As filed with the Securities and Exchange Commission on February 22, 201823, 2023
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM20-F
(Mark One)
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☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Or
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☑ | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31 2017, 2022
Or
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Or
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☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 1-13334
RELX PLC (Exact name of Registrant as specified in its charter) England (Jurisdiction of incorporation or organisation) 1-3 Strand, LondonWC2N 5JR, England (Address of principal executive offices) Henry Udow Company Secretary RELX PLC 1-3 Strand, London WC2N 5JR, England +44 20 7166 5500 henry.udow@relx.com (Name, telephone, e-mail Company Contact Person) |
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Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of exchange on which registered | |||||
|---|---|---|---|---|---|---|---|
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American Depositary Shares | | RELX | | New York Stock Exchange | |||
Ordinary shares of 14 51/116p each | | | New York Stock Exchange* | ||||
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| RELX/23 | | New York Stock Exchange | ||||
| | RELX/25 | | New York Stock | |||
4.000% Guaranteed Notes due 2029 | | RELX/29 | | New York Stock Exchange | |||
3.000% Guaranteed Notes due 2030 | | RELX/30 | | New York Stock Exchange | |||
4.750% Guaranteed Notes due 2032 | | RELX/32 | | New York Stock Exchange |
* | Listed, not for trading, but only in connection with the listing of the applicable Registrant’s American Depositary Shares issued in respect thereof. |
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuers’issuer’s classes of capital or common stock as of December 31, 2017:2022:
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| Number of outstanding shares | |||||
Ordinary shares of 14 51/116p each | ||||||
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Indicate by check mark if the registrants areregistrant is a well-known seasoned issuers,issuer, as defined in Rule 405 of the Securities Act.
Yes ☑ No ☐
If this report is an annual or transition report, indicate by check mark if the registrants areregistrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐ No ☑
Indicate by check mark whether the registrantsregistrant (1) havehas filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) havehas been subject to such filing requirements for the past 90 days.
Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☑ No ☐
Indicate by check mark whether the registrants areregistrant is a large accelerated filers,filer, an accelerated filers,filer, non-accelerated filers filer or an emerging growth companies.company. See definition of “accelerated filer”,filer,” “large accelerated filer” and “emerging growth company” in Rule12b-2 of the Exchange Act.
Large accelerated filer ☑ | Accelerated filer ☐ | Non-accelerated filer ☐ | ||
Emerging growth company ☐ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrants haveregistrant has used to prepare the financial statements included in this filing.
☐USGAAP☑International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrants haveregistrant has elected to follow:
Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrants areregistrant is a shell companiescompany (as defined in Rule12b-2 of the Exchange Act).
Yes ☐ No ☑
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Auditor Firm Id : | 01438 | Auditor Name : | Ernst & Young LLP | Auditor Location : | London, United Kingdom |
TABLE OF CONTENTS
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ITEM 1: | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | N/A | ||||
ITEM 2: | OFFER STATISTICS AND EXPECTED TIMETABLE | N/A | ||||
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ITEM 4A: | UNRESOLVED STAFF COMMENTS | N/A | ||||
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ITEM 16H: | MINE SAFETY DISCLOSURE | N/A | ||||
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F-1 | ||||||
F-1 | ||||||
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S-3 |
* | The |
3
GENERAL
RELX PLC is a holding company. Itpublic limited company, and owns 52.9%all of the shares of RELX Group plc.
RELX NV is a holding company. It owns 47.1% of the shares of RELX Group plc.
Group.
As used in this Annual Report on Form20-F, the terms “the Group”, “RELX Group”“Group”, “RELX”, “we,”“we”, “our” or “us” refer collectively to RELX PLC and its subsidiaries, associates and joint ventures. For dates and periods ended before the corporate simplification on September 8, 2018, such terms refer collectively to RELX PLC, RELX NV, RELX Group plc and its subsidiaries, associates and joint ventures. Additional terms are defined in the Glossary of Terms on pagesS-1 andS-2.
In this annual report,Annual Report on Form 20-F, references to US dollars, $ and ¢ are to US currency; references to sterling, £, pound sterling, pence or p are to UK currency; references to euro and € are to the currency of the European Economic and Monetary Union.
Statements regarding our competitive position included herein were obtained from internal surveys, market research, publicly available information and industry publications. While we believe that the market research, publicly available information and industry publications we use are reliable, we have not independently verified market and industry data from third-party sources. Moreover, while we believe our internal surveys are reliable, they have not been verified by any independent source.
This document contains references to the RELX Group website, either within the document or incorporated by reference. Information not specifically stated as being incorporated by reference fromto the RELX Group website or any other website referenced is not incorporated into this document and should not be considered part of this document.
Pursuant to Rule12b-23(a) of the US Securities Exchange Act of 1934, as amended (the “Exchange Act”), certain information in this Annual Report on Form20-F is being incorporated by reference to the Group’sRELX Annual ReportsReport and Financial Statements 20172022 appended hereto as Exhibit 15.2. With the exception of the items and pages so specified, the Group’sRELX Annual ReportsReport and Financial Statements 20172022 are not deemed to be filed as part of this Annual Report on Form20-F.
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5
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual reportAnnual Report on Form 20-F contains a number of forward-looking statements within the meaning of Section 27A of the United StatesUS Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the United States Securities Exchange Act, of 1934, as amended, with respect to, among others:
| ● | our financial condition; |
| ● | our results of operations; |
| ● | our competitive positions; |
| ● | the features and functions of and markets for the products and services we offer; and |
| ● | our business plans and strategies. |
We consider any statements that are not historical facts to be “forward-looking statements.”statements”. These statements are based on the current expectations of the management of our businessesthe Group and are subject to risks and uncertainties that could cause actual results or outcomes to differ from those expressed in any forward-looking statement. These differences could be material; therefore, you should evaluate forward-looking statements in light of various important factors, including those set forth or incorporated by reference in this annual report.Annual Report on Form 20-F.
Important factors that could cause our actual results to differ materially from estimates or forecasts contained in the forward-looking statements include, among others:
| ● |
| ● | regulatory and other changes regarding the collection or use of third-party content and data; |
| ● | changes in law and legal interpretation affecting our intellectual property rights and internet communications; |
| ● |
| ● | changes |
| ● | changes in tax laws and uncertainty in their application; |
| changes in the payment model for our |
| ● | competitive factors in the industries in which we |
| ● |
| failure of third parties to whom we have outsourced business activities; |
| ● | breaches of generally accepted ethical business standards or applicable laws; |
| ● | significant failure or interruption of our |
| ● | our inability to realise the future anticipated benefits of acquisitions; |
| ● | our inability to retain high-quality employees and management; |
| ● | exchange rate fluctuations; |
6
| ● | adverse market conditions or downgrades to the credit ratings of our debt; |
| ● | changes in the market values of defined benefit pension scheme assets and in the market related assumptions used to value scheme liabilities; |
| ● |
| ● |
| other risks referenced from time to time in the filings of RELX PLC |
The terms “estimate,” “project,” “plan,” “intend,” “expect,” “should,” “could,” “will,” “believe,” “trends,”“outlook”, “estimate”, “forecast”, “project”, “plan”, “intend”, “expect”, “should”, “could”, “will”, “believe”, “trends” and similar expressions may indicate a forward-looking statement. Forward-looking statements are found at various places throughout this annual reportAnnual Report on Form 20-F and the other information incorporated by reference in this annual report.Annual Report on Form 20-F.
You should not place undue reliance on these forward-looking statements, which speak only as of the date of this annual report.Annual Report on Form 20-F. Except as may be required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this annual reportAnnual Report on Form 20-F or to reflect the occurrence of unanticipated events.
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7
PART I
ITEM 3: KEY INFORMATION
THE GROUP
The selected consolidated financial data for the Group should be read in conjunction with, and is qualified by, the consolidated financial statements for RELX Group which are set forth on pages 117 to 164 of the Group’s Annual Reports and Financial Statements 2017, and incorporated herein by reference to Exhibit 15.2.
RELX PLC and RELX NV are separate, publicly-held entities. RELX PLC and RELX NV jointly own RELX Group plc which holds all of the Group’s operating businesses and financing activities. The Directors have concluded that the Group forms a single reporting entity for the presentation of consolidated financial statements and, accordingly, the Group’s consolidated financial information represents the interests of both sets of shareholders and is presented by both RELX PLC and RELX NV as their respective consolidated financial statements.
The consolidated financial statements are prepared in accordance with accounting policies that are in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and as adopted by the European Union (“EU”). The selected financial data for the Group (in £) as at December 31, 2017, and 2016 and for the years ended December 31, 2017, 2016 and 2015 set out below has been extracted or derived from the audited consolidated financial statements, set forth on pages 117 to 164 of the Group’s Annual Reports and Financial Statements 2017 and incorporated herein by reference to Exhibit 15.2. The selected financial data for the Group as at December 31, 2015, 2014 and 2013 and for the years ended December 31, 2014 and 2013 set out below has been extracted or derived from our audited financial statements, which are not included herein.
Consolidated Income Statement Data(1)
| For the year ended December 31, | ||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
Amounts in accordance with IFRS: | ||||||||||||||||||||
Revenue | £ | 7,355 | £ | 6,895 | £ | 5,971 | £ | 5,773 | £ | 6,035 | ||||||||||
Operating profit(2) | 1,905 | 1,708 | 1,497 | 1,402 | 1,376 | |||||||||||||||
Net finance costs | (182 | ) | (195 | ) | (174 | ) | (162 | ) | (196 | ) | ||||||||||
Disposals and othernon-operating items(3) | 11 | (40 | ) | (11 | ) | (11 | ) | 16 | ||||||||||||
Profit before tax | 1,734 | 1,473 | 1,312 | 1,229 | 1,196 | |||||||||||||||
Tax expense(4) | (67 | ) | (304 | ) | (298 | ) | (269 | ) | (81 | ) | ||||||||||
Net profit for the year | 1,667 | 1,169 | 1,014 | 960 | 1,115 | |||||||||||||||
Net profit for the year attributable tonon-controlling interests | (8 | ) | (8 | ) | (6 | ) | (5 | ) | (5 | ) | ||||||||||
Net profit attributable to RELX PLC and RELX NV shareholders | £ | 1,659 | £ | 1,161 | £ | 1,008 | £ | 955 | £ | 1,110 | ||||||||||
Consolidated Statement of Financial Position Data(1)
| As at December 31, | ||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
Amounts in accordance with IFRS: | ||||||||||||||||||||
Total assets | £ | 12,283 | £ | 13,323 | £ | 11,185 | £ | 11,087 | £ | 10,495 | ||||||||||
Non-current borrowings | (4,208 | ) | (3,684 | ) | (3,278 | ) | (3,149 | ) | (2,633 | ) | ||||||||||
Net assets | 2,374 | 2,358 | 2,178 | 2,137 | 2,423 | |||||||||||||||
Non-controlling interests | (21 | ) | (38 | ) | (34 | ) | (31 | ) | (33 | ) | ||||||||||
Shareholders’ equity | £ | 2,353 | £ | 2,320 | £ | 2,144 | £ | 2,106 | £ | 2,390 | ||||||||||
3
Earnings per share and dividends
| For the year ended December 31, | ||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
| (in millions, except per share amounts) | ||||||||||||||||||||
Amounts in accordance with IFRS(1): | ||||||||||||||||||||
RELX PLC | ||||||||||||||||||||
Earnings per RELX PLC ordinary share | 82.2p | 56.3p | 46.4p | 43.0p | 49.0p | |||||||||||||||
Diluted earnings per RELX PLC ordinary share | 81.5p | 55.8p | 46.0p | 42.5p | 48.3p | |||||||||||||||
Dividends per RELX PLC ordinary share(2) | 37.4p | 32.55p | 26.40p | 24.95p | 23.65p | |||||||||||||||
Weighted average number of shares(3) | 1,068.3 | 1,091.0 | 1,116.2 | 1,140.2 | 1,172.2 | |||||||||||||||
RELX NV(4) | ||||||||||||||||||||
Earnings per RELX NV share | 82.2p | 56.3p | 49.4p | 45.8p | 51.6p | |||||||||||||||
Diluted earnings per RELX NV share | 81.5p | 55.8p | 48.9p | 45.3p | 51.0p | |||||||||||||||
Dividends per RELX NV ordinary share(2) | €0.433 | €0.410 | €0.400 | €0.383 | €0.329 | |||||||||||||||
Weighted average number of shares(3) | 951.1 | 971.3 | 992.4 | 1,014.2 | 1,038.5 | |||||||||||||||
RELX NV dividends paid in the year, in amounts per ordinary share, comprise a 2016 final dividend of €0.301 and 2017 interim dividend of €0.132 giving a total of €0.433. The directors of RELX NV have proposed a 2017 final dividend of €0.316 (2016: €0.301; 2015: €0.288; 2014: €0.285; 2013: €0.243), giving a total ordinary dividend in respect of the financial year of €0.448 (2016: €0.423; 2015: €0.403; 2014: €0.383; 2013: €0.329). Translated at the December 31, 2017 noon buying rate of $1.20 per €1.00, dividends paid in the year amount to $0.52 per RELX NV share and total ordinary dividends in respect of the financial year amount to $0.54 per RELX NV share. See “— Exchange Rates” on page 5.
4
For a discussion of the impact of currency fluctuations on the Group’s consolidated results of operations and consolidated financial position, see “Item 5: Operating and Financial Review and Prospects”.
The following tables illustrate, for the periods and dates indicated, certain information concerning the Noon Buying Rate for pounds sterling expressed in US dollars per £1.00 and for the euro expressed in US dollars per €1.00. The exchange rate on February 14, 2018 was£1.00 = $1.40 and€1.00 = $1.24.
US dollars per £1.00 — Noon Buying Rates
| Period | ||||||||||||||||
Year ended December 31, | End | Average(1) | High | Low | ||||||||||||
2017 | 1.35 | 1.29 | 1.36 | 1.21 | ||||||||||||
2016 | 1.23 | 1.36 | 1.48 | 1.22 | ||||||||||||
2015 | 1.47 | 1.53 | 1.59 | 1.46 | ||||||||||||
2014 | 1.56 | 1.65 | 1.72 | 1.55 | ||||||||||||
2013 | 1.66 | 1.56 | 1.66 | 1.48 | ||||||||||||
Month | High | Low | ||||||||||||||
February 2018 (through February 16, 2018) |
| 1.42 | 1.38 | |||||||||||||
January 2018 |
| 1.43 | 1.35 | |||||||||||||
December 2017 |
| 1.35 | 1.33 | |||||||||||||
November 2017 |
| 1.35 | 1.31 | |||||||||||||
October 2017 |
| 1.33 | 1.31 | |||||||||||||
September 2017 |
| 1.36 | 1.30 | |||||||||||||
US dollars per €1.00 — Noon Buying Rates
| Period | ||||||||||||||||
Year ended December 31, | End | Average(1) | High | Low | ||||||||||||
2017 | 1.20 | 1.13 | 1.20 | 1.04 | ||||||||||||
2016 | 1.05 | 1.11 | 1.15 | 1.04 | ||||||||||||
2015 | 1.09 | 1.11 | 1.21 | 1.05 | ||||||||||||
2014 | 1.21 | 1.33 | 1.39 | 1.21 | ||||||||||||
2013 | 1.38 | 1.32 | 1.38 | 1.28 | ||||||||||||
Month | High | Low | ||||||||||||||
February 2018 (through February 16, 2018) |
| 1.25 | 1.22 | |||||||||||||
January 2018 |
| 1.25 | 1.19 | |||||||||||||
December 2017 |
| 1.20 | 1.17 | |||||||||||||
November 2017 |
| 1.19 | 1.16 | |||||||||||||
October 2017 |
| 1.19 | 1.16 | |||||||||||||
September 2017 |
| 1.20 | 1.17 | |||||||||||||
Noon Buying Rates have not been used in the preparation of the consolidated financial statements but have been used for certain convenience translations where indicated.
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The principal and emerging risks facing our business are included below. Additional risks not presently known to us or that we currently deem immaterial may also impair our business.
Current Compromisesofourcybersecuritysystemsand future economic, politicalotherunauthorisedaccesstoourdatabases,couldadverselyaffectourbusiness and market forces, and dislocations beyond our control may adversely affect demand for our products and services.operations.
Demand for our products and services may be adversely impacted by factors beyond our control, such as the economic environment in the United States, Europe and other major economies, political uncertainties (including the potential consequences of the United Kingdom’s withdrawal from the European Union under Article 50 of the Treaty of Lisbon), acts of war, terrorism and civil unrest as well as levels of government and private funding provided to academic and research institutions.
Our intellectual property rights may not be adequately protected under current laws in some jurisdictions, which may adversely affect our results and our ability to grow.
Our productsbusiness maintains and services includeuses online databases 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.
Regulatory and other changes regarding the collection or use of third-party information to us could adversely affect our businesses.
A number of our businesses rely extensively upon content and data from external sources. Data is obtained from public records, governmental authorities, customers and other information companies, including competitors. Legal regulations, such as the European Union’s General Data Protection Regulation (“GDPR”), relating to internet communications, privacy and data protection,e-commerce, information governance and use of public records, are becoming more prevalent worldwide. The disruption or loss of data sources, either because of changes in the law or because data suppliers decide not to supply them, may impose limits on our collection and use of certain kinds of information about individuals and our ability to communicate such information effectively with our customers.
Changes in the payment model for our Scientific, Technical & Medical primary research content could adversely affect our operations.
Our Scientific, Technical & Medical (STM) primary research content, like that of most of our competitors, is sold largely on a paid subscription basis. There is continued debate in government, academic and library communities, which are the principal customers for our STM content, regarding to what extent such content should be funded instead through fees charged to authors or authors’ funders and/or made freely available in some form after a period following publication. Some of these methods, if widely adopted, could adversely affect our STM revenue from paid subscriptions.
We cannot assure you that there will be continued demand for our products and services.
Our businesses are dependent on the continued acceptance by our customers of our products and services and the value placed on them. Failure to meet evolving customer needs could impact demand for our products and services and consequently adversely affect our revenue or the long-term returns from our investment in electronic product and platform initiatives.
We operate in a highly competitive environment that is subject to rapid change.
Our businesses operate in highly competitive markets, and the means ofplatforms 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 may not realise all of the future anticipated benefits of acquisitions.
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.
6
A significant failure or interruption of our electronic delivery platforms, networks or distribution systems could adversely affect our businesses and operations.
Our businesses are dependent on electronic platforms and networks, primarily the internet, for delivery of our products and services. These could be adversely affected if our electronic delivery platforms or networks experience a significant failure, interruption or security breach.
Compromises of our cyber security systems and other unauthorised access to our databases, could adversely affect our businesses and operations.
Our businesses maintain online databases and information, including public records and other personal information. As part of maintaining this information and delivering our products and services,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.parties including through cyber, ransomware and phishing attacks on us or our third-party service providers.
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.
Regulatorychangesregardingthecollectionanduseofthird-partyinformationbyusorcompromisesofourdataprivacycontrols andotherunauthorisedaccesstoourdatabases,couldadverselyaffectourbusiness andoperations.
Our business operationsrelies extensively on content and reputationdata from public records, governmental authorities, publicly available information and media, customers, end-users and other information companies, including competitors. Changes in data privacy legislation, regulation, and/or enforcement could be adversely affected by aimpact our ability to collect and utilise data, potentially affecting the effectiveness of our products. Failure or perceived failure to comply with FTC Settlement Orders.requirements for proper collection, use, storage and transfer of data, by ourselves, or our third-party service providers, or other data loss incidents may damage our reputation, divert time and effort of management and other resources, and expose us to risk of loss, fines and penalties, litigation and increased regulation.
Ourintellectualpropertyrightsmaynotbeadequatelyprotectedundercurrentlawsinsomejurisdictions,whichmayadversely affect our results and our ability togrow.
Our products and services include and utilise intellectual property. We rely on trademark, copyright, patent, trade secret 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 numerousnational legislative initiatives, as well as cross-border initiatives such as those from the European Commission and evolving lawsincreased 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 regulations designedelectronic platforms.
