000

2000

3000

247

398372

234

0

100

200

300

400

500

20012001 2002200220012001 20022002 20012001 2002200220012001 20022002

£m£m £m£m€€mm €€mm

Adjusted Profit Before Tax: Adjusted Profit Before Tax: ReconciliationReconciliation

+8%+8%1,4741,474+9%+9%9279272002 Adjusted profit before tax2002 Adjusted profit before tax

-3%-3%(41)(41)-2%-2%(14)(14)Currency translation effectCurrency translation effect

-3%-3%(45)(45)-3%-3%(28)(28)Acquisitions/DisposalsAcquisitions/Disposals

+11%+11%150150+11%+11%9393Base business (including Base business (including Harcourt proforma)Harcourt proforma)

1,3651,3658488482001 Adjusted profit before tax2001 Adjusted profit before tax

% % changechange€€mm

% % changechange£m£m12 months to 31 December12 months to 31 December

Adjusted figures exclude amortisation of goodwill and intangibles and exceptional items Adjusted figures exclude amortisation of goodwill and intangibles and exceptional items

+3%+3%4545+3%+3%2828Harcourt (2001 full year adj.)Harcourt (2001 full year adj.)

20012001€€mm

20022002€€mm

20012001£m£m

20022002£m£m12 months to 31 December12 months to 31 December

Adjusted Operating and Free Cash FlowAdjusted Operating and Free Cash Flow

1,6201,6201,6061,6061,0061,0061,0101,010Adjusted operating cash flowAdjusted operating cash flow

85%85%93%93%85%85%93%93%Before HarcourtBefore Harcourt

102%102%89%89%102%102%89%89%TotalTotal

189%189%79%79%189%189%79%79%Harcourt businessesHarcourt businesses

% conversion:% conversion:

(184)(184)(326)(326)(114)(114)(205)(205)InterestInterest

(287)(287)(245)(245)(178)(178)(154)(154)TaxTax

1,1491,1491,0351,035714714651651Free cash flow before dividendsFree cash flow before dividends

Free Cash FlowFree Cash Flow

(2,731)(2,731)305305(1,696)(1,696)192192Total cash inflow/(outflow) before Total cash inflow/(outflow) before financingfinancing

7171(157)(157)4444(99)(99)Other exceptional itemsOther exceptional items

1541541681689696106106DisposalsDisposals

(3,694)(3,694)(307)(307)(2,295)(2,295)(193)(193)Acquisition spendAcquisition spend

2001 2001 €€mm

2002 2002 €€mm

20012001£m£m


(411)(411)(434)(434)(255)(255)(273)(273)DividendsDividends

1,1491,1491,0351,035714714651651Free cash flow before dividendsFree cash flow before dividends

738738601601459459378378Free cash flow after dividendsFree cash flow after dividends

Exceptional ItemsExceptional Items

1301301941948181122122Net tax creditNet tax credit

(117)(117)(176)(176)(72)(72)(111)(111)Exceptional charge before taxExceptional charge before tax

4141(19)(19)2626(12)(12)Net (loss)/ profit on sale of businesses Net (loss)/ profit on sale of businesses and fixed asset investmentsand fixed asset investments

(158)(158)(157)(157)(98)(98)(99)(99)Charged to operating profitCharged to operating profit

(102)(102)(90)(90)(63)(63)(57)(57)Acquisition related costsAcquisition related costs

(56)(56)(67)(67)(35)(35)(42)(42)Reorganisation costsReorganisation costs

20012001€€mm

20022002€€mm

20012001£m£m

20022002£m£m

13131818991111Total exceptional creditTotal exceptional credit


Adjusted Earnings and DividendsAdjusted Earnings and Dividends

--€€0.300.30+7%+7%11.2p11.2pEqualised dividendsEqualised dividends

+11%+11%+8%+8%€€0.690.69+9%+9%28.5p28.5pAdjusted EPSAdjusted EPS

% change % change constantconstant

Reed Elsevier Reed Elsevier NVNV

Reed Elsevier Reed Elsevier PLCPLC

Strategy & ExecutionStrategy & Execution

Crispin Davis Crispin Davis

Chief Executive OfficerChief Executive Officer

Focus onFocus onfour corefour core

businessesbusinesses

Clear and Consistent StrategyClear and Consistent Strategy

OptimiseOptimiseoperations/operations/

cost cost efficiencyefficiency

OptimiseOptimiseoperations/operations/

cost cost efficiencyefficiency

Substantially Substantially increased increased

investmentinvestment

Substantially Substantially increased increased

investmentinvestment

Powerful Powerful marketing/salemarketing/sales programmess programmes

Powerful Powerful marketing/salemarketing/sales programmess programmes

Demonstrably Demonstrably superior superior productsproducts

Demonstrably Demonstrably superior superior productsproducts

Infill Infill acquisitions/ acquisitions/

alliancesalliances

Infill Infill acquisitions/ acquisitions/

alliancesalliances

Upgrade Upgrade organisationorganisationeffectivenesseffectiveness

Upgrade Upgrade organisationorganisationeffectivenesseffectiveness

Strengthen Strengthen global global

portfolioportfolio

Strengthen Strengthen global global

portfolioportfolio

Reed Elsevier:Reed Elsevier:Key Objectives 2002Key Objectives 2002

Maximise above market organic growth Maximise above market organic growth from four core businessesfrom four core businesses

Execute and deliver on all strategic Execute and deliver on all strategic milestonesmilestones

Ensure Harcourt achieves growth Ensure Harcourt achieves growth objective; complete integration wellobjective; complete integration well MostlyMostly

Improve operating margin further Improve operating margin further through increased efficiencythrough increased efficiency

Deliver double digit earnings growthDeliver double digit earnings growth

Science & Medical:Science & Medical:2002 Priorities2002 Priorities

Maintain ScienceDirect momentum on key Maintain ScienceDirect momentum on key performance yardsticks: usage, performance yardsticks: usage, penetration and attritionpenetration and attrition

Deliver on new product initiatives Deliver on new product initiatives programme driving additional revenuesprogramme driving additional revenues

Implement core medical growth strategy Implement core medical growth strategy Finalise online medical strategy; Finalise online medical strategy;

start implementationstart implementation Complete Harcourt integration, deliver Complete Harcourt integration, deliver

revenue and cost targetsrevenue and cost targets

Science & Medical:Science & Medical:Growth Momentum - ScienceDirectGrowth Momentum - ScienceDirect

Content increased from 1.8 million to 3.3 Content increased from 1.8 million to 3.3 million articlesmillion articles

Penetration up 6 percentage points to 72%Penetration up 6 percentage points to 72% Usage up 70% to 86 million article Usage up 70% to 86 million article

downloadsdownloads Strong growth in e-only sales to $110 millionStrong growth in e-only sales to $110 million

Science & Medical:Science & Medical:ScienceDirect:ScienceDirect: Increasing UsageIncreasing Usage

Article downloads (millions)Article downloads (millions)

19991999 20002000 20012001 20022002

8686

2828

5050

1616

Science & Medical:Science & Medical:ScienceDirect: Increasing PenetrationScienceDirect: Increasing Penetration

60%60%

69%69%65%65%

72%72%

45%45%

35%35%

Aug00Aug00 Dec00Dec00 Aug01Aug01 Dec01Dec01 Aug02Aug02Dec02Dec02

Science & Medical:Science & Medical:Growth Momentum: Health SciencesGrowth Momentum: Health Sciences

Upgrade management effectivenessUpgrade management effectiveness– Cohesive market driven organisationCohesive market driven organisation– Strong new management teamStrong new management team

Develop superior productsDevelop superior products– Strong new publishing programmeStrong new publishing programme– Investment in product developmentInvestment in product development

Major upgrade of sales and marketingMajor upgrade of sales and marketing Develop superior online capabilitiesDevelop superior online capabilities

– Upgrade of MD Consult (subscribers up 15%; Upgrade of MD Consult (subscribers up 15%; sales up over 30%)sales up over 30%)

– Launch of PDAs/EVOLVE (Launch of PDAs/EVOLVE (ee-learning platform)-learning platform)

Science & Medical:Science & Medical:Turnaround in Health SciencesTurnaround in Health Sciences

Double digitDouble digitSingle digitSingle digitProfit GrowthProfit Growth

Mid 20sMid 20sLow 20sLow 20sMarginMargin

+6%+6%+3%+3%Revenue GrowthRevenue Growth

824824495495Size ($m)Size ($m)

Post AcquisitionPost AcquisitionPre AcquisitionPre Acquisition

Science & Medical:Science & Medical:Growth Momentum: HarcourtGrowth Momentum: Harcourt