Currentandfuturegeopolitical,economicandmarketconditions,anddislocationsbeyondourcontrolmayadverselyaffect demand for our products andservices.
Demand for our products and services, and our ability to protect certain informationoperate internationally, may be adversely impacted by geopolitical, economic and throughmarket conditions beyond our Risk & Business Analytics businesscontrol. These include acts of war and civil unrest, political conflicts and tensions, international sanctions, the impact of the effect of changes in inflation and interest rates in major economies, trading relations between the United States, weEurope, China and other major economies, as well as levels of government and private funding for our markets.
8
Changesineconomiccycles,communicablediseaseepidemics,severeweatherevents,naturaldisasters,terrorism,andlackof venues may impact our ability to organiseevents.
Face-to-face events are partysusceptible to two consent orderseconomic cycles, communicable diseases, severe weather events and two subsequent related supplemental orders embodying settlements, regarding our compliance with US federal laws governing consumer informationother natural disasters, terrorism and security-related issues, including certain fraudulent data access incidents. Failureassignment of venues to comply withalternative uses. Each or any of these orders could resultmay impact exhibitors’ and visitors’ desire and ability to travel in civil penaltiesperson to events and the availability of event venues. These factors each have the potential to reduce revenues, increase the costs of organising events and adversely affect our business, operationscash flows and reputation. For example, containment measures, such as quarantines or other travel restrictions and site closures, relating to the Covid-19 pandemic have had and may continue to have a significant impact on face-to-face events in our Exhibitions business with ongoing changing government restrictions on in-person events, particularly in China.
Our businesses may be adversely affected by the failure of third parties to whom we have outsourced business activities.
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 may be unable to implement and execute our strategic and business plans if we cannot maintain high-quality management.
The implementation and execution of our strategies and business plans depend on our ability to recruit, motivate and retain skilled employees and management. We compete globally and across business sectors for talented management and skilled individuals, particularly those with technology and data analytics capabilities. An inability to recruit, motivate or retain talent could adversely affect our business performance. Failure to recruit and develop a diverse and inclusive workforce could adversely affect our reputation and business performance.
Changes in the market values of defined benefit pension scheme assets and in the assumptions used to value defined benefit pension scheme obligations may adversely affect our businesses.
We operate a number of pension schemes around the world, including local versions of the defined benefit type in the UK and the United States. The assets and obligations associated with those pension schemes are sensitive to changes in the market values of the scheme’s investments and the market-related assumptions used to value scheme liabilities. Adverse changes to asset values, discount rates, longevity assumptions or inflation could increase future pension costs and funding requirements.
Changes in tax laws or uncertainty over their application and interpretation may adversely affect our reported results.
Our businesses operatebusiness operates globally, and our profits are subject to taxation in many different jurisdictions and at differing tax rates. The Organisation for EconomicCo-operation and Development (OECD)’s reports on Base Erosion and Profit Shifting
7
suggest a range of new approaches that national governments might adopt when taxing the activities of multinational enterprises. The OECD continues to explore options around the taxation of the digital economy. As a result of the OECD’s work and other international initiatives, taxTax laws that currently apply to our businessesbusiness may be amended by the relevant authorities or interpreted differently by them, and these changes could adversely affect our reported results.
Changesinthepaymentmodelforourscientific,technicalandmedicalprimaryresearchproductsoralternativepublication channels for our content could adversely affect ouroperations.
Traditionally our Scientific, Technical & Medical (STM) primary research content publishing business has operated on a pay to read model, where readers or their institutions, as users of the content pay, and authors publish for free. Over time, an alternative model has gained traction where authors or their institutions or funding bodies prefer to pay to publish their research, so it is freely available to read. The latter model is commonly referred to as Open Access. There is continued debate in government, academic and library communities, regarding the payment models and the extent to which research content should be freely available to read, either immediately on publication or in some form after a period following publication. Changes in customer choice or regulation in this area could adversely impact the mix and overall level of revenue generated by our primary research publishing business.
Weoperateinahighlycompetitiveanddynamicenvironmentthatissubjecttorapidchangeandcannotassureyouthattherewill be continued demand for our products andservices.
Our business is dependent on the continued demand by our customers for our products and services and the value placed on them. They operate in highly competitive and dynamic markets, and the means of delivery, customer demand for, 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, or 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 business may be adversely affected by the failure of third parties to whom we have outsourced business activities.
Our organisational and operational structures depend on suppliers including outsourced and offshored functions, as well as cloud service providers. Poor performance, failure or breach of third parties to whom we have contracted could adversely affect our business performance, reputation and financial condition.
We source content to enable information solutions for our professional customers. The disruption or loss of data sources, either because of data localisation regulations, or because data suppliers decide not to supply them, may impose limits on our collection and use of certain kinds of information and our ability to communicate, offer or make such information available or useful to our customers.
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Breachesofgenerallyacceptedethicalbusinessstandardsorapplicablestatutesconcerningbribery,corruption,fraud,sanctions and competition could adversely affect our reputation and financial condition.
As a global provider of professional information solutions 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, fraud, 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.
Asignificantfailureorinterruptionofourelectronicdeliveryplatforms,networks,distributionsystemsorinfrastructurecould adversely affect our business andoperations.
Our business is dependent on electronic platforms and networks, primarily the internet, for delivery of our products and services. Our operations could be adversely affected if our electronic delivery platforms, networks or supporting infrastructure experience a significant failure, or interruption. Climate change may increase the intensity and frequency of severe weather events which increases the risk of significant failure.
Wemaynotrealiseallofthefutureanticipatedbenefitsofacquisitions.
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, it could adversely affect return on invested capital and financial condition or lead to an impairment of goodwill or intangibles.
Wemaybeunabletoimplementandexecuteourstrategicandbusinessplansifwecannotrecruitandretainskilledemployeesand management.
The implementation and execution of our strategies and business plans depend on our ability to recruit, motivate, develop and retain a diverse population of skilled employees and management. We compete globally and across business sectors for diverse, 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 or other characteristics could adversely affect our reputation and business performance.
Fluctuations in exchange rates may affect our results.
The RELX GroupPLC 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.
Market conditions and credit ratings may affect the availability and cost of funding.
Macroeconomic, political and market conditions may adversely affect the availability and terms of shortshort- 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.
Breaches
Changesinthemarketvaluesof generally accepted ethical business standards or applicable statutes concerning bribery coulddefinedbenefitpensionschemeassetsandintheassumptionsusedtovaluedefinedbenefit pension scheme obligations may adversely affect our business.
We operate a number of pension schemes around the world, including local versions of the defined benefit type in the United Kingdom 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 and reducing portion of the overall UK based workforce. The
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assets and obligations associated with these 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 business, operations and reputation could be adversely affected by a failure to comply with FTC settlement orders.
We are subject to numerous and financial condition.
As a world-leading provider of professionalevolving laws and regulations designed to protect certain information solutionsand, through our Risk business in the United States, we are party to the STM, risktwo consent orders and business analytics, legaltwo subsequent related supplemental orders embodying settlements, regarding our compliance with US federal laws governing consumer information and exhibitions markets we, our employeessecurity-related issues, including certain fraudulent data access incidents. Failure to comply with these orders could result in civil penalties and major suppliers are expected to adhere to high standards of independence and ethical conduct, including those related to anti-bribery and anti-corruption, promoting human rights and principled business conduct. A breach of generally accepted ethical business standards or applicable anti-bribery and anti-corruption or competition statutes could adversely affect our business, performance, reputationoperations and financial condition.
Failure to manage our environmental impact could adversely affect our businesses and reputation.
Our businesses have an impact on the environment, principally through the use of energy and water, waste generation and, in our supply chain, through paper use and print and production technologies. Failure to manage our environmental impact could adversely affect our reputation.
Our impairment analysis
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As at December 31, 2017, goodwill on the consolidated statement of financial position amounted to £5,965 million and intangible assets with an indefinite life amounted to £112 million. We conduct an impairment test at least annually, which involves a comparison of the carrying value of goodwill and indefinite lived intangible assets by cash generating unit with estimated values in use based on latest management cash flow projections. The assumptions used in the estimation of value in use are, by their very nature, highly judgmental, and include profit growth of the business over a five year forecast period, the long term growth rate of the business thereafter, and related discount rates. There is no guarantee that our businesses will be able to achieve the forecasted results which have been included in the impairment tests and impairment charges may be required in future periods if we are unable to meet these assumptions.
8Contents
ITEM 4: INFORMATION ON THE GROUP
BUSINESS OVERVIEW
RELX PLC is a holding company. It owns 52.9% ofpublic limited company, incorporated in England under the shares of RELX Group plc.UK Companies Act 2006 (as amended) (the “Companies Act”).
RELX NV is a holding company. It owns 47.1% of the shares of RELX Group plc.
RELX Group is a global provider of informationinformation-based analytics and analyticsdecision tools for professional and business customers across industries. The Groupcustomers. RELX serves customers in more than 180 countries and has offices in about 40 countries. It employs approximately 31,000over 35,000 people, over 40% of whom almost half are in North America.
We operate in four major market segments: Risk; Scientific, Technical & Medical; Risk & Business Analytics; Legal; and Exhibitions.
| ● |
| Risk |
| ● | Scientific, Technical & Medical provides information and analytics that help institutions and professionals progress science, advance healthcare and improve performance. |
| ● | Legal |
| ● | Exhibitions |
Information on revenue by geographical market is set forth in note 2 to our consolidated financial statements under the heading “Revenue, operating profit and segment analysis” on page 168 to 171 of the RELX Annual Report and Financial Statements 2022 and incorporated herein by reference to Exhibit 15.2.
| Revenue Year ended December 31, | ||||||||||||||||||||||||
| 2017 | 2016 | 2015 | ||||||||||||||||||||||
| (in millions, except percentages) | ||||||||||||||||||||||||
Scientific, Technical & Medical | £ | 2,478 | 34 | % | £ | 2,320 | 34 | % | £ | 2,070 | 35 | % | ||||||||||||
Risk & Business Analytics | 2,076 | 28 | 1,906 | 28 | 1,601 | 27 | ||||||||||||||||||
Legal | 1,692 | 23 | 1,622 | 23 | 1,443 | 24 | ||||||||||||||||||
Exhibitions | 1,109 | 15 | 1,047 | 15 | 857 | 14 | ||||||||||||||||||
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Total | £ | 7,355 | 100 | % | £ | 6,895 | 100 | % | £ | 5,971 | 100 | % | ||||||||||||
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| | Revenue Year ended December 31, |
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| | 2019 |
| 2020 |
| 2021 |
| 2022 |
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| | | (in millions, except percentages) |
| |||||||||||||||||
Risk |
| £ | 2,316 |
| 29 | % | £ | 2,417 |
| 34 | % | £ | 2,474 |
| 34 | % | £ | 2,909 |
| 34 | % |
Scientific, Technical & Medical | |
| 2,637 |
| 34 |
| | 2,692 |
| 38 |
| | 2,649 |
| 37 |
| | 2,909 |
| 34 | |
Legal | |
| 1,652 |
| 21 |
| | 1,639 |
| 23 |
| | 1,587 |
| 22 |
| | 1,782 |
| 21 | |
Exhibitions | |
| 1,269 |
| 16 |
| | 362 |
| 5 |
| | 534 |
| 7 |
| | 953 |
| 11 | |
Total | | £ | 7,874 |
| 100 | % | £ | 7,110 |
| 100 | % | £ | 7,244 |
| 100 | % | £ | 8,553 |
| 100 | % |
RISK
The information set forth under the headings ‘Business Overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 12 to 13 of the RELX Annual Report and Financial Statements 2022 is incorporated herein by reference to Exhibit 15.2.
SCIENTIFIC, TECHNICAL & MEDICAL
The information set forth under the headings ‘Business Overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 1416 to 17 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 is incorporated herein by reference to Exhibit 15.2.
RISK & BUSINESS ANALYTICS12
LEGAL
The information set forth under the headings ‘Business Overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 20 to 2321 of the Group’sRELX Annual ReportsReport and Financial Statements 2017 is incorporated herein by reference to Exhibit 15.2.
LEGAL
The information set forth under the headings ‘Business Overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 28 to 31 of the Group’s Annual Reports and Financial Statements 20172022 is incorporated herein by reference to Exhibit 15.2.
EXHIBITIONS
The information set forth under the headings ‘Business Overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 3424 to 3725 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 is incorporated herein by reference to Exhibit 15.2.
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ORGANISATIONAL STRUCTURE
RELX PLC is a publicly-traded holding companypublicly held entity with its shares listed on the London, and New York stock exchanges. Its principal asset is the shares it owns in RELX Group plc, which represent a 52.9% ownership interest in RELX Group plc.
RELX NV is a publicly-traded holding company with its shares listed on the Euronext Amsterdam and New York stock exchanges. Its principal asset is the shares it owns in RELX Group plc, which represent a 47.1% ownership interest in RELX Group plc.
RELX Group plc holds all the operating businesses, subsidiaries, interests in associates and joint ventures and financing activities of RELX Group, a global provider of information and analytics for professional and business customers across industries.
Trading on the New York Stock Exchange is in the form of American Depositary Shares (ADSs)(“ADSs”) evidenced by American Depositary Receipts (ADRs)(“ADRs”) issued by Citibank N.A., as depositary.
A further description of our corporate structure as of December 31, 2017 is contained in note 1 to our consolidated financial statements as set forth on page 122 and under the heading ‘Corporate structure’ on page 71 of the Group’s Annual Reports and Financial Statements 2017 and incorporated herein by reference to Exhibit 15.2, including RELX PLC and RELX NV’s equal voting interests in RELX Group plc.
We are proposing a set of measures that will further simplify our corporate structure into a single parent company. We believe this is a natural next step for RELX Group, removing complexity and increasing transparency. The changes will be cost and profit neutral on an ongoing basis and will not impact the economic interests of any shareholder. RELX NV shareholders will receive one new RELX PLC share in exchange for each RELX NV share held and, following the additional listing of RELX PLC shares on Euronext Amsterdam noted below, will have the option of trading new RELX PLC shares on Euronext Amsterdam, quoted and traded in euros, and receive dividend payments in euros. RELX PLC will continue to have a premium listing on the London Stock Exchange and we will be applying for an additional listing of RELX PLC on Euronext Amsterdam. RELX NV ADRs will be convertedone-for-one to RELX PLC ADRs which will continue to be listed on the New York Stock Exchange. There will be no changes to the locations, activities or staffing levels of RELX Group or its four business areas. The simplification is subject to the approval of both RELX PLC and RELX NV shareholders. We expect a circular to be sent to shareholders in Q2 2018, with implementation in Q3 2018.
Further information is set out in consolidated financial statements set forth under the section ‘Corporate Governance’ on pages 70 and 71 of the Group’s Annual Reports and Financial Statements 2017 and is incorporated herein by reference to Exhibit 15.2.
Significant Subsidiaries, Associates, Joint Ventures and Business Units
A list of significant subsidiaries, associates, joint ventures and business units is included as Exhibit 8.0 to this Annual Report on Form20-F.
HISTORY AND DEVELOPMENT
Introduction
RELX NVPLC was originally incorporated in 1880 and RELX PLC in 1903. In 1993, theyRELX PLC combined with RELX NV by contributing their respective businesses by contributing them tointo two jointly owned companies. In 2015, the structure was simplified so that all of the businesses are nowwere owned by one jointly ownedcontrolled company, RELX Group plc. In 2018, the structure was further simplified whereby RELX NV merged into RELX PLC to form a single parent company, RELX NV andPLC. RELX PLC owns 100% of the shares in RELX Group plc, (and its subsidiaries, associates and joint ventures) are together known as RELX Group. As partwhich in turn owns all of the 2015 simplification, a bonus issueoperating businesses, subsidiaries and financing activities of RELX NV shares was made such that, since the 2015 bonus issue, one RELX PLC ordinary share confers an equivalent economic interest to one RELX NV ordinary share.Group.
Material acquisitions and disposals
Total cash spent on acquisitions in the three years ended December 31, 2017,2022, was £715£1,596 million. Cash spent on acquisitions (including debt in 2017acquired businesses) in 2020 was £141£874 million, (2016: £367 million; 2015: £207 million)in 2021 was £262 million and in 2022 was £460 million, excluding borrowings in acquired businesses of £3 million in 2020, nil in 2021 and £3 million in 2022 and including deferred consideration of £13£5 million (2016: £24 million; 2015: £25 million)in 2020, £19 million in 2021 and £21 million in 2022 on past acquisitions and spendinvestments in joint ventures and associates of nil in 2020 and 2021 and £58 million in 2022. Spend on venture capital investments of £10was £2 million (2016: £6 million; 2015: £16 million). Acquisition payments in respect ofnon-controlling interests2020, £8 million in 2017 were nil (2016: nil; 2015: nil).2021 and £8 million in 2022.
Net cash inflow in relation tofrom disposals made in 2017, after timing differences and separation and transaction costs was £34£29 million (2016: £13in 2020, £190 million paid; 2015: £34in 2021 and £3 million received).in 2022.
Capital expenditure
Capital expenditure on property, plant, equipment and internally developed intangible assets principally relates to the development of electronic products and investment in systems infrastructure, computer equipment and office facilities. Total
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such capital expenditure, which was financed using cash flows generated from operations, amounted to £354£364 million, £337 million and £436 million in 2017 (2016: £333 million; 2015: £307 million).2020, 2021 and 2022, respectively. The majority of capital expenditure is incurred in the United States, the United Kingdom and the Netherlands. In 2017,2022, there was continued investment in new products and related infrastructure, particularly in Legal and in Scientific, Technical & Medical.infrastructure. Further information on capital expenditure is included in notes 2, 1614 and 1816 to the consolidated financial statements under the headings
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‘Revenue, operating profit and is set forthsegment analysis’, ‘Intangible assets’ and ‘Property, plant and equipment’ on pages 124, 143168, 185 and 146188 respectively of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
Principal executive offices
The principal executive officesoffice of RELX PLC areis located at1-3 Strand, London WC2N 5JR, England. Tel: +44 20 7166 5500. The principal executive officesoffice of RELX NV are located at Radarweg 29, 1043 NX Amsterdam, the Netherlands. Tel: +31 20 485 2222. The principal executive offices of RELX Group plc are located at1-3 Strand, London, WC2N 5JR, England. Tel: +44 20 7166 5500. The principal executive officePLC located in the United States is at 230 Park Avenue, New York, New York, 10169. Tel: +1 212 309 8100. Our internet address is www.relx.com. The information on our website is not incorporated by reference into this report.Annual Report on Form 20-F.
Our agent in the United States is Kenneth Thompson II, Corporate General Counsel, Intellectual Property, Privacy and Governance, RELX Group;RELX; kenneth.thompson@relx.com, 9443 Springboro Pike, B4/F5/S14, Miamisburg, Ohio, 45342.
PROPERTY, PLANT AND EQUIPMENT
We own or lease approximately 269202 properties around the world.world as at December 31, 2022. The table below identifies the principal owned and leased properties in our property portfolio.portfolio as at December 31, 2022.
| | | | | ||
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| Floor space | ||||
Location | Principal use(s) | (square feet) | ||||
Owned properties | ||||||
Alpharetta, Georgia | Office and data centre | 406,000 | ||||
| ||||||
| Office | 105,000 | ||||
Leased properties | ||||||
Miamisburg, Ohio | Office and data centre | 267,480 | ||||
Sutton, England | Office | 191,960 | ||||
Amsterdam, Netherlands | Office | 180,021 | ||||
Raleigh, North Carolina | Office | 120,000 | ||||
Horsham, Pennslyvania | Office | 120,000 | ||||
New York, New York | ||||||
| Office | |||||
| ||||||
| 116,541 |
All of the above properties are substantially occupied by RELX with the exception of the New York, New York property which has been subleased to new tenants and no longer houses any RELX staff.RELX.
No property owned or leased by us which is considered material to us taken as a whole is presentlycurrently subject to liabilities relating to environmental regulations and none has major encumbrances.
INTELLECTUAL PROPERTY
Our products and services include and utilise intellectual property content delivered through a variety of media, including online, journals and books. We rely on trademark, copyright, patent, trade secret and other intellectual property laws, as well as in some cases licensing arrangements with third parties, to establish and protect our proprietary rights in these products and services.
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GOVERNMENT REGULATION
Certain of our businesses provide authorised customers with products and services such as access to public records and other information on individuals. Our businesses that provide such products and services are subject to applicableincreasing and evolving privacy, storage and transfer of data, data protection and consumer information laws and regulations, including US federal and state laws and regulations, UK laws and regulations, applicable to jurisdictions that follow EU laws and regulations and laws and regulations of the EU member state regulation.states. Our compliance obligations vary, and may include, among other things, strictreasonable data security programmes, submissions of regulatory reports, data localisation, providing consumersindividuals with certain notices and in some instances, limiting data or correcting inaccuracies in reports available through our products. From time to time, we respond in the ordinary course to inquiries and investigations from regulators who are charged with enforcing the laws and regulations applicable to our businesses. We are also subject to the terms of consent decrees and other settlements with certain regulators in the US.United States. See “Item 8: Financial Information — Legal Proceedings” on page 41..
Section 219 of the US Iran Threat Reduction and SyrianSyria Human Rights Act of 2012 (the “ITRA”(“ITRA”), which added Section 13(r) to the Securities Exchange Act, of 1934, as amended (the “Exchange Act”), requires disclosures regarding certain activities relating to Iran or with persons designated pursuant to various U.S.US Presidential Executive Orders. These disclosures are required even where the activities, transactions or dealings were conducted in compliance with applicable law. We engage in a limited amount of activity with Iran (a) through ournon-U.S. non-US affiliates and businesses, as well as (b) pursuant to authorisations — in the form of exemptions or licenses — issued by the U.S.US government. We anticipate that similar transactions or dealings may occur in the future. The ownership or control of our customers in Iran is often difficult to determine with certainty.
11
During 2017,
2022,
| ● | our Scientific, Technical & Medical business |
| ● | our Risk |
| ● | our Exhibitions business provided |
Numerous Iranian nationals attended conferences organised by our Exhibitions and Risk & Business Analytics businesses.business areas. Individuals located in Iran also subscribed to or purchased certain of our scientific, medical and technical publications. Many of these individuals are researchers, doctors or other professionals who have obtained subscriptions or purchased publications in their individual capacity, but who may be employed by government agencies in Iran or by hospitals, universities or other entities owned or controlled by the government of Iran. In addition, we work with authors, other contributors and journal editorial board members who are located in Iran, many of whom are employed at hospitals, universities or research institutions that are owned or controlled by the government of Iran. We also sometimes receive payments from authors located in Iran who pay us to make their articles publicly available. From time to time, we may employ or engage individuals in Iran to assist with transactions in Iran.
Our aggregate gross revenue attributable to these Iran-related activities was approximately £1.5 million during the fiscal year ended December 31, 2017 attributable to these Iran-related activities was approximately £13.5 million2021 compared to £11.8£1.8 million in 2016.during the fiscal year ended December 31, 2022. We do not customarily allocate net profit on asubscription-by-subscription, individual customer orcountry-by-country basis. However, we estimate that our net profit during the fiscal year ended December 31, 2017 attributable to these activities was 0.18%0.02% of our net profit reported in our income statement for the fiscal year ended December 31, 20172021 compared to 0.17%0.02% for the fiscal year ended December 31, 2016.2022.
Entities that Purchased from Ourtransacted with our Scientific, Technical & Medical Business Area in 20172022
Ahvaz JundishapurAbadan University of Medical Sciences, AjaAgricultural Biotechnology Research Institute of Iran, Agricultural Research Education and Extension Organization, Ahvaz Jondishapour University of Medical Sciences, Alborz University of Medical Sciences, Allameh Tabatabai University, Alzahra University, Amirkabir University of Technology, ArakArdebil University of Medical Sciences, ArdabilBabol Noshirvani University of Medical Sciences,Technology, Babol University of Medical Science, Birjand University of Medical Sciences, Bojnourd University, Boushehr University of Medical Sciences, Buali Sina University, Faculty of Agriculture, Fasa University of Medical Science, Ferdowsi University of Mashhad, Golestan University of Medical Sciences and Health Services, GonabadGorgan University of MedicalAgricultural Sciences Guilanand Natural Resources, Hakim Sabzevari University, of Medical Sciences, Hamedan University of Medical Science, Health and Biomedical Information Network, HormozganHamadan University of Medical Sciences, Ilam University, Ilam University of Medical Sciences, Imam Hosein Hospital, Imam Khomeini Hospital, Imam Khomeini International University, Institute for Research in Fundamental Sciences, Iran Polymer and Petrochemical Institute, Iran University of Medical Sciences, Iran University of Science and Technology, Iranian Meteorological Organisation,Fisheries
15
Science Research Institute, Iranian Research InstituteOrganization for Scientific InformationScience and Documentation,Technology, Isfahan University of Medical Sciences, Isfahan University of Technology, Islamic World Science Citation Center, JahromAzad University, of Medical Science, Jiroft University of Medical Sciences, Kashan University of Medical Sciences, Kerman University of Medical Sciences, Kermanshah University of Medical Sciences, Kharazmi University, KN Toosi University of Technology, Kurdistan University of Medical Sciences, Library Kermanshah Universty of Medical Sciences & Health Services, Lorestan University of Medical Sciences, Maragheh University of Medical Sciences, Mashhad University of Medical Sciences, Mazandaran University of Medical Sciences, Medical University of Dezful, National Centre for Scientific Research, National Institute for Genetic Engineering and Biotechnology, North KhorasanPersian Gulf University, of Medical Sciences, Parsian Medical Bookshop, PasteurRazi University, Research Institute of Iran, Qazvin University of Medical Sciences, Qom University of Medical Sciences and Health Services, Rafsanjan University of Medical Sciences,Petroleum Industry, Sabzevar University of Medical Sciences, School of Medicine & Affiliated Hospitals, School of Public Health, Semnan University, Semnan University of Medical Sciences and Health Services, Shahed University Faculty of Medical Sciences, ShaheedShahid Bahonar University of Kerman, Shahid Beheshti University, Shahid Beheshti University of Medical Sciences, Shahid Sadoughi University of Medical Sciences and Health Services, Shahrekord University, ShahrekordShahrood University of Medical Science, ShahroudTechnology, Sharif University of Medical Sciences, Shariati Hospital,Technology, Shiraz University, Shiraz University of Medical Sciences, Tabriz University of Medical Sciences, Tarbiat Modares University, Tehran University of Medical Sciences, University of Art,Hormozgan, University of Isfahan,Kashan, University of Mazandaran, University of Sistan and Baluchestan, University of Social Welfare and Rehabilitation Science,Mohaghegh Ardabili, University of Tabriz, University of Tehran, University of Zabol, University of Zanjan, Urmia University, Urmia University of Medical Sciences, Yasooj University of Medical Sciences Kohkiloyeh, Zabol University of Medical Sciences, Zahedan University of Medical Sciences, Zanjan University of Medical Sciences
Entities that Purchased from Ourtransacted with our Risk & Business Analytics BusinessArea in 20172022
Abadan Petrochemical Company, Amir Kabir Petrochemical Company, Arya Sasol Polymer Company, Bakhtar Commercial Company, Bandar Imam Petrochemical Company, Behran Oil Company, Bistoun Petrochemical Company, Bouka Holding Company, Dana Polymer Company, Esfahan Petrochemical Company Inc, Excell Worldwide DMCC,
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Fanavaran Petrochemical Company, Farabi PetrochemicalIran Chemical Industries Investment Company, Ghadeer Petrochemical Company, Ghaed Bassir Petrochemical Company, Iranian Chemical Parks Development, Jam Petrochemical Company, Jam Polypropylene Company, Kangan Petro-Refining Company, KGT Oil,Complex, Kharg Petrochemical Company, Ltd, KhorasanLaleh Petrochemical Company, Kian Petrochemicals Company, Kimyagaran Emrooz Chemical Industries, Morvarid Petrochemical Company, National Petrochemical Company, Pars Oil Company, Persian Gulf Petrochemical Industry Commercial Company, Petrochemical Commercial Company, Petrochemical Commercial Company International LTD (PCCI), Polynar Corporation, Sepahan Oil Company, Shahid Tondgooyan Petrochemical Company, Shazand Petrochemical Company, Sherkat Azarvan Sahami Khass, Tabriz Petrochemical Company, TOPCO, Yas Banafsh Tehran Trading Company, Zagros Petrochemical CompanySPI International Proprietary
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16
ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion does not address certain items in respect of our fiscal year ended December 31, 2020 in reliance on amendments to disclosure requirements adopted by the SEC in 2019. A discussion of our fiscal year ended December 31, 2020 may be found in “Item 5: Operating and Financial Review and Prospects” of our Annual Report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC on February 17, 2022.
OPERATING RESULTS — THE GROUP
The following discussion is based on the consolidated financial statements of the Group for the threetwo years ended December 31, 2017, 20162021 and 20152022 which have been prepared in accordance with IFRS as issued by the IASB and as adopted by the EU.IASB.
The following discussion should be read in conjunction with, and is qualified by reference to, the consolidated financial statements set forth on pages 117162 to 164204 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
The following tables analyse the Group’s revenue in each of the threetwo years ended December 31, 2017, 20162021 and 20152022 by type, format and geographic market. We derive our revenue principally from subscriptions transactional and advertisingtransactional sales. Transactional sales includesinclude revenue from exhibitions. For additional information, see note 2 to the consolidated financial statements set forthunder the heading ‘Revenue, operating profit and segment analysis’ on pages 124 and 125168 to 171 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
Revenue by type
Year ended December 31,
| | | | | | | | | | | |
| | 2021 |
| 2022 |
| ||||||
| | (in millions, except percentages) |
| ||||||||
Subscriptions | | £ | 4,214 |
| 58 | % | £ | 4,655 |
| 54 | % |
Transactional | |
| 3,030 |
| 42 | | | 3,898 |
| 46 | |
Total | | £ | 7,244 |
| 100 | % | £ | 8,553 |
| 100 | % |
| 2017 | 2016 | 2015 | ||||||||||||||||||||||
| (in millions, except percentages) | ||||||||||||||||||||||||
Subscriptions | £ | 3,808 | 52 | % | £ | 3,618 | 52 | % | £ | 3,123 | 52 | % | ||||||||||||
Transactional | 3,449 | 47 | 3,163 | 46 | 2,736 | 46 | ||||||||||||||||||
Advertising | 98 | 1 | 114 | 2 | 112 | 2 | ||||||||||||||||||
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Total | £ | 7,355 | 100 | % | £ | 6,895 | 100 | % | £ | 5,971 | 100 | % | ||||||||||||
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Revenue by format
Year ended December 31,
| | | | | | | | | | | |
| | 2021 | | 2022 | | ||||||
| | (in millions, except percentages) | |||||||||
Electronic | | £ | 6,230 |
| 86 | % | £ | 7,112 |
| 83 | % |
Face-to-face | |
| 500 |
| 7 |
| | 912 |
| 11 | |
|
| 514 |
| 7 |
| | 529 |
| 6 | | |
Total | | £ | 7,244 |
| 100 | % | £ | 8,553 |
| 100 | % |
| 2017 | 2016 | 2015 | ||||||||||||||||||||||
| (in millions, except percentages) | ||||||||||||||||||||||||
Electronic | £ | 5,399 | 74 | % | £ | 4,954 | 72 | % | £ | 4,179 | 70 | % | ||||||||||||
Face-to-face | 1,122 | 15 | 1,066 | 15 | 886 | 15 | ||||||||||||||||||
| 834 | 11 | 875 | 13 | 906 | 15 | |||||||||||||||||||
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Total | £ | 7,355 | 100 | % | £ | 6,895 | 100 | % | £ | 5,971 | 100 | % | ||||||||||||
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Revenue by geographic market
Year ended December 31,
| | | | | | | | | | | | ||||||||||||||||||||||||
| | 2021 |
| 2022 |
| ||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||
| | (in millions, except percentages) |
| ||||||||||||||||||||||||||||||||
North America | £ | 4,081 | 56 | % | £ | 3,778 | 55 | % | £ | 3,215 | 54 | % | | £ | 4,321 |
| 60 | % | £ | 5,101 |
| 60 | % | ||||||||||||
United Kingdom | 522 | 7 | 504 | 7 | 461 | 8 | |||||||||||||||||||||||||||||
The Netherlands | 92 | 1 | 118 | 2 | 117 | 2 | |||||||||||||||||||||||||||||
Rest of Europe | 1,081 | 15 | 1,091 | 16 | 958 | 16 | |||||||||||||||||||||||||||||
Europe | | | 1,472 |
| 20 |
| | 1,800 |
| 21 | | ||||||||||||||||||||||||
Rest of world | 1,579 | 21 | 1,404 | 20 | 1,220 | 20 | | | 1,451 |
| 20 |
| | 1,652 |
| 19 | | ||||||||||||||||||
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| ||||||||||||||||||||||||||||||
Total | £ | 7,355 | 100 | % | £ | 6,895 | 100 | % | £ | 5,971 | 100 | % | | £ | 7,244 |
| 100 | % | £ | 8,553 |
| 100 | % | ||||||||||||
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The cost profile of individual businesses within the Group varies widely and costs are controlled on an individual business unit basis. Our most significant cost item is staff costs which increased from £2,549 million in 2021 to £2,906 million in 2022.
17
The following tables show revenue and adjusted operating profit for each of our business segments in each of the threetwo years ended December 31, 2017, 20162021 and 20152022 together with the percentage change in 20172021 and 20162022 at both actual and constant currencies. The effect of currency movements on the 20172022 results is further described separately below (see “— Effect of Currency Translation” on page 23)25). Adjusted operating profit is included on the basis that it is the key segmental
14
profit measure used by management to evaluate performance and allocate resources to the business segments, as reported under IFRS8: Operating SegmentsIFRS 8 — ‘Operating Segments’ in note 2 to the consolidated financial statements set forthunder the heading ‘Revenue, operating profit and segment analysis’ on pages 124 and 125168 to 171 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2. Adjusted operating profit represents operating profit before amortisation of acquired intangible assets and acquisition related costsacquisition-related items, and is grossed up to exclude the equity share of finance income, finance costs and taxes in joint ventures. A reconciliation of reported operating profit to adjusted operating profit is set out on page 16.20.
Revenue by segment, reported operating profit and adjusted operating profit by segment are as follows:
| | | | | | | | | | | |
| | Revenue for the year ended |
| ||||||||
| | December 31 |
| ||||||||
| | 2021 |
| 2022 |
| % change |
| ||||
| |
| |
| | |
| actual |
| constant |
|
| | | | | | | | rates | | rates(1) |
|
| | (in millions, except percentages) |
| ||||||||
Risk |
| £ | 2,474 |
| £ | 2,909 |
| +18 | % | +8 | % |
Scientific, Technical & Medical | | | 2,649 | | | 2,909 | | 10 | % | +4 | % |
Legal | | | 1,587 | | | 1,782 | | 12 | % | +5 | % |
Exhibitions | | | 534 | | | 953 | | +78 | % | +76 | % |
Total | | £ | 7,244 | | £ | 8,553 | | +18 | % | +11 | % |
| Revenue for the year ended December 31 | ||||||||||||||||||||||||||||
| 2017 | 2016 | % change | 2015 | % change | ||||||||||||||||||||||||
|
| actual rates | constant rates(1) |
| actual rates | constant rates(2) | ||||||||||||||||||||||
| (in millions, except percentages) | ||||||||||||||||||||||||||||
Scientific, Technical & Medical | £ | 2,478 | £ | 2,320 | +7 | % | +2 | %�� | £ | 2,070 | +12 | % | +2 | % | ||||||||||||||
Risk & Business Analytics | 2,076 | 1,906 | +9 | % | +4 | % | 1,601 | +19 | % | +8 | % | |||||||||||||||||
Legal | 1,692 | 1,622 | +4 | % | -1 | % | 1,443 | +12 | % | +2 | % | |||||||||||||||||
Exhibitions | 1,109 | 1,047 | +6 | % | +1 | % | 857 | +22 | % | +9 | % | |||||||||||||||||
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| |||||||||||||||||||||||
Total | £ | 7,355 | £ | 6,895 | +7 | % | +2 | % | £ | 5,971 | +15 | % | +4 | % | ||||||||||||||
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| |||||||||||||||||||||||
| | | | | | | | | |
| | Reported operating profit for |
| ||||||
| | the year ended December 31 |
| ||||||
| | 2021 | | 2022 | | % change |
| ||
| | | | | | | | actual |
|
| | | | | | | | rates |
|
| | (in millions, except percentages) | | ||||||
Reported operating profit |
| £ | 1,884 |
| £ | 2,323 |
| +23 | % |
| Reported operating profit for the year ended December 31 | ||||||||||||||||||||
| 2017 | 2016 | % change | 2015 | % change | ||||||||||||||||
|
| actual rates |
| actual rates | ||||||||||||||||
| (in millions, except percentages) | ||||||||||||||||||||
Reported operating profit | £ | 1,905 | £ | 1,708 | +12 | % | £ | 1,497 | +14 | % | ||||||||||
|
|
|
|
|
| |||||||||||||||
| Adjusted operating profit for the year ended December 31 | ||||||||||||||||||||||||||||
| 2017 | 2016 | % change | 2015 | % change | ||||||||||||||||||||||||
|
| actual rates | constant rates(1) |
| actual rates | constant rates(2) | ||||||||||||||||||||||
| (in millions, except percentages) | ||||||||||||||||||||||||||||
Scientific, Technical & Medical | £ | 913 | £ | 853 | +7 | % | +2 | % | £ | 760 | +12 | % | +2 | % | ||||||||||||||
Risk & Business Analytics | 759 | 686 | +11 | % | +6 | % | 575 | +19 | % | +8 | % | |||||||||||||||||
Legal | 332 | 311 | +7 | % | +1 | % | 274 | +13 | % | +2 | % | |||||||||||||||||
Exhibitions | 285 | 269 | +6 | % | +1 | % | 217 | +24 | % | +9 | % | |||||||||||||||||
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| |||||||||||||||
Subtotal | £ | 2,289 | £ | 2,119 | £ | 1,826 | ||||||||||||||||||||||
Unallocated items | (5 | ) | (5 | ) | (4 | ) | ||||||||||||||||||||||
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Total | £ | 2,284 | £ | 2,114 | +8 | % | +3 | % | £ | 1,822 | +16 | % | +4 | % | ||||||||||||||
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| | | | | | | | | | | |
| | Adjusted operating profit for the year ended December 31 |
| ||||||||
| | 2021 | | 2022 | | % change |
| ||||
| | | | | | | | actual | | constant |
|
| | | | | | | | rates |
| rates(1) |
|
|
| (in millions, except percentages) | | ||||||||
Risk |
| £ | 915 |
| £ | 1,078 |
| +18 | % | +7 | % |
Scientific, Technical & Medical |
| | 1,001 |
| | 1,100 |
| 10 | % | +4 | % |
Legal |
| | 326 |
| | 372 |
| +14 | % | +6 | % |
Exhibitions(2) |
| | 10 |
| | 162 |
| nm |
| nm | |
Subtotal |
| £ | 2,252 |
| £ | 2,712 |
|
|
|
| |
Unallocated central costs and other operating items(3) |
| | (42) |
| | (29) |
|
|
|
| |
Total |
| £ | 2,210 |
| £ | 2,683 |
| +21 | % | +14 | % |
| (1) | Represents percentage change in |
| (2) |
| (3) | In 2021, unallocated central costs and other operating items includes a £35m one-off charge relating to reductions in our corporate real estate footprint. In 2022, this includes a charge of £24m relating to STM incurred from exchange rate movements from the translation of working capital items such as accounts receivable and payable, and intercompany balances, into relevant functional currencies and the outcome of STM’s hedging program. The net effect of these amounts was higher in 2022 due to the extent and timing of exchange rate movements in the |
18
Non-GAAP financial measures
The GroupRELX 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 track the core operational performance of the Group by separating out items of income or expenditure relating to acquisitions, disposals and capital items, while providingand by excluding items treated as exceptional, when applicable. This provides our investors with a clear basis for assessing our ability to raise debt and invest in new business opportunities. In 2017, we have excluded the exceptional tax credit arising as a result of the US Tax Cuts and Jobs Act from our adjusted measures. RELX management
Management uses these financial measures, along with IFRS financial measures, in evaluating the operating performance of the Group as a whole and
15
of the individual business segments. Adjusted financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS. The measures may not be directly comparable to similarly reported measures by other companies.