Acquired business performing wellAcquired business performing well– 2002 proforma revenue growth accelerated to 6%, ahead of 2002 proforma revenue growth accelerated to 6%, ahead of

marketmarket– Margin improvement delivering double digit profit growthMargin improvement delivering double digit profit growth

Integration successfulIntegration successful– $40m cost savings target to be exceeded$40m cost savings target to be exceeded– More effective organisation driving further savingsMore effective organisation driving further savings

Outlook is very encouragingOutlook is very encouraging– Accelerated journals growth within ScienceDirectAccelerated journals growth within ScienceDirect– Developing Health Sciences electronic productDeveloping Health Sciences electronic product– Platform for global expansion, e.g. Holtzbrinck STMPlatform for global expansion, e.g. Holtzbrinck STM– Continuing programme of margin improvementContinuing programme of margin improvement

Science & Medical:Science & Medical:Growth MomentumGrowth Momentum

Strong front list publishingStrong front list publishing Expand digital collections and electronic Expand digital collections and electronic

servicesservices Enhanced navigation and deliveryEnhanced navigation and delivery

Superior productsSuperior productsSuperior productsSuperior products

Focused branding and customer Focused branding and customer relationshipsrelationships

Optimum electronic pricing strategiesOptimum electronic pricing strategies Enhance sales force effectivenessEnhance sales force effectiveness

Powerful sales & Powerful sales & marketingmarketingPowerful sales & Powerful sales & marketingmarketing

Complete product rationalisationComplete product rationalisation Standardisation of productionStandardisation of production Enhanced systems effectivenessEnhanced systems effectiveness

Cost efficiencyCost efficiencyCost efficiencyCost efficiency

Global expansionGlobal expansionGlobal expansionGlobal expansion Acquisition of national health publishersAcquisition of national health publishers Product geocloningProduct geocloning Widening distributionWidening distribution

Legal:Legal:2002 Priorities2002 Priorities

Further upgrade of electronic product: content, Further upgrade of electronic product: content, functionality, customisation to achieve preferred functionality, customisation to achieve preferred product statusproduct status

Accelerated growth of online usage; monetiseAccelerated growth of online usage; monetise Maintain competitive position in law schoolsMaintain competitive position in law schools

Implement margin improvement programme - Implement margin improvement programme - towards mid-20s targettowards mid-20s target

Accelerate global expansion: geography, Accelerate global expansion: geography, global platform, branding, organisation global platform, branding, organisation

SEESAWSEESAW

Legal: Legal: Developing Superior US Legal Developing Superior US Legal ProductsProducts

Navigation Navigation ImprovementsImprovements

Navigation Navigation ImprovementsImprovements

Improved Improved Company DossierCompany Dossier

Improved Improved Company DossierCompany Dossier

Annotated Annotated CodesCodes

Annotated Annotated CodesCodes

Leading Risk Leading Risk Solution ApplicationSolution Application

Leading Risk Leading Risk Solution ApplicationSolution Application

Case Law Case Law SummariesSummariesCase Law Case Law

SummariesSummariesNew Global New Global

Product PlatformProduct PlatformNew Global New Global

Product PlatformProduct Platform

Court DocketCourt Dockete-Filinge-Filing

Court DocketCourt Dockete-Filinge-Filing

State by State State by State CustomisationCustomisationState by State State by State CustomisationCustomisation

Legal:Legal:US Legal Online Usage GrowingUS Legal Online Usage Growing

Growth in commercial Growth in commercial searchessearches

19991999 20002000 20012001 20022002

+22%+22%

+17%+17%

+31%+31%

2002 Online Revenue Growth +8%2002 Online Revenue Growth +8%

Legal:Legal:Growth Momentum - Risk SolutionsGrowth Momentum - Risk Solutions

Strong growth market; increasing concerns Strong growth market; increasing concerns over fraud, identity theft and national securityover fraud, identity theft and national security

Superior information and risk assessment Superior information and risk assessment solutionssolutions– Most comprehensive, reliable public records Most comprehensive, reliable public records

databasedatabase– Application of advanced data linking and scoring Application of advanced data linking and scoring

technologiestechnologies

Revenues up 29% in 2002Revenues up 29% in 2002

Legal:Legal:Optimising Cost EfficiencyOptimising Cost Efficiency

19991999 20002000 20012001 20022002

21.3%21.3%

19.7%19.7% 20.1%20.1%

24.9%24.9%

Operating MarginOperating Margin

Legal:Legal:Accelerating Global ExpansionAccelerating Global Expansion

Global regional organisation structure in placeGlobal regional organisation structure in place Global delivery platform on target; rollout 2003Global delivery platform on target; rollout 2003 Geographic expansionGeographic expansion