The adjusted and underlying financial measures used in the results of operations discussion on pages 1821 to 2324 are: underlying revenue growth, adjusted operating profit, underlying adjusted operating profit growth, adjusted operating margin, underlying adjusted operating margin and adjusted net profit attributable to RELX PLCshareholders and RELX NV shareholders. adjusted earnings per share. These measures as well as certain other metrics are defined in the Glossary of Terms beginning on page S-1.
Underlying revenue growth rates are calculated at constant currencies. They exclude revenues from biennial and other cycling shows in exhibitions, revenues from businesses acquired and disposed of in both the year and prior year and revenues from assets held for sale. Underlying adjusted operating profit growth rates are calculated at constant currencies. They exclude operatingcurrencies, excluding the results from businesses acquiredof acquisitions until twelve months after purchase, and disposedexcluding the results of in both the yeardisposals and prior year, and operating results from assets held for sale. Underlying revenue growth rates also exclude the effects of exhibition cycling.
Adjusted operating profit excludes amortisation of acquired intangible assets acquisition related costs,and acquisition-related items, and is grossed up to exclude the equity share of finance income, finance costs and taxes in joint ventures.
Adjusted operating margin is calculated as adjusted operating profit as a percentage of reporteddivided by revenue. Underlying adjusted operating margin is calculated at constant currencies and excludes portfolio effects. These metrics are also defined in the glossary on pagesS-1 andS-2.
Adjusted net profit attributable to RELX PLC and RELX NV shareholders is reconciled to reported net profit attributable to RELX PLCshareholders and RELX NVadjusted earnings per share is shown to be calculated by dividing adjusted net profit attributable to shareholders by the total weighted average number of shares in note 1110 to the consolidated financial statements and is set forthunder the heading ‘Earnings per share’ on page 139182 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2. Reconciliations of all othernon-GAAP financial measures to the most directly comparable measure reported under IFRS are set forth in the tables below.
In the tables below and the results of operations commentary following,that follows, percentage movements are calculated using the average exchange rates for the period unless otherwise stated.
Adjusted operating profit reconciles to reported operating profit as follows:
| | | | | | |
|
| 2021 |
| 2022 | ||
| | (in millions) | ||||
Reported operating profit |
| £ | 1,884 |
| £ | 2,323 |
Adjustments: |
| |
|
| |
|
Amortisation of acquired intangible assets |
| | 298 |
| | 296 |
Acquisition-related items |
| | 21 |
| | 62 |
Reclassification of tax in joint ventures |
| | 7 |
| | 4 |
Reclassification of finance income in joint ventures |
| | — |
| | (2) |
Adjusted operating profit |
| £ | 2,210 |
| £ | 2,683 |
19
| 2017 | 2016 | 2015 | ||||||||||
| (in millions) | ||||||||||||
Reported operating profit | £ | 1,905 | £ | 1,708 | £ | 1,497 | ||||||
Adjustments: | ||||||||||||
Amortisation of acquired intangible assets | 314 | 346 | 296 | |||||||||
Acquisition related costs | 56 | 51 | 35 | |||||||||
Reclassification of tax in joint ventures | 10 | 10 | (6 | ) | ||||||||
Reclassification of finance income in joint ventures | (1 | ) | (1 | ) | – | |||||||
|
|
|
|
|
| |||||||
Adjusted operating profit | £ | 2,284 | £ | 2,114 | £ | 1,822 | ||||||
|
|
|
|
|
| |||||||
The calculations of theyear-on-year changes in reported revenue and underlying revenue growth are presented below:
| Revenue | ||||||||
| £m | % change | |||||||
Year to December 31, 2015 | 5,971 | +3 | % | |||||
|
|
|
| |||||
Underlying revenue growth(1) | 227 | +4 | % | |||||
Exhibition cycling | 30 | 0 | % | |||||
Acquisitions | 66 | +1 | % | |||||
Disposals | (60 | ) | -1 | % | ||||
Currency effects | 661 | +11 | % | |||||
|
|
|
| |||||
Year to December 31, 2016 | 6,895 | +15 | % | |||||
|
|
|
| |||||
Underlying revenue growth(1) | 251 | +4 | % | |||||
Exhibition cycling | (52 | ) | -1 | % | ||||
Acquisitions | 60 | +1 | % | |||||
Disposals | (150 | ) | -2 | % | ||||
Currency effects | 351 | +5 | % | |||||
|
|
|
| |||||
Year to December 31, 2017 | 7,355 | +7 | % | |||||
|
|
|
| |||||
| | | | | |
| | Revenue |
| ||
|
| £m |
| % change |
|
Year to December 31, 2020 |
| 7,110 |
| -10 | % |
Underlying revenue growth(1) |
| 481 |
| +7 | % |
Exhibition cycling |
| 48 |
| +1 | % |
Acquisitions |
| 47 |
| +1 | % |
Disposals |
| (28) |
| -1 | % |
Currency effects |
| (414) |
| -6 | % |
Year to December 31, 2021 |
| 7,244 |
| +2 | % |
Underlying revenue growth(1) |
| 656 |
| +9 | % |
Exhibition cycling |
| 106 |
| +2 | % |
Acquisitions |
| 38 |
| +0 | % |
Disposals |
| (34) |
| 0 | % |
Currency effects |
| 543 |
| +7 | % |
Year to December 31, 2022 |
| 8,553 |
| +18 | % |
| (1) |
16
The calculations of theyear-on-year changes in adjusted operating profit and underlying adjusted operating profit growth are presented below:
| Adjusted operating profit | ||||||||
| £m | % change | |||||||
Year to December 31, 2015 | 1,822 | +5 | % | |||||
|
|
|
| |||||
Underlying adjusted operating profit growth(1) | 100 | +6 | % | |||||
Acquisitions | 7 | 0 | % | |||||
Disposals | (33 | ) | -2 | % | ||||
Currency effects | 218 | +12 | % | |||||
|
|
|
| |||||
Year to December 31, 2016 | 2,114 | +16 | % | |||||
|
|
|
| |||||
Underlying adjusted operating profit growth(1) | 109 | +6 | % | |||||
Acquisitions | 7 | 0 | % | |||||
Disposals | (58 | ) | -3 | % | ||||
Currency effects | 112 | +5 | % | |||||
|
|
|
| |||||
Year to December 31, 2017 | 2,284 | +8 | % | |||||
|
|
|
| |||||
| | | | | |
| | Adjusted operating profit |
| ||
|
| £m |
| % change |
|
Year to December 31, 2020 |
| 2,076 |
| -17 | % |
Underlying adjusted operating profit growth(1) |
| 269 |
| +13 | % |
Acquisitions |
| 11 |
| +1 | % |
Disposals |
| (8) |
| -1 | % |
Currency effects |
| (138) |
| -7 | % |
Year to December 31, 2021 |
| 2,210 |
| +6 | % |
Underlying adjusted operating profit growth(1) |
| 326 |
| +15 | % |
Acquisitions |
| (6) |
| +0 | % |
Disposals |
| (14) |
| -1 | % |
Currency effects |
| 167 |
| +7 | % |
Year to December 31, 2022 |
| 2,683 |
| +21 | % |
| (1) |
17
Results of Operations for the Year Ended December 31, 20172022
Compared to the Year Ended December 31, 20162021
Reported revenue was £7,355up 18% from £7,244 million (2016: £6,895 million), up 7% (2016: 15%). The increase in reported revenue reflects good growth2021 to £8,553 million in electronic andface-to-face revenues, partially offset by continued print revenue declines.2022. Underlying revenue growth was 4% (2016: 4%)9%, with all four market segments contributing to underlying growth. The underlying growth rate reflects strong growth in electronic and face-to-face revenues, partially offset by continued print revenue declines. Risk continued to deliver strong growth, while both STM and Legal improved their growth rates. Exhibitions saw a strong recovery in revenue. Exhibition cycling effects had a positive impact on revenue, and neither acquisitions nor disposals had an impact on revenue. The impact of currency movements was to increase revenue growth by 7%.
Reported operating costs, which comprises of cost of sales, selling and distribution costs, and administration and other expenses, was £5,487were up 16% from £5,389 million (2016: £5,224 million), up 5% (2016: 15%).in 2021 to £6,249 million in 2022. Cost of sales were £2,631up 19% from £2,562 million (2016: £2,488 million), up 6% (2016: 17%) comparedin 2021 to 2016, slightly lower than the overall increase£3,045 million in revenue. Selling2022, selling and distribution costs were £1,163up 16% from £1,197 million (2016: £1,109 million), up 5% (2016: 15%)in 2021 to £1,385 million in 2022 and administration and other expenses were £1,693up 12% from £1,630 million (2016: £1,627 million), up 4% (2016: up 13%).in 2021 to £1,819 million in 2022. The increase reflects the
20
investment in global technology platforms, the launch of new products and services and the increased activity levels within Exhibitions, partially offset by the benefits of continued process innovation.
Reported operating profit, which includes amortisation of acquired intangible assets and acquisition related costs,acquisition-related items, was £1,905up 23% from £1,884 million (2016: £1,708 million), anin 2021 to £2,323 million in 2022 reflecting the increase of 12% (2016: 14%).
in adjusted operating profit. Adjusted operating profit was £2,284up 21% from £2,210 million (2016: £2,114 million), up 8% (2016: 16%), reflecting the benefit of tight cost control across the Group.in 2021 to £2,683 million in 2022.
The reported operating margin was 25.9% (2016: 24.8%).up from 26.0% in 2021 to 27.2% in 2022. The overall adjusted operating margin of 31.1%31.4% in 2022 was 0.40.9 percentage points higher than in the prior year. On an underlying basis, including cycling effects, the margin improved by 0.71.2 percentage points. Acquisitions and disposals reduced the marginpoints with portfolio changes reducing margins by 0.40.3 percentage points and currency effects increased the margin by 0.1 percentage points.being neutral on margins.
Depreciation of property, plant and equipment and amortisation of internally generateddeveloped intangible assets increased from £347 million in 2021 to £272£356 million. Depreciation of right-of-use assets decreased from £80 million (2016: £257 million).in 2021 to £63 million in 2022.
The amortisation charge in respect of acquired intangible assets, including the share of amortisation in joint ventures decreased from £298 million in 2021 to £314£296 million (2016: £346 million), primarily reflecting certain assets becoming fully amortised, partially offset by currency effectsin 2022, including an impairment of £13m in 2021 and acquisitions. Acquisition related costs were £56£1 million (2016: £51 million).in 2022.
Acquisition-related items amounted to a charge which increased from £21 million in 2021 to £62 million in 2022, as a result of increased acquisition activity and the absence of an offsetting gain of £27 million recognised in 2021. The 2021 gain resulted from the revaluation of a put and call option arrangement relating to a non-controlling interest in a subsidiary within Legal.
Reported net finance costs of £182increased from £142 million (2016: £195 million)in 2021 to £201 million in 2022 due to higher average interest rates and currency translation effects. This includes the net pension financing charge of £15which decreased from £9 million (2016: £14 million), and excludes finance income in joint ventures of £12021 to £5 million (2016: £1 million). The decrease primarily reflects a lower average interest rate on borrowings, partly offset by currency translation effects.
Reported gain on disposals and othernon-operating items was £11 million (2016: £40 million loss) arising largely from the sale of certain Risk & Business Analytics businesses and revaluation of investments held. These gains were offset by an associated tax credit of £16 million (2016: £34 million tax credit).in 2022.
Reported profit before tax was £1,734up 18% from £1,797 million (2016: £1,473 million). in 2021 to £2,113 million in 2022 reflecting a gain on disposals and other non-operating items of £55 million in 2021 compared to a net loss on disposals and other non-operating items of £9m in 2022, mainly relating to the ventures portfolio and the higher acquisition related costs, which increased from £21 million in 2021 to £62 million in 2022 as a result of increased acquisition activity and the absence of an offsetting gain of £27 million recognised in 2021.
The reported tax charge was £67m (2016: £304m).increased from £326 million in 2021 to £481 million in 2022 including tax associated with the amortisation of acquired intangible assets, disposals and other non-operating items. The decrease in2021 charge reflected the benefit of tax charge is due tocredits arising from the US Tax Cuts and Jobs Act, which includes a reduction in the federal corporatesubstantial resolution of prior year tax matters. The UK corporation tax rate will increase from 35%19% to 21%25% from January 2018. Consequently, the Group has measured its US deferred tax assets and liabilities at the end of the reporting period at a combined tax rate (including state taxes) of 26%. This resulted in the recognition of an exceptional tax credit of £346m in the income statement.April 1, 2023.
The reported net profit attributable to RELX PLC and RELX NV shareholders of £1,659 million (2016: £1,161 million) was up 43% (2016: 15%).11% from £1,471 million in 2021 to £1,634 million in 2022. The adjusted net profit attributable to RELX PLC and RELX NV shareholders of £1,635 million (2016: £1,488 million) was up 10% (2016: 17%).16% from £1,689 million in 2021 to £1,961 million in 2022.
The reported earnings per share for RELX PLC was 82.2p (2016: 56.3p) and for RELX NV was €0.936 (2016: €0.687). The high growthincreased by 12% from 76.3p in the year reflects the impact of the exceptional tax credit recognised as a result of the US Tax Cuts and Jobs Act.
2021 to 85.2p in 2022. Adjusted earnings per share were up 12% at 81.0p (2016: 72.2p) when expressedincreased by 17% from 87.6p in sterling and 5% at €0.923 (2016: €0.880) when expressed2021 to 102.2p in Euros.2022. At constant currencies,rates of exchange, adjusted earnings per share increased by 7%10%.
Until the end of 2015 the equalisation of dividends between RELX PLC and RELX NV took into account the prevailing tax credit that was available to certain UK tax payers at that time. The tax credit was also taken into account in the determination of reported earnings per share. The UK dividend tax credits were abolished with effect from April 6, 2016, impacting dividends paid after this date. As a result of the abolition of this tax credit, from 2016 reported earnings per share have the same value for each RELX PLC and RELX NV share.
Ordinary dividends paid to shareholders in the year,2021, being the 20162020 final and 20172021 interim dividends,dividend, amounted to £762 million (2016: £683 million).£920 million. Ordinary dividends paid to shareholders in 2022, being the 2021 final and 2022 interim dividend, amounted to £983 million.
The final dividendsdividend proposed by the respective Boards are 27.7pBoard increased from 35.5p in 2021 to 38.9p per share for RELX PLC and €0.316 per share for RELX NV, 8% and 5% higher respectively compared with the prior year final dividends. This gives totalin 2022. Total dividends for the year of 39.4p (2016: 35.95p) and €0.448 (2016: €0.423). The differenceincreased from 49.8p in growth rates2021 to 54.6p in the final dividends reflects changes in the euro:sterling exchange rate since the prior year final dividend announcement date.2022.
18
During 2017,2022, a total of 44.521.7 million RELX PLC and RELX NV shares were repurchased. Total consideration for these repurchases was £700£500 million. A further 1.22.2 million RELX PLC shares and 1.3 million RELX NV shares were purchased by the Employee Benefit Trust. During 2017, 22.52022, 52 million RELX PLC and 22 million RELX NV shares held in treasury were cancelled. As at December 31, December 2017,2022, total shares in issue, for RELX Group, net of shares held in treasury and shares held by the
21
Employee Benefit Trust, amounted to 2,004 million; represented by 1,060 million RELX PLC shares and 944 million RELX NV shares.1,909.5 million. A further 3.36.3 million RELX PLC shares and 2.9 million RELX NV shares have been repurchased in 20182023 as at February 14, 2018.15, 2023.
Risk: 2022 financial performance
| | | | | | | | | | | | | |
|
| 2021 |
| 2022 |
| Underlying |
| Portfolio |
| Currency |
| Total |
|
| | £m | | £m | | growth | | changes | | effects | | growth | |
Revenue | | 2,474 | | 2,909 | | +8 | % | 0 | % | +10 | % | +18 | % |
Adjusted operating profit |
| 915 |
| 1,078 |
| +8 | % | -1 | % | +11 | % | +18 | % |
Strong fundamentals driving underlying revenue growth.
Reported revenue growth was +18%. Underlying revenue growth remained strong at +8%. Underlying adjusted operating profit growth was slightly ahead of underlying revenue growth, leading to a modest improvement in adjusted operating margin, with minor dilution from recent acquisitions offset by small positive currency movements.
In Business Services, which represents around 45% of divisional revenue, strong growth was driven by Financial Crime & Compliance and fraud prevention analytics and decision tools, with digital identity solutions growing particularly strongly. Business Risk & Alternative Credit also grew strongly.
In Insurance, which represents just under 40% of divisional revenue, momentum improved over the course of the year. In auto insurance, driving patterns and claims improved from the beginning of the year, whilst other market factors, including shopping activity, saw improving trends during the second half. New sales continued to grow strongly.
Specialised Industry Data Services, which represents just over 10% of divisional revenue, delivered strong growth, with improved growth trends across segments. Commodity intelligence was particularly strong and aviation returned to historical growth trends.
In Government, strong growth was driven by the continued development and roll-out of analytics and decision tools.
Scientific, Technical & Medical: 20172022 financial performance
| | | | | | | | | | | | | |
|
| 2021 |
| 2022 |
| Underlying |
| Portfolio |
| Currency |
| Total |
|
| | £m | | £m | | growth | | changes | | effects | | growth | |
Revenue | | 2,649 | | 2,909 | | +4 | % | 0 | % | +6 | % | +10 | % |
Adjusted operating profit |
| 1,001 |
| 1,100 |
| +5 | % | -1 | % | +6 | % | +10 | % |
| 2017 £m | 2016 £m | Underlying growth | Acquisitions/ disposals | Currency effects | Total growth | |||||||||||||||||||
Revenue | 2,478 | 2,320 | +2 | % | 0 | % | +5 | % | +7 | % | ||||||||||||||
Adjusted operating profit | 913 | 853 | +3 | % | -1 | % | +5 | % | +7 | % | ||||||||||||||
Key business trends remained positive in 2017, with underlying profit growth slightly exceedingFurther development of analytics continuing to drive improved underlying revenue growth.
Underlying revenue growth was +2%. Reported revenue growth was +7%+10%. The difference betweenUnderlying revenue growth improved to +4%, driven by further evolution of the reportedbusiness mix, with the higher growth segments representing an increasing proportion of divisional revenue, and electronic formats now representing around 90% of overall revenue.
Underlying adjusted operating profit growth was +5%, slightly ahead of underlying revenue growth, rates primarily reflectsleading to unchanged margins after minor dilution from recent acquisitions and small negative currency movements.
Databases, Tools & Electronic Reference, and Corporate Primary Research, which together represent around 45% of divisional revenue, delivered strong growth across research, clinical, and commercial markets, driven by content development and high value analytics and decision tools.
In Primary Research academic & government segments, which also represent around 45% of divisional revenue, growth was driven by higher volumes of articles submitted and published, with pay-to-publish open access articles growing particularly strongly, and by increasingly sophisticated analytics and evolving technology platforms.
22
Legal: 2022 financial performance
| | | | | | | | | | | | | |
|
| 2021 |
| 2022 |
| Underlying |
| Portfolio |
| Currency |
| Total |
|
| | £m | | £m | | growth | | changes | | effects | | growth | |
Revenue | | 1,587 | | 1,782 | | +5 | % | 0 | % | +7 | % | +12 | % |
Adjusted operating profit |
| 326 |
| 372 |
| +8 | % | -2 | % | +8 | % | +14 | % |
Further improvement in underlying revenue growth driven by legal analytics.
Reported revenue growth was +12%. Underlying revenue growth improved to +5%, driven by the impactcontinuing shift in business mix as legal analytics drives higher growth in electronic revenue, which now represents almost 90% of exchange rate movements and portfolio changes, including the acquisition of Plum Analytics and bepress, and the disposal of certain international pharma promotion assets.divisional total.
Underlying adjusted operating profit growth of +3%+8% was slightly ahead of underlying revenue growth, withdriving a small underlying40 basis point improvement in adjusted operating margin improvementafter minor dilution from portfolio changes was partly offset by exchange rate movements and portfolio effects. Adjusted operating profit growth was +7%.small positive currency movements.
Electronic revenues saw continued good growth, partially offset by further print declines. In primary research we continued to enhance customer value by providing broader content sets across our research offering, increasing the sophistication of our analytics, and evolving our technology platforms. DatabasesLaw firms & tools continued to drive growth across market segments through the launch of enhanced functionality and content development.
Print books,corporate legal markets, which now represent around 10%accounts for over 60% of divisional revenues,revenue, saw continued sales declines with return rates at historical levels, following higher than average return rates in the prior year. The decline in print pharma promotion revenues, which represent less than 5% of the divisional total, returned to historical trends having been stable in the prior year.
Risk & Business Analytics: 2017 financial performance
| 2017 £m | 2016 £m | Underlying growth | Acquisitions/ disposals | Currency effects | Total growth | |||||||||||||||||||
Revenue | 2,076 | 1,906 | +8 | % | -4 | % | +5 | % | +9 | % | ||||||||||||||
Adjusted operating profit | 759 | 686 | +8 | % | -2 | % | +5 | % | +11 | % | ||||||||||||||
Underlying revenue growth remained strong across all key segments in 2017. Underlying profit growth broadly matched underlying revenue growth.
Underlying revenue growth was +8%. Reported revenue growth was +9%. The difference between the reported and underlying growth rates primarily reflects the impact of exchange rate movements and portfolio changes including the disposal of New Scientist and other magazines, and the sale of our majority stake in a property title services joint venture to our partner.
Underlying adjusted operating profit growth broadly matched underlying revenue growth as we continued to pursueroll out enhancements in the functionality of our organic development strategy. The margin improvement reflects a positive effect from portfolio changes. Adjusted operating profit growth was +11%.
In Insurance we continued to drive growth through enhancedintegrated research products and market leading analytics, the extension ofsupported by broader datasets and by further expansion in adjacent verticals. The USthe application of machine learning and natural language processing technologies. Lexis+ continues to perform well, with increasing adoption and usage from customers across market environment returnedsegments.
Government & Academic, which accounts for around 20% of divisional revenue, and News & Business, which accounts for just under 10% of divisional revenue, both delivered good growth.
Renewals remain strong and new sales continue to historical trends in the fourth quarter, having been not quite as favourable earlier in the year. The international initiatives continued to progress well.show positive growth across all key segments.
In Business Services, further development of analytics that help our customers to detect and prevent fraud and to manage risk across the financial and corporate sectors continued to drive growth, in a positive US and international market environment.
Growth in the government and healthcare segments was driven by continued development of sophisticated analytics, and other Data Services continued to drive growth through organic development.
19
Legal: 2017Exhibitions: 2022 financial performance
| | | | | | | | | | | | | |
|
| 2021 |
| 2022 |
| Underlying |
| Portfolio |
| Currency |
| Total |
|
| | £m | | £m | | growth | | changes | | effects | | growth | |
Revenue(1) | | 534 | | 953 | | +64 | % | +12 | % | +2 | % | +78 | % |
Adjusted operating profit(2) |
| 10 |
| 162 |
| nm |
| nm |
| nm |
| nm | |
| (1) | Portfolio changes includes cycling effects of +14% |
| (2) | The change in adjusted operating profit underlying growth, portfolio changes, currency effects and total growth are not meaningful (nm) |
| 2017 £m | 2016 £m | Underlying growth | Acquisitions/ disposals | Currency effects | Total growth | |||||||||||||||||||
Revenue | 1,692 | 1,622 | +2 | % | -3 | % | +5 | % | +4 | % | ||||||||||||||
Adjusted operating profit | 332 | 311 | +11 | % | -10 | % | +6 | % | +7 | % | ||||||||||||||
UnderlyingStrong revenue growth and a recovery in 2017 was in line with the prior year, with continued efficiency gains driving strong underlying operating profit growth.profitability.
Underlying revenue growth was +2%. Reported revenue growth was +4%+78%. The difference between the reported and underlying growth rates reflects the impact of exchange rate movements and portfolio changes including the acquisition of Ravel Law, the disposal of several small print and services assets, and the final exit from the Martindale Hubbell joint venture.
Underlying adjusted operating profit growth was +11%. Adjusted operating profit growth was +7%. The increase in operating profit margin reflects ongoing organic process improvement and decommissioning of systems which, together with currency movements, more than offset a lower profit contribution from joint ventures and other portfolio effects.
Electronic revenues saw continued growth, partially offset by print declines. Theroll-out of new platform releases across our US and international markets continued, with broader datasets and the continued expansion of early stage legal analytics. The usage migration of US legal customers onto Lexis Advance is now substantially complete.
US and European markets remained stable. Other international markets continued to grow well.
Exhibitions: 2017 financial performance
| 2017 £m | 2016 £m | Underlying growth | Acquisitions/ disposals | Currency effects | Total growth | |||||||||||||||||||
Revenue | 1,109 | 1,047 | +6 | % | +1 | % | +5 | % | +6 | % | ||||||||||||||
Adjusted operating profit | 285 | 269 | +2 | % | -1 | % | +5 | % | +6 | % | ||||||||||||||
Exhibitions achieved strong underlying revenue growth in 2017, slightly ahead of the prior year, with underlying operating profit growth reflectingcycling-out effects.
Underlying revenue growth was +6%. After portfolio changes and six percentage points ofcycling-out effects, constant currency revenue growth was +1%. Reported revenue growth was +6%. The difference between the reported and constant currency growth rates reflects the impact of exchange rate movements and portfolio changes, including the acquisition of MCM Comic Con (UK), Cafe Seoul (South Korea) and Fitness (Australia), and the disposal of a number of small events.
Underlying adjusted operating profit growth was +2% reflectingcycling-out effects. Adjusted operating profit growth was +6%.
We continued to pursue organic growth opportunities, launching 36 new events, and piloting several data analytics opportunities.
Overall growth remained good in Europe and strong in Japan and China. The US continued to see differentiated growth rates by industry sector. Revenues in Brazil continued to reflect the general weakness of the wider economy. Most other markets continued to grow strongly.
Results of Operations for the Year Ended December 31, 2016
Compared to the Year Ended December 31, 2015
Reported revenue was £6,895 million (2015: £5,971 million), up 15% (2015: 3%). The increase in reported revenue reflects good growth in electronic and face to face revenues plus the impact of currency effects, partially offset by continued print revenue declines. Underlying revenue growth was 4% (2015: 3%) with all four market segments contributing to underlying revenue growth.
Reported operating costs, which comprises of cost of sales, selling and distribution costs, and administration and other expenses, was £5,224 million (2015: £4,538 million), up 15% (2015: 3%), principally reflecting the impact of exchange rates, plus increased staff costs and costs associated with the launch of new platforms and services. Cost of sales were £2,488 million (2015: £2,129 million), up 17% (2015: 6%) compared to 2015, slightly higher than the overall increase in revenue. Selling and distribution costs were £1,109 million (2015: £965 million), up 15% (2015: 3%) and administration and other expenses were £1,627 million (2015: £1,444 million), up 13% (2015: down 2%).
20
Reported operating profit, which includes amortisation of acquired intangible assets and acquisition related costs, was £1,708 million (2015: £1,497 million), an increase of 14% (2015: 7%).
Adjusted operating profit was £2,114 million (2015: £1,822 million), up 16% (2015: 5%), reflecting the benefit of tight cost control across the Group and currency exchange movements.
The reported operating margin was 24.8% (2015: 25.1%). The adjusted operating margin of 30.7% (2015: 30.5%) was 0.2 (2015: 0.4) percentage points higher than in the prior year. Underlying adjusted operating margin growth improved by 0.4 percentage points (2015: 0.9), currency effects increased the margin by 0.3 percentage points (2015:-0.5) and portfolio effects reduced the margin by 0.5 percentage points (2015: no impact).
Depreciation and amortisation of internally generated intangible assets increased to £257 million (2015: £228 million).
The amortisation charge in respect of acquired intangible assets, including the share of amortisation in joint ventures, increased to £346 million (2015: £296 million), primarily reflecting currency effects and acquisitions, partially offset by certain assets becoming fully amortised. Acquisition related costs were £51 million (2015: £35 million).
Reported net finance costs of £195 million (2015: £174 million) includes the net pension financing charge of £14 million (2015: £21 million), and excludes finance income in joint ventures of £1 million (2015: nil). The increase in net finance costs primarily reflects higher net borrowings and currency translation effects.
Reported loss on disposals and othernon-operating items was £40 million (2015: £11 million) arising largely from the sale of certain Risk & Business Analytics businesses and revaluation of investments held. These losses were offset by an associated tax credit of £34 million (2015: £13 million).
Reported profit before tax was £1,473 million (2015: £1,312 million). The reported tax charge was £304 million (2015: £298 million). The reported net profit attributable to RELX PLC and RELX NV shareholders of £1,161 million (2015: £1,008 million) was up 15% (2015: 6%). The adjusted net profit attributable to RELX PLC and RELX NV shareholders of £1,488 million (2015: £1,275m) was up 17% (2015: 5%).
The reported earnings per share for RELX PLC was up 21% at 56.3p (2015: 46.4p) and for RELX NV was up 1% at €0.687 (2015: €0.682). In sterling terms RELX NV’s reported EPS increased by 14%. The difference reflects the impact of the UK tax credit abolition as explained below.
Adjusted earnings per share were up 19% at 72.2p (2015: 60.5p) when expressed in sterling and 5% at €0.880 (2015: €0.835) when expressed in Euros. At constant currencies, adjusted earnings per share increased by 8%.
Until the end of 2015 the equalisation of dividends between RELX PLC and RELX NV took into account the prevailing tax credit that was available to certain UK tax payers at that time. The tax credit was also taken into account in the determination of reported earnings per share. The UK dividend tax credits were abolished with effect from April 6, 2016, impacting dividends paid after this date. As a result of the abolition of this tax credit, from 2016 reported earnings per share have the same value for each RELX PLC and RELX NV share.
Ordinary dividends paid in the year, in amounts per ordinary share, comprise: a 2015 final dividend of 22.30p and 2016 interim dividend of 10.25p giving a total of 32.55p (2015: 26.4p) for RELX PLC; and a 2015 final dividend of €0.288 and 2016 interim dividend of €0.122 giving a total of €0.410 (2015: €0.400) for RELX NV.
The final dividends proposed by the respective Boards are 25.70p per share for RELX PLC and €0.301 per share for RELX NV, 15% and 5% higher respectively compared with the prior year final dividends. This gives total dividends for the year of 35.95p (2015: 29.70p) and €0.423 (2015: €0.403). The difference in growth rates in the final dividends, and in the earlier interim dividends, reflects changes in the euro:sterling exchange rate since the respective prior year dividend announcement dates.
During 2016, 29.2 million RELX PLC and 26.1 million RELX NV shares were repurchased. Total consideration for these repurchases was £700 million. A further 1.2 million RELX PLC shares and 1.1 million RELX NV shares were purchased by the Employee Benefit Trust. During December 2016, 33.7 million RELX PLC and 30.0 million RELX NV shares held in treasury were cancelled. As at December 31, 2016, total shares in issue for RELX Group, net of shares held in treasury and shares held by the Employee Benefit Trust, amounted to 2,043 million. A further 3.7 million RELX PLC shares and 3.3m million RELX NV shares have been repurchased in 2017 as at February 22, 2017.
Scientific, Technical & Medical: 2016 financial performance
| 2016 £m | 2015 £m | Underlying growth | Acquisitions/ disposals | Currency effects | Total growth | |||||||||||||||||||
Revenue | 2,320 | 2,070 | +2 | % | 0 | % | +10 | % | +12 | % | ||||||||||||||
Adjusted operating profit | 853 | 760 | +3 | % | -1 | % | +10 | % | +12 | % | ||||||||||||||
21
Key business trends remained positive in 2016, with underlying adjusted operating profit growth slightly exceeding underlying revenue growth.
Underlying revenue growth was +2%. Reported revenue growth was +12%. The difference between the reported and underlying growth rates primarily reflects the impact of exchange rate movements.
Underlying adjusted operating profit growth of +3% was slightly ahead of underlying revenue growth, resulting in a small underlying margin improvement which was partly offset by exchange rate movements. Adjusted operating profit growth was +12%.
In primary research, strong growth in usage and article submissions continued. In 2016 we launched 64 new journals.
Good growth continued in databases & tools, as well as in electronic reference products.
Print books, which now represent around 10% of divisional revenues, saw steeper second half declines than in recent years, reflecting market conditions. Print pharma promotion revenues were stable.
Risk & Business Analytics: 2016 financial performance
| 2016 £m | 2015 £m | Underlying growth | Acquisitions/ disposals | Currency effects | Total growth | |||||||||||||||||||
Revenue | 1,906 | 1,601 | +9 | % | -1 | % | +11 | % | +19 | % | ||||||||||||||
Adjusted operating profit | 686 | 575 | +9 | % | -1 | % | +11 | % | +19 | % | ||||||||||||||
Underlying revenue growth improved in 2016, with strong growth across all key segments in both subscription and transactional revenues. Underlying adjusted operating profit growth broadly matched underlying revenue growth.
Underlying revenue growth was +9%. Reported revenue growth was +19%. The difference between the reported and underlying growth rates reflects the impact of exchange rate movements and a minor effect from portfolio changes.
Underlying adjusted operating profit growth broadly matched underlying revenue growth as we continued to develop new products and services. Adjusted operating profit growth was +19%.
The insurance segment continued to see strong growth, driven by volume growth and strong take up of new products and services across the insurance workflow, and by expansion in adjacent verticals including life and home insurance. The international initiatives continued to progress well, with strong growth in the UK, and early stage developments in China and India.
In Business Services,Revenue growth was driven by demand for identity authentication and fraud detection solutionsa significant increase in face-to-face activity as exhibition venues reopened across most geographies.
During the financial services and corporate sectors.year, we continued to manage our event schedule flexibly, responding to changes in local government policies. By the end of the year we were operating without material disruption in most geographies. We made good progress on digital initiatives, with a growing range of digital tools supporting our physical events.
The government and healthcare segments continued to develop strongly. Major Data Services saw strong underlying revenue growth, and other brands & services remained stable.
Legal: 2016 financial performance
| 2016 £m | 2015 £m | Underlying growth | Acquisitions/ disposals | Currency effects | Total growth | |||||||||||||||||||
Revenue | 1,622 | 1,443 | +2 | % | 0 | % | +10 | % | +12 | % | ||||||||||||||
Adjusted operating profit | 311 | 274 | +12 | % | -10 | % | 12 | % | +14 | % | ||||||||||||||
Underlying revenue growth improved slightlyimprovement in 2016, with continued efficiency gains driving strong underlying adjusted operating profit growth.
Underlying revenue growth was +2%. Reported revenue growth was +12%. The difference between the reported and underlying growth ratesprofitability reflects the impact of exchange rate movementsincreased activity levels and minor portfolio changes.
Underlying adjusted operating profit growth was +12%. Adjusted operating profit growth was +13%. The margin increase reflects organic process improvement and the ongoing decommissioning of systems, largely offset bya lower profits from joint ventures and other portfolio effects.
Electronic revenues saw continued growth, partially offset by print declines.
US and European markets remained stable but subdued. Revenue from other international markets continued to grow well.
The roll out of new platform releasescost structure in the US and international markets continued, and adoption and usage rates progressed well.
22
Exhibitions: 2016 financial performance
| 2016 £m | 2015 £m | Underlying growth | Acquisitions/ disposals | Currency effects | Total growth | |||||||||||||||||||
Revenue | 1,047 | 857 | +5 | % | +1 | % | +13 | % | +22 | % | ||||||||||||||
Adjusted operating profit | 269 | 217 | +7 | % | +1 | % | +16 | % | +24 | % | ||||||||||||||
Exhibitions achieved strong underlying revenue growth in 2016, in line with prior year.
Underlying revenue growth was +5%. After portfolio changes and three percentage points of cycling effects, constant currency revenue growth was +9%. Reported revenue growth was +22%. The difference between the reported and constant currency growth rates reflects the impact of exchange rate movements.
Underlying adjusted operating profit growth was +7%. The 40 basis point improvement in reported margin largely reflects exchange rate movements. Adjusted operating profit growth was +24%.
Revenue growth was strong in the US and moderate in Europe. Japan grew strongly, and China saw good growth.
Revenues in Brazil continued to reflect the general weakness of the wider economy. Most other markets continued to grow strongly.
We continued to pursue growth opportunities, launching 32 new events and completing seven small acquisitions.a streamlined portfolio.
Critical Accounting Policies
The accounting policies of the consolidated businesses under IFRS as issued by the IASB and as adopted by the EU are described within the relevant notes to the consolidated financial statements as set forth on pages 117167 to 164204 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2. The most critical accounting policies and estimates used in determining the financial condition and results of the Group, and those requiring the most subjective or complex judgments, relate to the valuation of goodwill and acquired intangible assets, capitalisation of development spend, accounting for defined benefit pension schemes and taxation.
23
The Audit CommitteesCommittee of RELX PLC RELX NV and RELX Group plc havehas reviewed the development and selection of critical accounting estimates, and the disclosure of critical accounting policies in the financial statements.
Effect of Currency Translation
The consolidated financial statements are expressed in sterling and are therefore subject to the impact of movements in exchange rates on the translation of the financial information of individual businesses whose operational currencies are other than sterling. The principal exposures in relation to the results reported in sterling are to the US dollar and the euro, reflecting our business exposure to the United States and the European Economic and Monetary Union, our most important markets. Some of these exposures are offset by denominating borrowingsdebt in US dollars and euros.
Individual businesses are subject to foreign exchange transaction exposures caused by the effect of exchange rate movements on their revenue and operating costs, to the extent that such revenue and costs are not denominated in their functional currencies. Individual businesses generally hedge their exposures at market rates through the centralised treasury department. Hedging of foreign exchange transaction exposure is the only hedging activity undertaken by the individual businesses. For further details see note 1917 to the consolidated financial statements as set forth on pages 147189 to 152194 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
CurrencyCompared to 2021, currency differences increased the Group’s revenue by £351£543 million in 2017 compared to 2016. Excluding amortisation of acquired intangible assets of £314 million and acquisition related costs of £56 million, currency differences increased operating profits by £112 million in 2017 compared to 2016.2022. Acquired intangible asset amortisation and acquisition related costsacquisition-related items are predominantly denominated in US dollars and, after these charges, compared to 2021, currency differences increased operating profitsprofit by £94£192 million in 2017 comparedfrom 2021 to 2016.2022. The majority of borrowings areour debt is denominated in US dollars and euros and after charging net finance costs, currency differences increased profit before tax by £87£110 million in 2017 compared to 2016.2022.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements are included in note 1 to the consolidated financial statements under the heading ‘Basis of preparation and are set forthaccounting policies’ on page 123167 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
23
LIQUIDITY AND CAPITAL RESOURCES — THE GROUP
Cash Flow
Cash flows from operating activities
The Group’s cash generated from operations increased from £2,476 million in 2017 amounted2021 to £2,445£3,061 million (2016: £2,236 million; 2015: £1,882 million).in 2022. Included in these net cash inflows are cash outflows, of £42which increased from £46 million (2016: £40 million; 2015: £45 million)in 2021 to £54 million in 2022 relating to acquisition related costs.acquisition-related items and cash outflows relating to Exhibitions exceptional costs charged in 2020, which decreased from £52 million in 2021 to £25 million in 2022. A substantial proportion of revenue is received through subscription and similar advanced receipts, principally for scientific and medical journals and exhibition fees.journals. At December 31, 20172022 subscriptions and other revenues received in advance totalled £1,834increased from £1,956 million (2016: £1,941 million; 2015: £1,639 million).in 2021 to £2,368 million in 2022. The Group paid tax of £342 million in 2021 and £495 million in 2022, which was lower than the reported current tax charge, reflecting timing of tax payments.