– Established German operations; MBO VerlagEstablished German operations; MBO Verlag– Acquisition of Quicklaw in CanadaAcquisition of Quicklaw in Canada– Acquisition of FactLANE in The NetherlandsAcquisition of FactLANE in The Netherlands

Global brand establishedGlobal brand established

Legal:Legal:Growth MomentumGrowth Momentum

More content: dockets, codes, summariesMore content: dockets, codes, summaries More functionality: e-filing, company dossier, More functionality: e-filing, company dossier,

risk solutionsrisk solutions More customisation: small law, litigation More customisation: small law, litigation

support, One Searchsupport, One Search


Focus on market segmentationFocus on market segmentation Maintain strong law schools programmeMaintain strong law schools programme Enhanced sales force effectivenessEnhanced sales force effectiveness


Margin improvement programmeMargin improvement programme Operational/fulfilment improvementsOperational/fulfilment improvements


Global expansionGlobal expansionGlobal expansionGlobal expansion Rollout of global delivery platformRollout of global delivery platform Priority countries penetrated/targetedPriority countries penetrated/targeted

Education:Education:2002 Priorities2002 Priorities Win greatest share of new K-12 basal and Win greatest share of new K-12 basal and

supplementary spending: US and internationalsupplementary spending: US and international Win greatest share of new educational testing Win greatest share of new educational testing

contractscontracts Establish strong core competencies and Establish strong core competencies and

focus in electronic product development and focus in electronic product development and sales sales

Ensure basal/supplementary publishing Ensure basal/supplementary publishing programmes on track for 2003/2004 growth programmes on track for 2003/2004 growth

Organisation: appoint division head; align Organisation: appoint division head; align Harcourt values/culture with Reed ElsevierHarcourt values/culture with Reed Elsevier

xx

Education:Education:Winning Performance in 2002 Winning Performance in 2002 AdoptionsAdoptions

# 2# 2# 1# 1ScienceScience

# 2# 2# 1# 1Social StudiesSocial Studies

# 4# 4# 1# 1MathematicsMathematics

# 1# 1# 1# 1Language ArtsLanguage Arts

#2#2# 2# 2Reading/LiteratureReading/Literature

SecondarySecondaryElementaryElementary

Overall Overall # 1# 1

Overall Overall # 2# 2

Based on estimated share obtained from total available sales across all adoptions in these subjects in 2002Based on estimated share obtained from total available sales across all adoptions in these subjects in 2002

OutperformOutperform

US Education Market*US Education Market*Growth %Growth % 33 1313 88

Harcourt US EducationHarcourt US EducationGrowth %Growth %

Note:Note: * US Education Market represent total K-12 textbook sales as reported by* US Education Market represent total K-12 textbook sales as reported by

Association of American Publishers (AAP). Association of American Publishers (AAP).

Education:Education:Market OutperformanceMarket Outperformance

333344 1111

- 5- 5

00

1212

99

19981998 19991999 20002000 20012001 20022002

Education:Education:Market OutperformanceMarket Outperformance

# 1 overall market share in 2002 adoptions# 1 overall market share in 2002 adoptions Good growth in open territories and backlistGood growth in open territories and backlist Short term market weaknessShort term market weakness

– Low point in adoption cycleLow point in adoption cycle– State budget pressuresState budget pressures– Delayed spending in anticipation of federal moniesDelayed spending in anticipation of federal monies

Investment in e-learning, funded by integration Investment in e-learning, funded by integration savingssavings

Education:Education:US K-12 Historic Market GrowthUS K-12 Historic Market Growth

14%14%13%13%

7%7%6%6%

5%5%

11%11%

33%%22%%

-2-2%%

11%11%

-7%-7%

1155%%

6%6%

1133%%1122%%

3%3%

13%13%

8%8%

-5%-5%

-10%-10%

-5%-5%

0%0%

5%5%

10%10%

15%15%

20%20%

19841984 19851985 19861986 19871987 19881988 19891989 19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000 20012001 20022002

Last Last 2020 years : Av Growth years : Av Growth +6%+6%Last Last 1010 years : Av Growth years : Av Growth +7%+7%Last Last 55 years : Av Growth years : Av Growth +6%+6%