Cash flows from investing activities
The Group’s cash outflow on the purchase of property, plant and equipment increased from £28 million in 2017 was £512021 to £36 million (2016: £51 million 2015: £65 million),in 2022 while proceeds from the sale of property, plant and equipment amounteddecreased from £5 million in 2021 to £1 million (2016: £1 million; 2015: £1 million).nil in 2022. The cash outflow on internally developed intangible assets increased from £309 million in 2017 was £3032021 to £400 million (2016: £282 million; 2015: £242 million),in 2022, reflecting sustained investment in new products and related infrastructure, particularly in the Legal and Scientific, Technical & Medical businesses.products.
During 2017,2021, the Group paid a total of £131£262 million (2016: £361 million; 2015: £191 million) for acquisitions, excluding nil borrowings in acquired businesses and including deferred consideration of £13£19 million (2016: £24 million; 2015: £25 million) on past acquisitions and after taking accountinvestments in joint ventures and associates and venture capital investments of net cash acquired of £7 million (2016: £10 million; 2015: £3 million). A further £10 million (2016: £6 million; 2015: £16 million) was paid on the purchase of investments during the year.£8 million. During 2017,2022, the Group paid taxa total of £449£460 million (2016: £402 million; 2015: £343 million).for acquisitions, excluding £3 million of
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borrowings in acquired businesses and including deferred consideration of £21 million on past acquisitions and investments in joint ventures and associates and venture capital investments of £66 million.
Cash flows from financing activities
Share repurchasesNo shares were repurchased by RELX PLC andin 2021. 21.7 million shares were repurchased by RELX NVPLC in 2017 were £7002022 for total consideration of £500 million, (2016: £700 million; 2015: £500 million), with a further £100£150 million repurchased in 20182023 as at February 14, 2018. On February 15, 2018, RELX PLC and RELX NV announced their intention to repurchase further ordinary shares up to the value of £600 million in aggregate over the remainder of 2018.2023. In addition, the Employee Benefit Trust purchased shares inof RELX PLC to meet future obligations in respect of share based remuneration totalling £1 million and RELX NV totalling £39£50 million (2016: £29 million; 2015: £23 million).in 2021 and 2022, respectively. Proceeds from the exercise of share options weredecreased from £32 million (2016: £23 million; 2015: £24 million).in 2021 to £26 million in 2022.
During 2017,2021 and 2022, the Group paid ordinary dividends totalling £762£920 million and £983 million, respectively, to the shareholders of RELX PLC and RELX NV (2016: £683 million; 2015: £583 million).PLC. Dividend payments are funded by the operating cash flow of the business after capital spend.
Debt
Debt as at December 31, 2021 and December 31, 2022 was £6,167 million and £6,730 million, respectively. Net borrowings,debt, used in assessing the Group’s financial position was £6,017 million as at December 31, 2017 were £4,7322021 and £6,604 million (2016: £4,700 million; 2015: £3,782 million),as at December 31, 2022, comprising gross borrowingsbank and bond debt of £4,886£6,548 million and lease liabilities of £182 million, plus £213 million of related derivative financial instrument liabilities, less cash and cash equivalents of £111£334 million and £43 millionfinance lease receivables of related derivative financial instrument assets.£5 million. The majority of our borrowings aredebt is denominated in US dollars and euros and the strengthening of sterlingeuros. Sterling was weaker against the US dollar and euro at the year end compared with the start of the year partly offset by the weakening of sterling against the euro, resulted in slightly lowerwhich increased net borrowingsdebt overall when translated into sterling. Excluding currency effects, net borrowingsdebt increased by £64£26 million.
Net borrowings aredebt is reconciled as follows:
| | | | | ||||||||||||
| As at December 31 | 2017 | 2016 | 2015 |
| 2021 |
| 2022 | |||||||||
| £m | £m | £m | ||||||||||||||
| | £m | | £m | ||||||||||||
Cash & cash equivalents | 111 | 162 | 122 |
| 113 |
| 334 | |||||||||
Borrowings | (4,886 | ) | (4,843 | ) | (3,902 | ) | ||||||||||
Debt |
| (6,167) |
| (6,730) | ||||||||||||
Related derivative financial instruments | 43 | (19 | ) | (2 | ) |
| 35 |
| (213) | |||||||
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Net borrowings | (4,732 | ) | (4,700 | ) | (3,782 | ) | ||||||||||
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Net finance lease receivable |
| 2 |
| 5 | ||||||||||||
Net debt |
| (6,017) |
| (6,604) | ||||||||||||
Liquidity
The group hasDuring April 2022, the Group’s undrawn committed bank facilities, maturing in 2023 and 2024, were cancelled and replaced with a $2.0new $3.0 billion unsecured committed bank facility maturing in July 2020,April 2025. This committed facility, which provides security of funding for short-term debt. Atdebt, was undrawn at December 31, 2017, this2022. The new facility was undrawn.does not include a financial covenant (whereas the previous facility included a covenant limiting the ratio of debt to EBITDA).
In March 2017, €1.0bn in totalMay 2022, $500m of euroUS dollar denominated fixed rate term debt was issued with couponsa coupon of 0.375%4.75% and 1.000% and maturitiesa maturity of four years and seven years, respectively.10 years.
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The Group believes that it has ample liquidity and access to debt capital markets, providing the ability to repay or refinance borrowingsdebt as they matureit matures and to fund ongoing requirements.
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Contractual obligationsObligations
The contractual obligations of the Group relating to debt and leases at December 31, 20172022 analysed by when payments are due, are summarised below.
| Total | Less than 1 year | 1-3 years | 3-5 years | After 5 years | ||||||||||||||||
| (in millions) | ||||||||||||||||||||
Short-term borrowings(1)(2) | £681 | £681 | £— | £— | £— | |||||||||||||||
Long-term borrowings (including finance lease obligations)(2) | 4,928 | 119 | 1,283 | 1,323 | 2,203 | |||||||||||||||
Operating leases | 484 | 109 | 180 | 107 | 88 | |||||||||||||||
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Total | £6,093 | £909 | £1,463 | £1,430 | £2,291 | |||||||||||||||
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| Less than |
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| After 5 | ||
| | Total | | 1 year | | 1-3 years | | 3-5 years | | years | |||||
| | | (in millions) | ||||||||||||
Short-term debt(1)(2) | | £ | 903 | | £ | 903 | | | — | | | — | | | — |
Long-term debt(2) | | | 6,921 | | | 126 | | | 2,054 | | | 1,495 | | | 3,246 |
Total | | £ | 7,824 | | £ | 1,029 | | £ | 2,054 | | £ | 1,495 | | £ | 3,246 |
| (1) | Short-term debt primarily comprises term debt issues maturing within one year and commercial paper, and is supported by |
| (2) | Short and long-term debt obligations comprise undiscounted principal and interest cash flows. Interest cash flows are calculated by reference to the contractual payment dates and the fixed interest rates (for fixed rate debt) or the relevant forecast interest rates (for floating rate debt). |
Information on retirement benefit obligations is set forth in note 6 to the consolidated financial statements under the heading ‘Pension schemes’ on pages 127173 to 130177 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
Off-balance sheet arrangementsOff-Balance Sheet Arrangements
Except as disclosed above under “Contractual Obligations”, we have nooff-balance sheet arrangements that currently have or are reasonably likely to have a material effect on the RELX Group’sRELX’s financial condition, results of operations, liquidity, capital expenditure or capital resources.
Treasury policiesPolicies
The main treasury risks faced by the Group are liquidity risk, interest rate risk, foreign currency risk and credit risk. The Boards of RELX PLC, RELX NV and RELX Group plc agreeBoard agrees overall policy guidelines for managing each of these risks. A summary of these policies is provided in note 1917 to the consolidated financial statements as set forth under the heading ‘Financial Instruments’ on pages 147189 to 152194 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
Financial instruments are used to finance our businessesbusiness and to hedge transactions. Our businessesWe do not enter into speculative derivative transactions.
Capital and liquidity managementLiquidity Management
The capital structure is managed to support the Group’s objective of maximising long-term shareholder value throughvalue. The Group maintains an efficient capital structure with appropriate leverage while ensuring suitable 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.on short notice.
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Over the long-term, the Group seeks to maintain cash flow conversion of 90% or higher and credit rating agency metrics that are consistent with a solid investment grade credit rating. These metrics as defined by
RELX uses the rating agencies include net debt to EBITDA, on a pensions and lease adjusted and on an unadjusted basis, and various measures of cash flow as a percentage of net debt.
Net debt on an unadjusted basis is the same as net borrowings which is reconciled on page 24. Adjusted EBITDA is derived from net profit as follows:
| 2017 | 2016 | 2015 | ||||||||||
| (in millions) | (in millions) | (in millions) | ||||||||||
Net profit for the year | £ | 1,667 | £ | 1,169 | £ | 1,014 | ||||||
Adjustments: | ||||||||||||
Taxation | 67 | 304 | 298 | |||||||||
Disposals and othernon-operating items | (11 | ) | 40 | 11 | ||||||||
Net finance costs | 182 | 195 | 174 | |||||||||
Amortisation of acquired intangible assets | 314 | 346 | 296 | |||||||||
Depreciation and other amortisation | 272 | 257 | 228 | |||||||||
Acquisition related costs | 56 | 51 | 35 | |||||||||
Reclassification of tax in joint ventures | 10 | 10 | (6 | ) | ||||||||
Reclassification of finance income in joint ventures | (1 | ) | (1 | ) | – | |||||||
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Adjusted EBITDA | £ | 2,556 | £ | 2,371 | £ | 2,050 | ||||||
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Our uses of free cash flow, afterit generates to fund capital expenditure required to drive organic investment, over the longer-term balance the dividend policy,growth, to make selective acquisitions and share repurchases,to provide a growing dividend to shareholders, while retaining the balance sheet strength to maintain access to cost effectivecost-effective sources of borrowing. Share repurchases are undertaken to maintain an efficient balance sheet.
Further detail on our capital and liquidity management, including material cash requirements and other material commitments, is provided in note 1917 to the consolidated financial statements under the heading ‘Financial Instruments’ on pages 147189 to 152194 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
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SHORT-TERM BORROWINGSDEBT
The Group operates a number of commercial paper programmes that provide flexibility for funding operational requirements on a daily basis, at short notice and at competitive rates. Commercial paper is issued under both US and Euro programmes and guaranteed by RELX PLC and RELX NV.PLC. In addition, short-term borrowing facilities are established with local banks to support the daily requirements of businesses operating in certain countries where there may be restrictions on borrowing from affiliates. Term debt in the table below consists of borrowingsdebt with an original maturity of greater than one year and which mature within 12 months of the reporting date. TheseThis short-term borrowings weredebt was backed up at December 31, 20172022 by a $2.0the $3.0 billion committed bank facility maturing in July 2020 which2025. This facility was undrawn.undrawn at December 31, 2022. The short-term borrowingdebt programmes are run in conjunction with term debt programmes which comprise the majority of our debt and provide the Group with security of funding.
The average amount and the average interest rate during the year have been calculated by taking the average of the amounts outstanding at each month end (translated to sterling at the respective month end rate) and the average of the interest rate applicable at each month end. Commercial paper issuance reached a maximum month end level of £763£345 million in September 2017,2022 following cash outflows in respect of shareholder dividends and share repurchases, and short-term loans and overdrafts reached a maximum month end level of £90£102 million in December 2017, both2022 as a result of movements in trading cash flows.flows and acquisition spend. Term debt reached a maximum month end level of £627£737 million in January 2017October 2022 as the maturity of the $35$700 million term debt issue expiring in February 2017,March 2023 and of the €350$150 million term debt issue expiring in May 2017 and the £300 million term debt issue expiring in December 2017October 2023 were then allboth below 12 months.
Lease liabilities have been excluded from the balances below.
| Short-term borrowings as at December 31, | 2017 (in millions) | 2017 Weighted average interest rate % | 2016 (in million) | 2016 Weighted average interest rate % | 2015 (in millions) | 2015 Weighted average interest rate % | ||||||||||||||||||||||||||||
| | | | | | | | | | | ||||||||||||||||||||||||
| | | |
| 2021 | | | |
| 2022 | ||||||||||||||||||||||||
| | | | | Weighted | | | | | Weighted | ||||||||||||||||||||||||
| | | | | average | | | | | average | ||||||||||||||||||||||||
| | 2021 | | interest | | 2022 | | interest | ||||||||||||||||||||||||||
Short-term debt as at December 31, |
| (in millions) |
| rate % |
| (in millions) |
| rate % | ||||||||||||||||||||||||||
Commercial paper | £376 | 0.3 | £426 | (0.2) | £113 | 0.4 | | £ | 33 | | 0.2 | | £ | — | | — | ||||||||||||||||||
Short-term loans and overdrafts | 88 | 1.8 | 95 | 1.7 | 105 | 2.2 | | | 98 | | 2.5 | | | 102 | | 7.4 | ||||||||||||||||||
Finance leases | 5 | 1.7 | 5 | 1.5 | 6 | 1.8 | ||||||||||||||||||||||||||||
Term debt | 209 | 2.8 | 633 | 2.3 | 400 | 5.6 | | | 32 | | 8.9 | | | 701 | | 5.7 | ||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||
Total short-term borrowings | £ | 678 | £ | 1,159 | £ | 624 | ||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||
Total short-term debt | | £ | 163 | | | | £ | 803 | | — | ||||||||||||||||||||||||
| | | | | | | | | | |
| | | |
| 2021 | | | |
| 2022 |
| | | | | Weighted | | | | | Weighted |
| | | | | average | | | | | average |
| | 2021 | | interest | | 2022 | | interest | ||
Average short-term debt during the year ended December 31, |
| (in millions) |
| rate % |
| (in millions) |
| rate % | ||
Commercial paper | | £ | 181 | | 0.1 | | £ | 122 | | 2.2 |
Short-term loans and overdrafts | | | 63 | | 3.9 | | | 68 | | 4.9 |
Term debt | | £ | 55 | | 2.8 | | £ | 527 | | 3.6 |
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| | | | | | |
|
| 2021 |
| 2022 | ||
Maximum month end short-term debt | | (in millions) | | (in millions) | ||
Commercial paper | | £ | 459 | | £ | 345 |
Short-term loans and overdrafts |
| | 104 |
| | 102 |
Term debt |
| £ | 443 |
| £ | 737 |
| Average short-term borrowings during the year ended December 31, | 2017 (in millions) | 2017 Weighted average interest rate % | 2016 (in millions) | 2016 Weighted average interest rate % | 2015 (in millions) | 2015 Weighted average interest rate % | ||||||||||||||||||
Commercial paper | £ | 467 | 0.7 | £ | 429 | 0.1 | £ | 458 | 0.3 | |||||||||||||||
Short-term loans and overdrafts | 48 | 3.7 | 121 | 2.1 | 93 | 2.1 | ||||||||||||||||||
Finance leases | 5 | 1.7 | 6 | 1.8 | 7 | 2.7 | ||||||||||||||||||
Term debt | £ | 209 | 3.0 | £ | 547 | 3.6 | £ | 111 | 5.6 | |||||||||||||||
| Maximum month end short-term borrowings | 2017 (in millions) | 2016 (in millions) | 2015 (in millions) | |||||||||
Commercial paper | £ | 763 | £ | 989 | £ | 620 | ||||||
Short-term loans and overdrafts | 90 | 167 | 106 | |||||||||
Finance leases | 5 | 6 | 7 | |||||||||
Term debt | £ | 627 | £ | 729 | £ | 400 | ||||||
Our products and services include and utilise intellectual property content delivered through a variety of media, including online, journals and books. We rely on trademark, copyright, patent, trade secret and other intellectual property laws, as well as in some cases licensing arrangements with third parties, to establish and protect our proprietary rights in these products and services.
Trends,Material trends, uncertainties and events which can affect the revenue, operating profit and liquidity and capital resources of RELX Group include the usage, penetration and customer renewal of our products and the prices that customers pay for our products, the migration of products to online services, investment in new products and services, cost control and the impact of our cost reduction programmes on operational efficiency, the levels of legal industry and academic library funding, the impact of economic conditions on corporate and other customer budgets, the actions of competitors and regulatory, legislative and legislativelegal developments.
27
Trends, uncertainties and events which could have a material impact on our revenue, operating profit and liquidity and capital resources are discussed in further detail in “Item 3: Key Information — Risk Factors”; “Item 4: Information on the Group”; and “Item 5: Operating and Financial Review and Prospects — Operating Results — The Group —;Results; Liquidity and Capital Resources — The Group”Resources”.
RESEARCH AND DEVELOPMENT
27In 2021 and 2022 RELX spent £309 million and £400 million, respectively, in respect of capitalised development costs. This reflects sustained investment in new products. This expenditure was mainly incurred in the United States, the United Kingdom and the Netherlands. For additional information, see note 14 to the consolidated financial statements under the heading ‘Intangible assets’ on pages 185 to 187 of the RELX Annual Report and Financial Statements 2022 and incorporated herein by reference to Exhibit 15.2.
ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
DIRECTORS
The information on the Directors of each of RELX PLC RELX NV and RELX Group plc as at February 14, 201823, 2023 is set forth under the headings ‘Executive Directors’ and‘Non-Executiveheading ‘Board Directors’ on pages 6698 to 6799 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and is incorporated herein by reference to Exhibit 15.2.
As a general rule,Non-Executive Directors serve for an initial term of three years, and are typically expected to be available to serve for a second three-year period, ifperiod. If invited to do so. Theyso, they may also be invited to serve for a third period of three years.
The Directors of RELX PLC as at February 23, 2023 are as follows:
| | |
Name (Age) |
| |
Erik Engstrom | | Executive Director and Chief Executive Officer |
| | Non-Executive |
Paul Walker (65) | | Non-Executive Chair(2)(3)(4) |
Wolfhart Hauser | | Non-Executive Director(2)(3)(4)(5) |
| | Non-Executive Director(1)(4) |
Marike van Lier Lels | | Non-Executive Director |
Nick Luff | | Executive Director and Chief Financial Officer |
Robert MacLeod | | Non-Executive Director(2)(3)(4)(6) |
| | Non-Executive Director(1)(4) |
| ||
| ||
Suzanne Wood | | Non-Executive Director(1)(4)(6) |
| (1) | Member of the Audit |
| (2) | Member of the Remuneration |
| (3) | Member of the |
| (4) | Member of the |
| (5) | Senior Independent Director, as defined by the UK Corporate Governance Code. Wolfhart Hauser agreed to retire from the Board with effect from the conclusion of the Annual General Meeting on April 20, 2023. Dr. Hauser agreed to remain on the Board beyond the usual nine-year tenure to allow an orderly succession of the roles of Senior Independent Director and Remuneration Committee Chair. |
| (6) | Suzanne Wood will replace Dr Hauser as Senior Independent Director and Robert MacLeod will replace Dr Hauser as Remuneration Committee Chair, with effect from the conclusion of the Annual General Meeting on April 20, 2023, subject to their re-election by shareholders. |
Suzanne Wood
The following changes to the RELX PLC Board of Directors took place during the period from January 1, 2022 to December 31, 2022:
Linda Sanford, a Non-Executive Director and member of the Remuneration Committee and the Corporate Governance Committee, retired from the Board with effect from the conclusion of the Annual General Meeting on April 21, 2022, having served on the Board for over nine years.
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June Felix joined the Boards as aNon-Executive Director in September 2017.Remuneration Committee with effect from April 21, 2022.
SENIOR MANAGEMENT
The executive officers, of RELX PLC, RELX NV and RELX Group plc, other than Directors, at February 14, 201823, 2023 were:
Henry Udow: Chief Legal Officer and Company Secretary of RELX PLC and RELX Group plc.Secretary. A US and British citizen who is admitted to the Bar of New York State. Joined the Group in 2011. Prior to joining the Group, he was Chief Legal Officer and Company Secretary of Cadbury plc.
Gunjan Aggarwal:Rose Thomson: Chief Human Resources Officer of RELX Group plc.PLC. Joined the Group in 2017.2021. Prior to joining the Group, she was head of Human Resources for Ericsson’sthe Chief People Officer at ABRDN PLC a global media businessinvestment and before that head of Human Resources for Ericsson North America. Career includes a number of Human Resources positions in Asia, Europe and North America at Unilever and Novartis.asset management company.
COMPENSATION
Jans van der Woude:Company Secretary and Legal Counsel of RELX NV. A Dutch lawyer. Prior to joiningAt the Group in 2009 was legal advisor to Corporate Express NV. Before that was Corporate Legal Director of TNT NV, having previously been General Counsel at Getronics NV.
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The remuneration policy in relation to the Executive Directors as approved by RELX PLC shareholders at the 20142020 Annual General Meeting, and by the 2005 General Meeting of RELX NV as amended in 2008, 2010 and 2013; applied up to the date of the 2017 Annual General Meetings of RELX PLC and RELX NV shareholders respectively anda remuneration policy was approved, which is hereby incorporated herein by reference to Exhibit 15.3.15.3 of this Annual Report on Form 20-F. The 20172022 grants were made under the multi-year incentive plans to Executive Directors were made under this policy.
At the 20172023 Annual General Meetings, RELX PLC shareholders approvedMeeting, proposals for a new remuneration policy will be put for Executive Directors and NV shareholders approved amendmentsapproval, see pages 136 to the Executive Directors’ remuneration policy which is set out on pages 96 to 102142 of the Group’sRELX Annual ReportsReport and Financial Statements 2017 and is incorporated herein by reference to2022 appended hereto as Exhibit 15.2. The first multi-year incentive grants under the new policy will be made in 2018.
The policy relating to payment for loss of office of Executive Directors andNon-Executive Directors is set out on pages 1005 to 1026 of the Group’sExhibit 15.3 of this Annual Reports and Financial Statements 2017Report on Form 20-F and is incorporated herein by reference to Exhibit 15.2.reference.
Compensation of executive officersExecutive Officers
The aggregate compensation (salary, annual incentive, benefits, pension, cash allowance in lieu of pension and dividend equivalents received in respect of shares vested during 2017 under BIP and LTIP)2022) paid during 20172022 (and in respect of the annual incentive earned in respect of 2017)2022) to those who were executive officers (other than Directors) of RELX Group as at February 14, 2018 forduring the year ended December 31, 20172022 was £2,019,068,£2,936,326 which included contributions made to the pension plans in respect of such officers of £24,276.£8,000.
The executive officers participate in an annual incentive plan (“AIP”) which is based on financial targets and individual key performance objectives measured over a one-year period. The resulting AIP payout comprises a cash payout in March following the end of the relevant financial year (2/3rds) and deferred shares (1/3rd) which are released to participants after three years. The 2022 aggregate compensation for executive officers includes both the cash and the deferred share elements of the 2022 AIP.
29
ANNUALDIRECTORS’ REMUNERATION REPORT
The AnnualDirectors’ Remuneration Report is set out on pages 84124 to 95142 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and is incorporated herein by reference to Exhibit 15.2.
30
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SHARE OWNERSHIP
Executive Directors’ multi-year incentive interestsMulti-Year Incentive Interests
This information is set forth under the heading ‘Multi-year incentive interests’ on pages 90130 to 91131 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and is incorporated herein by reference to Exhibit 15.2.
The GroupEquity-Based Plans
As of December 31, 20172022, we operated and/or had awards outstanding under a number of equity-based plans as follows:
(i) | All-Employee Equity-Based Plans |
The following twothree plans are localall-employee equity based plans:
(a) | UK SAYE Share Option Scheme |
Options over RELX PLC ordinary shares have been granted under the SAYE Scheme. Shares may be acquired at the exercise price, which is not less than the higher of (i) 80% of the closing market price for the relevant share on The London Stock Exchange three dealing days before invitations to apply for options are issued, and (ii) if new shares are to be subscribed, their nominal value.
All UK employees of RELX Group plc and participating companies under its control in employment at the date of invitation are entitledeligible to participate in the SAYE Scheme. In addition, the Directors of RELX Group plc may permit other employees of RELX Group plc and participating companies under its control to participate.
Invitations to apply for options may normally only be issued within 42 days after the announcement of our consolidated results for any period. No options may be granted more than 10 years after the approval of the scheme. A new 2013 SAYE Share Option Scheme was implemented during 2013. It replaced the 2003 SAYE Share Option Scheme, under which the final grant of options permitted within the scheme’s 10 year validity period was made during 2012. Outstanding options granted under the 2003 SAYE Share Option Scheme will remain capable of exercise until 2018.
On joining the SAYE Scheme, aParticipants can save as you earn contract (a Savings Contract) must be entered into with an appropriate savings body, under which savings of between £10 and £500 per month may be made to such savings body for a period of three or five years. A bonus may be payable under the Savings Contract at the end of the savings period. Bonus rates are determined by HMRC. The amount of the monthly contributions may be reduced if applications exceed the number of RELX PLC ordinary shares available for the grant of options on that occasion.
The number of RELX PLC ordinary shares over which an option may be granted is limited to that number of shares which may be acquired at the exercise price out of the repayment proceeds (including any bonus) of the Savings Contract.
Options under the SAYE Scheme may normally only be exercised forDuring a period of six months afterfollowing the bonus date underend of the relevant Savings Contract.period, the participant can use his/her savings to buy shares at the exercise price. However, options may be exercised earlier than the normal exercise date in certain specified circumstances, including death, or on ceasing employment on account of injury, disability, redundancy, reaching the specified retirement age, or upon retirement under our self-standing retirement policy for the SAYE Scheme or the sale of the business or subsidiary for which the participant works, or on ceasing employment for any other reason, or provided the option has been held for at least three years. Exercise is allowed in the event of an amalgamation, reconstruction or take-over of the company whose shares are under option; alternatively, such options may, with the agreement of an acquiring company or a company associated with it, be exchanged for options over shares in the acquiring company or that associated company. Options may also be exercised in the event of the voluntarywinding-up of the company whose shares are under option. In the event that options are exercised before the bonusnormal exercise date, the participant may acquire only the number of shares that can be purchased with the accumulated savings up to the date of exercise, plus interest (if any).
In the event of any capitalisation or rights issue by RELX PLC or RELX NV, or of any consolidation, subdivision or reduction of their share capital, the number of shares subject to any relevant option and/or the exercise price may be adjusted with the approval of HMRC, subject to the independent auditors of RELX Group plc confirming in writing that such adjustment is, in their opinion, fair and reasonable.
The Executive Directors have waived their right to participate in the SAYE Scheme.
(b) | Netherlands |
Subscriptions under this scheme ceased in 2017, but there are still option (formerly conversion) rights outstanding under this scheme. This facility consistsconsisted of an annual issue by RELX NV of a convertible debenture loan (the Netherlands Convertible Debenture Stock Scheme) that iswas open for subscription by staff employed by our companies in the Netherlands or temporarily seconded to affiliates abroad. The interest rate of the scheme is determined quarterly on the basis of the highest market rates on internet savings which can be withdrawn at a day’s notice in the Netherlands. Employees can annually subscribe for one or
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more debentures of €200 each, up to a maximum amount equal to 20% of the equivalent of 15 times the employee’s fixed gross monthly salary, including any fixed monthly allowances, but excluding anynon-monthly salary components (holiday pay, annual incentives, profit shares etc). Interest is payable in arrears in the month of January following the subscription year. TheThese convertible debenture loans havehad a term of 10 years.years and accrued interest on a quarterly basis, payable in arrears after the end of each year. During the10-year term of the loan, employees cancould decide to convert their claim oninto RELX NV intoPLC shares at an exercise (conversion) price equal to the share price of a RELX NV share on Euronext Amsterdam on the last dealing day of the month in which the employee has subscribed for the loan (the exercise price). All remaining debenture loans, together with accrued interest up to the payment date, were repaid to bond holders in November 2019. When the loans were repaid, subsisting conversion rights became standalone option rights on substantially the same terms, with no change to the relevant exercise price and 10-year exercise (conversion) period.
The Executive Directors were not eligible to participate in this scheme.
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(c) | Dutch Share Purchase Plan (“DSPP”) |
All employees of RELX Nederland BV and participating companies under its control who are neither in their probation period nor under notice at the date of invitation and who are in receipt of salary via a Dutch payroll are entitled to participate in the DSPP. Each debenturecycle of €200 can be converted into 50the DSPP operates on a standalone basis and eligibility is assessed for each cycle that is offered. The 2022 cycle of the DSPP launched in February 2022 and completed in December 2022.
Participating employees make monthly contributions out of net salary which are used to purchase RELX PLC shares, listed on Euronext Amsterdam (investment shares). Minimum and maximum annual contribution amounts apply to each cycle. In 2022, the minimum annual contribution amount was €250 and the maximum annual contribution amount was €6,000. At the end of the 2022 DSPP cycle, participants who were still in RELX NV against paymentemployment, and who had not sold any of 50 times the exercise price, less €200.investment shares purchased during the year, received matching shares from RELX equal to 20% of the investment shares purchased during 2022. Investment shares acquired under the DSPP accrue normal RELX dividends which are automatically reinvested into additional RELX PLC shares.
There will be no further subscriptions under this plan as a share purchase plan for employeesThe Executive Directors are not eligible to participate in the Netherlands has been introduced commencing in 2018 in lieu of the Netherlands convertible debenture stock arrangement.
DSPP.
(ii) | Executive Equity-Based Plans |
Our executive equity-based plans comprise:
(a) | Long-term incentive plan |
The LTIP 2013 applies to senior executives (including executive officers and the Executive Directors). Awards may be granted as performance share awards ornil-cost options but it is currently intended to only grant performance share awards. Awards vest subject to performance measured over three financial years. Awards may be satisfied with new issue shares, a transfer of treasury shares or shares purchased in the market, but it is currently intended to continue the existing practice of satisfying awards with shares purchased in the market. The performance measures and targets applicable to awards granted in 20172022 under this plan are detailed in the table below. The vesting of awards is also subject to participants meeting a minimum shareholding requirement and continued employment (except for certain categories of approved leavers). Dividend equivalents accrue over the performance period and are paid out in cash at the end to the extent that the awards vest. Further, shares vested from awards granted to the Executive Directors in 2015 through to2016 and 2017 are subject to a further six months holding period post vesting which has been increased to two years for shares vested from awards granted to the Executive Directors from 2018 onwards.
LTIP: 2017-192022-2024 cycle
Vesting is dependent on the three separate performance measures of equal weighting:measures: a TSRtotal shareholder return (“TSR”) measure (comprising three comparator groups), an EPS measure and a ROIC measure.return on invested capital (“ROIC”) measure, weighted 20%:40%:40% respectively and assessed independently.(1)
| | |
Vesting percentage of each third
| TSR ranking within the relevant | |
of the TSR tranche(2) | TSR comparator group | |
0% | | below median |
25% | | median |
100% | | upper quartile |
| (1) | The calculation methodology for TSR, EPS and ROIC is set out in the 2013 Notices of Annual General Meeting, which can be found on |
| (2) | Vesting is on a |
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Vesting percentage of EPS and ROIC tranches* | Average growth in adjusted EPS over the three-year performance period | ROIC in the third year of the performance period | ||
| 0% | below 5% p.a. | below 12.5% | ||
| 33% | 5% p.a. | 12.5% | ||
| 52.5% | 6% p.a. | 12.75% | ||
| 65% | 7% p.a. | 13.0% | ||
| 75% | 8% p.a. | 13.25% | ||
| 85% | 9% p.a. | 13.5% | ||
| 92.5% | 10% p.a. | 13.75% | ||
| 100% | 11% p.a. or above | 14.0% or above |
| | | | |
|
| Average growth in adjusted |
| |
Vesting percentage of EPS | | EPS over the three-year | | ROIC in the third year of |
and ROIC tranches* |
| performance period |
| the performance period |
0% | | below 5% p.a. |
| below 11.0% |
25% | | 5% p.a. |
| 11.0% |
50% | | 6% p.a. |
| 11.5% |
65% | | 7% p.a. |
| 12.0% |
75% | | 8% p.a. |
| 12.5% |
85% | | 9% p.a. |
| 13.0% |
92.5% | | 10% p.a. |
| 13.5% |
100% | | 11% p.a. or above |
| 14.0% or above |
*Vesting is on a straight-line basis for performance between the stated average adjusted EPS growth/ROIC percentages.
(b) | Executive Share Option Scheme 2013 (“ESOS 2013”) |
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The plans in this category comprise the Executive Share Option Scheme 2013 (ESOS 2013) and the Share Option Scheme 2003 (ESOS 2003). Details of the ESOS 2003 have been disclosed in previous Annual Reports on Form20-F.
The ESOS 2013 applies to around 1,000 executives. Market value options are granted which vest (subject to performance in the case of Executive Directors) after three years and remain exercisable, subject to continued employment, until the tenth anniversary of grant. Options may be satisfied with new issue shares, a transfer of treasury shares or shares purchased in the market, but it is currently intended to continue the existing practice of satisfying options with new issue shares. The performance measure and targets applicable to options granted in 2017
No grants under this planESOS 2013 were made to Executive Directors are set forth on page 87 of the Group’s Annual Reports and Financial Statements 2017 and are incorporated herein by reference to Exhibit 15.2.
No further awards will be made under ESOS 2013 to Executive Directors from 2018. Outstanding unvestedin 2022. Vested awards held by the executives and Directors will vest and becomeremain exercisable, at the end of the relevant performance/vesting period, as applicable.
ESOS 2003 has options outstanding under it but no further options have been granted under this plan since 2013.
(c) |
The Bonus Investment Plan 2010 (BIP 2010) is a voluntary plan aimed at encouraging personal investment in, and ongoing holding of, RELX shares to promote greater alignment with shareholders and support the retention of key talent. Details of the BIP 2010 have been disclosed in previous Annual Reports on Form20-F. Awards were made in 2017 under BIP 2010 to senior executives (including executive officers and Executive Directors). The performance measures and targets applicable to awards granted in 2017 are detailed in the table below.
No further awards will be made under the BIP from 2018. Outstanding unvested awards will vest at the normal time at the end of the applicable performance period.
BIP: 2017-19 cycle
Match earned on personal investment | Average growth in adjusted EPS over the three-year performance period* | ROIC in the third year of the performance period* | ||
| 0% | below 4% p.a. | below 12.5% | ||
| 50% | 4% p.a. | 12.5% | ||
| 75% | 6.5% p.a. | 13.0% | ||
| 100% | 9% p.a. or above | 13.5% or above |
Retention Share Plan |
The RSP is used to facilitate the grant ofone-off awards of restricted shares, where appropriate, to senior new hires for example, to buy out share-based awards from previous employment. The restricted shares which have been awarded will be satisfied by shares purchased in the market and Executive Directors are not eligible to participate. In 2014, the RSP 2014 replaced the RSP for the type of awards described above.
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Since 2006, employees eligible to participate in the ESOS (see (b) above), other than Executive Directors, have been able to choose prior to the date of grant whether to receive all or part of their grant in the form of restricted shares based on apre-determined conversion ratio of one share for every five options that would otherwise be granted to them under ESOS. The RSP is the vehicle used to deliver the award of such restricted shares. The restricted shares vest after the expiry of three years from the date of grant, subject to the participant remaining employed by us or a participating company under our control. The restricted shares awarded are satisfied by shares purchased in the market.
Share optionsOptions and conditional share awardsConditional Share Awards
At February 14, 201815, 2023 the total number of shares subject to outstanding options was:
| | | | | | | | |||
| | Number of | | | | |||||
| | outstanding | | Options over | | Option price | ||||
| options | shares | range | |||||||
UK SAYE Scheme | 2,132,665 | RELX PLC | £ | 11.788-16.568 | ||||||
Netherlands Convertible Debenture Stock Scheme | 569,114 | RELX PLC | € | 9.561-19.390 | ||||||
ESOS | 7,255,421 | RELX PLC | £ | 7.345-24.11 | ||||||
| 1,898,440 | RELX PLC | € | 8.147-19.165 | ||||||
Share options are expected, upon exercise, to be met by the issue of new ordinary shares.
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At February 14, 201815, 2023 the following conditional share awards were also outstanding:
| | | | | ||||
| Number of | | ||||||
| | outstanding | | Awards over | ||||
| | awards | | shares in | ||||
| ||||||||
LTIP | 5,605,952 | RELX PLC | ||||||
RSP | 1,153,444 | RELX PLC | ||||||
Share ownershipOwnership by Directors and Executive Officers
The interests of those individuals who were Directors of RELX PLC and RELX NV as at December 31, 20172022 in the issued share capital of the respective companiesRELX PLC at the beginning and end of the year are shown under the heading ‘Statement of Directors’ shareholdings and other share interests’ on page 89129 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and is incorporated herein by reference to Exhibit 15.2.
The interests of the current Executive Directors of RELX PLC and RELX NV in the issued share capital of the respective companiesRELX PLC as at February 21, 201822, 2023 were:
| Interest in RELX PLC shares | Interest in RELX NV shares | |||||||
Erik Engstrom | 201,414 | 809,203 | * | |||||
Nick Luff | 127,559 | 138,412 | ||||||
| | |
| Interest in | |
| | RELX |
| | PLC shares |
Erik Engstrom | 1,174,668* | |
Nick Luff | 280,365 |
* | Comprises ordinary shares and ADRs. |
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Shares and options held by executive officers
The following table indicates the total aggregate number of RELX PLC and RELX NV securities beneficially owned (comprising ordinary shares and ADRs) and the total aggregate number of share options (comprising ordinary shares only) and conditional share awards (comprising ordinary shares and ADRs) held by the executive officers (other than Directors) of RELX Group plc (three persons)the Company in office as of February 14, 2018:15, 2023:
| RELX PLC shares | RELX PLC ordinary shares subject to options | RELX PLC conditional share awards | RELX NV shares | RELX NV ordinary shares subject to options | RELX NV conditional share awards | |||||||||||||||||||
Executive officers (other than Directors) | 369,885 | 124,249 | 147,610 | 121,479 | 177,401 | 215,494 | ||||||||||||||||||
| | | | | | | | |
|
| |
| RELX |
| RELX |
| |
| | | | PLC £ | | PLC € | | RELX |
| | | | ordinary | | ordinary | | PLC |
| | | | shares | | shares | | conditional |
| | RELX PLC | | subject to | | subject to | | share |
|
| shares |
| options |
| options |
| awards |
Executive officers (other than Directors) |
| 592,445 |
| 47,553 |
| 49,387 |
| 351,420 |
The options over RELX PLC pound sterling denominated ordinary shares included in the above table are exercisable at prices ranging from £5.155£9.245 to £14.945£16.568 per share between the 3rd anniversary of their respective grant date and 2027 (except for SAYE options which will be exercisable for six months from the respective maturity date). The options over RELX NVPLC Euro denominated ordinary shares included in the above table are exercisable at prices ranging from €5.832€10.286 to €19.390€16.7225 per share between the 3rd anniversary of their respective grant date (except for Dutch Debenture options which are exercisable from the date of subscription) and 2027. The RELX PLC and RELX NV conditional share awards included in the above table will vest between 20182023 and 2020.2025.
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THE GROUP
MembershipIn 2022, we granted a total of the Boards of RELX PLC, RELX NV and RELX Group plc is aligned. All of the Directors of RELX Group plc are also Directors of RELX PLC and RELX NV. RELX NV may nominate for appointment up to twoNon-Executive Directors who are not appointed102,973 conditional share awards to the Boardsexecutive officers under the LTIP (which is described above under “Executive Equity-Based Plans”).
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RELX GROUP PLCBOARD PRACTICES
The RELX Group plc Board currently consists of two Executive Directors and nineeight Non-Executive Directors. A person may only be appointed or proposed or recommended for appointment to the Board if that person has been nominated for that appointment by the joint Nominations Committee of RELX PLC and RELX NV. Persons nominated by the Nominations Committee will be required to be approved by the RELX Group plc Board, prior to appointment to the RELX Group plc Board.