Source : AAP Industry DataSource : AAP Industry Data

Education:Education:Growth Momentum: TestingGrowth Momentum: Testing

Good growth on top of exceptional 2001Good growth on top of exceptional 2001– New state contract winsNew state contract wins– New assessment publishingNew assessment publishing

Stanford Achievement Test 10 launchedStanford Achievement Test 10 launched– Strong norm reference heritageStrong norm reference heritage– Adaptable to state specific criteriaAdaptable to state specific criteria

California state contract not renewedCalifornia state contract not renewed– Impact on 2003 revenue growth (approximately $45m)Impact on 2003 revenue growth (approximately $45m)

Strong profit performance driven byStrong profit performance driven by– New organisation and management appointmentsNew organisation and management appointments– Substantial improvement in process efficiency Substantial improvement in process efficiency

Investment in e-assessment stepped upInvestment in e-assessment stepped up

Education: Education: Growth MomentumGrowth Momentum

Proven programme development processProven programme development process Expansion across curriculum rangeExpansion across curriculum range Building online products: e-learning,Building online products: e-learning,

e-testing, e-professional developmente-testing, e-professional development


Market research embedded in development Market research embedded in development and sales processand sales process

Strengthen Open Territories sales forceStrengthen Open Territories sales force


Greater focus on organisational efficiencyGreater focus on organisational efficiency Further supply chain savings targetedFurther supply chain savings targeted


Global expansionGlobal expansionGlobal expansionGlobal expansion Appointment of Global CEO to drive strategic Appointment of Global CEO to drive strategic

development development Product transfer across marketsProduct transfer across markets Acquisition potentialAcquisition potential

Business:Business:2002 Priorities2002 Priorities

Deliver above market revenue growth in Deliver above market revenue growth in all key marketsall key markets

Further upgrade magazine quality and sales Further upgrade magazine quality and sales effectivenesseffectiveness

Build more integrated global B2B business: Build more integrated global B2B business: brands, sectors, customersbrands, sectors, customers

Achieve meaningful margin improvement at Achieve meaningful margin improvement at RBI USRBI US

Drive internet solutions to achieve double Drive internet solutions to achieve double digit revenue growth digit revenue growth

Business:Business:Continuing Tough MarketsContinuing Tough Markets

UKUK Technology and Air Transport hardest hit;Technology and Air Transport hardest hit;recovery in Agriculture; Social Services strong recovery in Agriculture; Social Services strong

Rate of decline now slowed; more stable/ Rate of decline now slowed; more stable/ predictable trend; no real sign of recoverypredictable trend; no real sign of recovery

OverallOverall

USUS Electronics and Manufacturing hardest hit; Electronics and Manufacturing hardest hit; growth in Construction and Entertainment growth in Construction and Entertainment

Significant sector variation; subscription and Significant sector variation; subscription and circulation holding upcirculation holding up

Continental Continental EuropeEurope

Leading shows hold up well; Asia Pacific growth Leading shows hold up well; Asia Pacific growth offset by US Manufacturing weakness; 2002 offset by US Manufacturing weakness; 2002 cycling broadly neutralcycling broadly neutral

Global Global ExhibitionsExhibitions

Business:Business:Market OutperformanceMarket Outperformance

Leadership positions in almost all sectorsLeadership positions in almost all sectors Geographic and sector spreadGeographic and sector spread Investment led momentum has built shareInvestment led momentum has built share Effective management of costsEffective management of costs Continued strong online growthContinued strong online growth

Gifts & Decorative Acc.Gifts & Decorative Acc. +6%+6%

Laboratory EquipmentLaboratory Equipment +7%+7%

Professional BuilderProfessional Builder +8%+8%

Variety - weeklyVariety - weekly +9%+9%

RBI USRBI US

RBI EuropeRBI EuropeBouwwereldBouwwereld +8%+8%

ElsevierElsevier +7%+7%

LogistiekKrantLogistiekKrant +9%+9%

Medisch ContactMedisch Contact +8%+8%

Based on % gain in share of ad pages January - December 2002; excludes yield effectsBased on % gain in share of ad pages January - December 2002; excludes yield effects

RBI UKRBI UKCaterer & HotelkeeperCaterer & Hotelkeeper

+4%+4%

Estates GazetteEstates Gazette

+4%+4%

Farmers WeeklyFarmers Weekly

+8%+8%

Personnel TodayPersonnel Today

+4%+4%

Business:Business:Market Share GainsMarket Share Gains

Business:Business:Online Revenue GrowthOnline Revenue Growth

$m$m

19991999 20002000 20012001 20022002

5757

9595

115115

2222

Business:Business:Growth MomentumGrowth Momentum

Constant product improvementConstant product improvement New online servicesNew online services


Disciplined customer feedback Disciplined customer feedback programmesprogrammes

Market segmentation and yield Market segmentation and yield managementmanagement

Enhanced sales force effectiveness Enhanced sales force effectiveness


Further supply chain savingsFurther supply chain savings US margin improvement programmeUS margin improvement programme


Global expansionGlobal expansionGlobal expansionGlobal expansion Leverage global marketsLeverage global markets Geocloning of titles and showsGeocloning of titles and shows Selective acquisitionsSelective acquisitions

StrategicStrategic Higher quality overall portfolio; excellent fit Higher quality overall portfolio; excellent fit Significant boost for Science publishing Significant boost for Science publishing

Global leadership in Medical, with strong growth Global leadership in Medical, with strong growth

potential potential Major position in long term growth US education Major position in long term growth US education

marketmarket

FinancialFinancial Acceleration of revenue and profit growth Acceleration of revenue and profit growth Achieve annual return over WACC within 5 years Achieve annual return over WACC within 5 years Earnings accretion Earnings accretion Add to shareholder value (NPV basis) Add to shareholder value (NPV basis)

The Harcourt AcquisitionThe Harcourt AcquisitionDelivering on CriteriaDelivering on Criteria

Reed Elsevier:Reed Elsevier:Internet RevenuesInternet Revenues

£m/€m£m/€m

19991999 20002000 20012001 20022002

436/715436/715

750/1208750/1208

1008/16031008/1603

120/182120/182

Reed Elsevier:Reed Elsevier:Investment and Cost SavingsInvestment and Cost Savings

Continuing investment driving momentumContinuing investment driving momentum Relentless focus on operational efficiencyRelentless focus on operational efficiency

£/€£/€ 19991999 20002000 20012001 20022002

Investment £ Investment £ 8080 270270 260260 290290

€ € 122122 440440 419419 461461

Cost Savings £Cost Savings £ -- 143143 215215 overover 350 350

€ € -- 235235 346346 overover 550 550

Reed Elsevier:Reed Elsevier:Key Objectives For 2003Key Objectives For 2003

Maximise above market organic growth from Maximise above market organic growth from four core businessesfour core businesses

Execute and deliver on all strategic milestonesExecute and deliver on all strategic milestones

Improve operating margin further through Improve operating margin further through increased efficiencyincreased efficiency

Deliver double digit earnings growthDeliver double digit earnings growth

Product superiorityProduct superiority

Global expansionGlobal expansionCost efficiencyCost efficiency

Powerful sales and Powerful sales and marketingmarketing

Strong business fundamentals and financial positionStrong business fundamentals and financial positionStrong business fundamentals and financial positionStrong business fundamentals and financial position

ConclusionsConclusions

Strong organic growth across all businesses compared Strong organic growth across all businesses compared to marketto market

Strong organic growth across all businesses compared Strong organic growth across all businesses compared to marketto market

On track to deliver 2003 goals of above-marketOn track to deliver 2003 goals of above-marketrevenue and double-digit profit growthrevenue and double-digit profit growth

On track to deliver 2003 goals of above-marketOn track to deliver 2003 goals of above-marketrevenue and double-digit profit growthrevenue and double-digit profit growth

Harcourt acquisition has acceleratedHarcourt acquisition has acceleratedrevenue and profit growthrevenue and profit growth

Harcourt acquisition has acceleratedHarcourt acquisition has acceleratedrevenue and profit growthrevenue and profit growth

Reed Elsevier strategy proving effectiveReed Elsevier strategy proving effectiveReed Elsevier strategy proving effectiveReed Elsevier strategy proving effective

AppendicesAppendices

Turnover: ReconciliationTurnover: Reconciliation

%%changechange€€mm

% % changechange£m£m

+9%+9%7,9827,982+10%+10%5,0205,0202002 Turnover2002 Turnover

-4%-4%(316)(316)-3%-3%(134)(134)Currency translation effectCurrency translation effect

-3%-3%(243)(243)-3%-3%(151)(151)DisposalsDisposals

+1%+1%6464+1%+1%4040Other Other acquisitionsacquisitions

+1%+1%118118+1%+1%7373Base businesses (including Base businesses (including Harcourt proforma)Harcourt proforma)

7,3427,3424,5604,5602001 Turnover2001 Turnover

Harcourt (2001 full year adj.)Harcourt (2001 full year adj.) 632632 +14%+14% 1,0171,017 +14%+14%


Average rates:Average rates:

per £1per £1 20012001 20022002

US DollarUS Dollar 1.441.44 1.501.50

Euro Euro 1.611.61 1.591.59

EuroEuro30%30%

OtherOther5%5% UK UK

SterlingSterling21%21%

US DollarUS Dollar44%44%

Average rates:Average rates:

per €1per €1 20012001 20022002

US DollarUS Dollar 0.890.89 0.940.94

Sterling Sterling 0.620.62 0.630.63

Currency Profile:Currency Profile:Adjusted Profit Before TaxAdjusted Profit Before Tax

€€0.130.13€€0.180.18Reed Elsevier NV EPSReed Elsevier NV EPS

4.8p4.8p7.0p7.0pReed Elsevier PLC EPSReed Elsevier PLC EPS

202202288288126126181181Reported profit attributableReported profit attributable

13131818991111Exceptional itemsExceptional items

(816)(816)(814)(814)(507)(507)(512)(512)Amortisation of goodwill and Amortisation of goodwill and intangible assetsintangible assets

1,0051,0051,0841,084624624682682Adjusted profit attributableAdjusted profit attributable

20012001€€mm

20022002€€mm

20012001£m£m


Reported Profit AttributableReported Profit Attributable

Balance SheetBalance Sheet

1,4161,4161,1831,183863863773773

Net debtNet debt 5,2965,2964,1804,1803,2293,2292,7322,732

Other net liabilities/minoritiesOther net liabilities/minorities

4,7844,7844,0684,0682,9172,9172,6592,659Shareholders’ fundsShareholders’ funds

11,49611,4969,4319,4317,0097,0096,1646,164

395395214214241241140140InvestmentsInvestments

802802741741489489484484Tangible fixed assetsTangible fixed assets

11,02611,0268,8958,8956,7236,7235,8145,814Goodwill/intangible assetsGoodwill/intangible assets

20012001€€mm

20022002€€mm

20012001£m£m

20022002£m£m

(727)(727)(419)(419)(444)(444)(274)(274)Working CapitalWorking Capital

11,49611,4969,4319,4317,0097,0096,1646,164

At 31 DecemberAt 31 December

Dividend EqualisationDividend Equalisation

Reed Elsevier PLC (p)Reed Elsevier PLC (p)

20022002 20012001 %%ChangeChange

InterimInterim

20022002 20012001 %%ChangeChange

FinalFinal

3.203.20 3.103.10 8.008.00 7.407.40 8%8%

UK tax credit rateUK tax credit rate

Reed Elsevier PLC Reed Elsevier PLC (gross)(p)(gross)(p)

Equalisation ratioEqualisation ratio

Exchange rate (€:£)Exchange rate (€:£)

Reed Elsevier NV (€)Reed Elsevier NV (€)

10%10% 10%10%

3.563.56 3.443.44

1.5381.538

1.591.59

0.090.09

1.5381.538

1.631.63

0.090.09 0%0%

3%3%

10%10%

8.898.89

1.5381.538

1.511.51

0.210.21

10%10%

8.228.22

1.5381.538

1.631.63

0.210.21 0%0%

This presentation contains forward-looking statements within the meaning of Section 27A of the US Securities Act 1933, as amended, and Section 21E of the US Securities Exchange Act 1934, as amended. These statements are subject to a number of risks and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in such forward looking statements. The terms ‘expect’, ‘should be’, ‘will be’, and similar expressions identify forward looking statements. Factors which may cause future outcomes to differ from those foreseen in forward looking statements include, but are not limited to: general economic conditions and business conditions in Reed Elsevier’s markets; exchange rate fluctuations; customers’ acceptance of its products and services; the actions of competitors; legislative, fiscal and regulatory developments; changes in law and legal interpretation affecting Reed Elsevier’s intellectual property rights, and the impact of technological change.

Date post:	27-Mar-2015
Category:	Documents
Upload:	aidan-pratt
View:	217 times
Download:	0 times

Highlights Successful delivery of 3 year strategic programme Successful delivery of 3 year strategic...

Documents