Decisions of the Board of Directors of RELX Group plc require a simple majority, and the quorum required for meetings of the Board of RELX Group plc is any two Directors.
The RELX Group plc Board has established the following Committees:
Copies of the terms of reference of the Audit Committee and the Remunerations Committee are available on request and can be viewed on our website, www.relx.com. The information on our website is not incorporated by reference into this report.
Arrangements established at the time of the merger of RELX PLC’s and RELX NV’s businesses provide that, if any person (together with persons acting in concert with him) acquires shares, or control of the voting rights attaching to shares, carrying more than 50% of the votes ordinarily exercisable at a general meeting of RELX PLC or RELX NV and has not made a comparable takeover offer for the other party, the other party may by notice suspend or modify the operation of certain provisions of the merger arrangements, such as (i) the right of the party in which control has been acquired (the “Acquired Party”) to appoint or remove directors of RELX PLC, RELX NV and RELX Group plc and (ii) the Standstill Obligations (defined below) in relation to the Acquired Party. Such a notice will cease to apply if the person acquiring control makes a comparable offer for all the equity securities of the other within a specified period or if the person (and persons acting in concert with him) ceases to have control of the other.
In the event of a change of control in one of RELX PLC or RELX NV and not the other (where there has been no comparable offer for the other), the company which has not suffered the change in control will effectively have the sole right to remove and appoint directors of RELX Group plc. Also, a director removed from the Board of RELX PLC or RELX NV which has suffered a change in control will not have to resign from the Board of the other company or RELX Group plc.
The articles of association of RELX Group plc contain certain restrictions on the transfer of shares in RELX Group plc. In addition, pursuant to arrangements established at the time of the merger, neither RELX PLC nor RELX NV may acquire or dispose of any interest in the share capital of the other or otherwise take any action to acquire the other without the prior approval of the other (the “Standstill Obligations”). The Panel on Takeovers and Mergers in the United Kingdom (the “Panel”) has stated that in the event of a change of statutory control of either RELX PLC or RELX NV, the person or persons acquiring such control will be required to make an offer to acquire the share capital of RELX Group plc held by the other, in accordance with the requirements of the City Code on Takeovers and Mergers in the United Kingdom. This requirement would not apply if the person acquiring statutory control of either RELX PLC or RELX NV made an offer for the other on terms which are considered by the Panel to be appropriate.
RELX PLC
The RELX PLC Board currently consists of two Executive Directors and nineNon-Executive Directors. A person may only be appointed or proposed or recommended for appointment to the Board if that person has been nominated for that
36
appointment by the joint Nominations Committee of RELX PLC and RELX NV. Persons nominated by the Nominations Committee will be required to be approved by the RELX PLC Board, prior to appointment to the RELX PLC Board. A copy of the terms of reference of the Nominations Committee is available on request and can be viewed on our website, www.relx.com. The information on our website is not incorporated by reference into this report.Annual Report on Form 20-F.
Notwithstanding the provisions outlined above in relation to the appointment to the Board, RELX PLC shareholders retain their rights under RELX PLC’s articles of association to appoint Directors to the RELX PLC Board by ordinary resolution. RELX PLC shareholdersShareholders may also, by ordinary resolution, remove a Director from the Board of RELX PLC, and in such circumstances that Director will also be required to be removed or required to resign from the Boards of RELX NV and RELX Group plc (except in circumstances where there has been a change of control of RELX PLC and not RELX NV).Board.
The RELX PLC Board has also established the following Committees:
| — | Audit — currently comprising |
| — | Corporate Governance — |
| — | Nominations — |
| — | Remuneration — currently comprising four Non-Executive Directors including the Chair of the Board, which is responsible for determining the remuneration policy (subject to shareholders approval) and monitoring and deciding its implementation for the Executive Directors and the Chair, and approving the remuneration for senior executives below Board level. |
RELXFor additional information regarding the Board membership positions and executive officer positions within the Group, plc has established asee “Directors” on page 29 and “Senior Management” on page 29. Details of the membership of the Audit Committee of and details of the membership of the Remuneration Committee which is responsible for determining the remuneration policy (subject to shareholder approval) and monitoring and deciding its implementation for the Executive Directors of RELX PLC and RELX Group plc, and considering the remuneration for the Executive Directors of RELX NV.are given under “Directors” on page 29.
Under the articles of association of RELX PLC, one thirdone-third of the Directors shall retire from office and, if they wish, make themselves available forre-election by shareholders at the Annual General Meeting. Notwithstanding these provisions in the articles of association, in accordance with the provisions of the UK Corporate Governance Code all Directors normally retire and, unless they are standing down, will offer themselves forre-election re-election/election at each Annual General Meeting.
RELX NV
RELX NV has a unitary board comprising both ExecutiveThe main roles andNon-Executive Directors. The Board currently comprises two Executive Directors and nineNon-Executive Directors. Directors shall be appointed by the General Meeting upon a proposal responsibilities of theNon-Executive Directors based on a nomination for appointment by the joint Nominations Committee of RELX NV and RELX PLC. The articles of association of RELX NV provide that a resolution of the General Meeting to appoint a Director other than in accordance with a proposal of the Board can only be taken by a majority of at leasttwo-thirds of the votes cast if less thanone-half of RELX NV’s issued capital is represented at the meeting.
The General Meeting of RELX NV may also, by ordinary resolution, resolve to suspend or dismiss each Director of RELX NV. In addition, each Executive Director of the Board can, at any time, be suspended by the Board. In such circumstances that Executive Director will also be required to be removed or required to resign from the Boards of RELX PLC and RELX Group plc (except in circumstances where there has been a change of control of RELX NV and not RELX PLC).
The RELX NV Board has established the following committees:
RELX Group plc has established a Remuneration Committee which is responsible for considering the remuneration for the Executive Directors of RELX NV, and determining the remuneration policy (subject to shareholder approval) and monitoring its implementation for the Executive Directors of RELX Group plc and RELX PLC.
Under the Articles of Association of RELX NV, a Director of RELX NV shall retire no later than on the day on which the first General Meeting is held following the lapse of three years after his appointment, with the possibility ofre-appointment and shall retire periodicallyare set out in accordance with a rotation plan drawn up by the Board. Notwithstanding these provisions in the articles of association, in accordance with the provisions of the UK Corporate Governance Code all Directors retire and seekre-appointment at each Annual General Meeting. To align the arrangements regarding appointment for the Boards of RELX NV and RELX PLC annualre-appointment shall not affect the term of their three-year appointment. As a general rule, letters of appointment forNon-Executive Directors provide that, subject to annualre-election by
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shareholders, individuals will serve for an initial period of three years, and are typically expected to be available to serve for a second three-year period, if invited to do so. They may also be invited to serve for an additional period of three years. A schedule with the anticipated dates of retirement of Directors is published on our website, www.relx.com. A copy of thewritten terms of reference and include:
| (i) | to determine the remuneration policy and monitor and decide its implementation, subject to and in accordance with applicable law, for the executive directors and senior management of RELX PLC; |
| (ii) | to review the ongoing appropriateness and relevance of the remuneration policy and in particular the performance-related elements and their compatibility with risk policies and systems; |
| (iii) | to review and recommend amendments to the rules of all share based incentive plans and, where appropriate, to formulate suitable performance conditions for share based awards and options; |
| (iv) | to have due regard in the performance of its duties to any published corporate governance guidelines, codes or recommendations regarding the remuneration of directors of listed companies and formation and operation of share schemes which the Committee considers relevant or appropriate including but not limited to the UK Corporate Governance Code; |
| (v) | to assist in maintaining an open and ongoing dialogue with institutional investors on major remuneration policy issues;and |
| (vi) | to review workforce remuneration and related policies, and the alignment of incentives and rewards with culture, and take these into account when setting the remuneration policy for executive directors. |
The Remuneration Committee Chair reports formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities and the Committee has due regard that prevailing requirements and best practice regarding disclosure of the Nominations Committee is available on requestall information are met and can be viewed produces an annual report of RELX’s remuneration policy and practices which forms part of RELX’s Annual Report and Financial Statements.
34
ThetermsofreferencefortheRemunerationCommitteearereviewedannuallyandacopyispublishedonour website. The information on our website, www.relx.com.Theinformationonourwebsiteisnotincorporatedbyreferenceintothis report.AnnualReportonForm20-F.
EMPLOYEES
The number of people employed is disclosed in note 5 to the consolidated financial statements set forth in note 5 under the heading ‘Personnel’ on page 126172 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
The Board of RELX Group plcPLC is fully committed to the concept of employee involvement and participation, and encourages each of its businessesbusiness areas to formulate its own tailor-made approach with theco-operation of employees. We are an equal opportunity employer, and recruit and promote employees on the basis of suitability for the job. Appropriate training and development opportunities are available to all employees. ARELX has adopted a code of ethics and business conduct applicable to all employees within the Group has been adopted throughout its businesses.Group.
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35
ITEM 7:MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
MAJOR SHAREHOLDERS
RELX PLC
Substantial share interests
As at February 22, 2018,23, 2023, we had been notified by the following shareholders that they held an interest of 3% or more in voting rights(1)of the issued share capital of RELX PLC. The number of shares and percentage interests stated below are as disclosed at the date on which the interests were notified to us:
Identity of Person or Group(2) | Number of Shares | % of Class | ||||||
BlackRock, Inc | 107,062,804 | 9.62 | ||||||
Invesco Limited | 58,810,637 | 5.03 | ||||||
Legal & General Group plc | 41,300,403 | 3.40 | ||||||
| | | | |
|
| Number of |
| |
Identity of Person or Group(2) |
| Shares |
| % of Class |
BlackRock, Inc |
| 186,631,180 |
| 9.67 |
Invesco Limited |
| 52,329,893 |
| 4.99 |
| (1) | Under the UK Disclosure and Transparency Rules, subject to certain limited exceptions, persons or groups with an interest of 3% or more in voting rights of the issued |
| (2) | Under the UK Large andMedium-sized Companies and Groups (Financial Statements and Reports) Regulations 2008, RELX PLC is required to disclose information |
As far as RELX PLC is aware, except as disclosed herein, it is neither directly or indirectly owned nor controlled by one or more corporations or by any government.
There were no material or unusual transactions between RELX and any of the entities listed above.
At December 31, 20172022, there were 13,53075 ordinary shareholders including the depositary for RELX PLC’s ADR programme, with a registered address in the United Kingdom,States, holding 70,666,096 ordinary shares of RELX PLC, representing 95.06%3.65% of the total number of ordinary shares issued. This includes Citibank N.A., depositary for RELX PLC’s ADR programme, which held 70,570,297 ordinary shares of RELX PLC, representing 3.64% of the total number of ordinary shares issued. At December 31, 2022, there were 81 registered ADR holders (holding together 21,496 ADRs), who all have a registered address in the United States, representing less than 0.0001% of the total number of ordinary shares issued.
RELX PLC is not aware of any arrangements the operation of which may at a subsequent date result in a change in control of RELX PLC. The major shareholders of RELX PLC do not have different voting rights to other ordinary shareholders.
RELX NV
Substantial share interests
As of February 22, 2018, we were aware of the following disclosable interests of 3% or more in the issued RELX NV shares based on the public database of the Netherlands Authority for the Financial Markets(1) or provided as a Schedule 13G filing(2). The number of shares and percentage interests stated below are as disclosed on the date on which the interests were notified to us:
Identity of Person or Group | Number of Shares | % of Class | ||||||
RELX NV(3) | 54,292,694 | 5.18 | ||||||
Janus Henderson Group Plc | 52,462,008 | 5.00 | ||||||
The Bank of New York Mellon Corporation | 50,765,958 | 4.99 | ||||||
BlackRock, Inc | 49,301,998 | 4.97 | ||||||
Fil Limited | 34,423,641 | 3.37 | ||||||
Massachusetts Financial Services Company | 22,994,683 | 3.03 | ||||||
Jupiter Asset Management Limited | 31,545,168 | 3.01 | ||||||
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As far as RELX NV is aware, except as disclosed herein, it is neither directly nor indirectly owned or controlled by any single corporation or corporations acting jointly, nor by any government.
RELX NV is not aware of any arrangements the operation of which may at a subsequent date result in a change in control of RELX NV. The major shareholders of RELX NV do not have different voting rights to other ordinary shareholders.
RELATED PARTY TRANSACTIONS
Transactions with joint ventures and key management personnel, comprising the Executive andNon-Executive Directors of RELX PLC, and RELX NV, are set out in note 2825 to the consolidated financial statements set forth under the heading ‘Related party transactions’ on pages 158 and 159page 199 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and is incorporated herein by reference to Exhibit 15.2.
Further details of remuneration of key management personnel are set out in “Item 6 —6: Directors, Senior Management and Employees”.
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36
FINANCIAL STATEMENTS
See Item“Item 18: Financial Statements,Statements”, incorporated herein by reference.
Subsequent events are set out in note 30 to the consolidated financial statements set forth under the heading ‘Subsequent events’ on page 159 of the Group’s Annual Reports and Financial Statements 2017 and is incorporated herein by reference to Exhibit 15.2.
DIVIDEND POLICY
Dividends to RELX PLC and RELX NV shareholders are, other than in special circumstances, equalised at the gross level. Until April 6, 2016, this included the then prevailing UK attributable tax credit of 10% available to certain RELX PLC shareholders. The UK government abolished these dividend tax credits with effect from April 6, 2016, so that dividends paid after this date are the same for both RELX PLC and RELX NV. As a result of this change, reported earnings per share also have the same value for each RELX PLC and RELX NV share from 2016. The exchange rate used for each dividend calculation as defined in the RELX Group governing agreement is the average of the closingmid-point spot euro:sterling exchange rate for the five consecutive business days commencing with the tenth business day before the dividend determination date. The Boardspolicy of RELX PLC and RELX NV have adopted dividend policiesis, over the longer term, to grow dividends broadly in recent years in respect of their equalised dividends that, subject to currency considerations, more closely align dividend growthline with growth in adjusted earnings per share consistent withwhile targeting dividend cover (being the number of times the annual dividend normally beingis covered overby the longer termadjusted earnings per share) of at least two times by adjusted earnings per share (i.e. before the amortisation of acquired intangible assets, acquisition related costs, net financing charge on defined benefit pension schemes, disposal gains and losses and othernon-operating items, related tax effects, other deferred tax credits from intangible assets and exceptional tax credits).times.
LEGAL PROCEEDINGS
Various of the Group’sRELX PLC’s subsidiaries operating in the United States have been the subject of legal proceedings and federal and state regulatory actions relating to data security breaches,incidents, pursuant to which unauthorised persons were alleged to have obtained personal information from our databases, or alleged breaches ofnon-compliance with privacy, data and consumer protection laws in connection withand regulations regarding the obtaining and disclosure by such subsidiaries of information without the consent of the individuals involved. The principal actions and investigations have been settled, with the substantial portion of cash payments agreed to be paid by these subsidiaries being reimbursed by insurance and third-party indemnities. The settlements generally require strictcomprehensive data security programmes, submissions of regulatory reports andon-going monitoring by independent third parties to ensure our compliance with the terms of those settlements. While the costs of suchon-going monitoring will be borne by us, neither the costs of compliance nor the costs of suchon-going monitoring are expected to have a material adverse effect on our financial position or the results of our operations.
ManyVarious of theRELX PLC’s subsidiaries offer products offered by Risk & Business Analytics are subject to regulation under the US Fair Credit Reporting Act (“FCRA”), Gramm Leach Bliley Act (“GLBA”), Driver’s Privacy Protection Act (“DPPA”) and related state laws requiringthat require that we meet certain obligations in connection with the disclosure of information. Certain of these laws further provide for statutory penalties and attorneys’ fees fornon-compliance. In the normal course of its business, Risk & Business Analytics deals with individual and class action lawsuits claiming violation of one or more of these statutes. Other than pending matters, to date, these cases have either been settled or successfully defended with a substantial portion of cash payments agreed to be paid by our insurance providers. These proceedings have not had, and are not expected to have, a material adverse effect on our financial position or the results of our operations.
We are party to various other legal proceedings arising in the ordinary course of our business, the ultimate resolutions of which are not expected to have a material adverse effect on our financial position or the results of our operations.
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TRADING MARKETS
RELX PLC
The RELX PLC ordinary shares are listed on the London Stock Exchange, Euronext Amsterdam and the New York Stock Exchange. The London Stock Exchange is the principal trading market for RELX PLC ordinary shares. Trading on the New York Stock Exchange is in the form of American Depositary Shares (ADSs)(“ADSs”), evidenced by American Depositary Receipts (ADRs)(“ADRs”) issued by Citibank N.A., as depositary. Each ADS represents one RELX PLC ordinary share.
The table below sets forth,tickers for the periods indicated, the high and low closing market quotations for theeach of RELX PLC ordinary shares on the London Stock Exchange as derived from the Daily Official List of the London Stock Exchange and the high and low last reported sales prices in US dollars for the RELX PLC ADSs on the New York Stock Exchange, as derived from the New York Stock Exchange Composite Tape, and reported by Bloomberg:
| Pence per ordinary share | US dollars per ADS | |||||||||||||||
Calendar Periods | High | Low | High | Low | ||||||||||||
2017 | 1,782 | 1,398 | 24.01 | 17.75 | ||||||||||||
2016 | 1,502 | 1,126 | 19.75 | 16.22 | ||||||||||||
2015 | 1,220 | 1,011 | 18.38 | 15.63 | ||||||||||||
2014(1) | 1,113 | 866 | 17.44 | 14.43 | ||||||||||||
2013(1) | 899 | 641 | 15.01 | 10.25 | ||||||||||||
2017 | ||||||||||||||||
Fourth Quarter | 1,782 | 1,668 | 24.01 | 22.47 | ||||||||||||
Third Quarter | 1,695 | 1,603 | 22.56 | 21.24 | ||||||||||||
Second Quarter | 1,717 | 1,544 | 22.14 | 19.74 | ||||||||||||
First Quarter | 1,566 | 1,398 | 19.81 | 17.75 | ||||||||||||
2016 | ||||||||||||||||
Fourth Quarter | 1,502 | 1,282 | 19.31 | 16.22 | ||||||||||||
Third Quarter | 1,471 | 1,390 | 19.75 | 18.50 | ||||||||||||
Second Quarter | 1,376 | 1,192 | 19.27 | 17.17 | ||||||||||||
First Quarter | 1,306 | 1,126 | 19.05 | 16.48 | ||||||||||||
2015 | ||||||||||||||||
Fourth Quarter | 1,220 | 1,119 | 18.32 | 17.16 | ||||||||||||
Third Quarter | 1,132 | 1,011 | 17.67 | 15.63 | ||||||||||||
Second Quarter | 1,179 | 1,035 | 17.44 | 16.21 | ||||||||||||
First Quarter | 1,188 | 1,066 | 18.38 | 16.19 | ||||||||||||
Month | ||||||||||||||||
February 2018 (through February 21, 2018) | 1,523 | 1,455 | 21.77 | 20.49 | ||||||||||||
January 2018 | 1,715 | 1,557 | 23.75 | 21.91 | ||||||||||||
December 2017 | 1,739 | 1,712 | 23.70 | 23.30 | ||||||||||||
November 2017 | 1,782 | 1,711 | 24.01 | 22.88 | ||||||||||||
October 2017 | 1,733 | 1,668 | 23.39 | 22.47 | ||||||||||||
September 2017 | 1,689 | 1,603 | 22.56 | 21.91 | ||||||||||||
PLC’s listings are detailed below:
| London Stock Exchange — ‘REL’ |
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RELX NV
The RELX NV shares are quoted on Euronext Amsterdam NV and the New York Stock Exchange. Euronext Amsterdam is the principal trading market for RELX NV shares. Trading on the New York Stock Exchange is in the form of ADSs, evidenced by ADRs issued by Citibank N.A., as depositary. Each ADS represents one RELX NV share.
The table below sets forth, for the periods indicated, the high and low closing market quotations for the RELX NV shares on Euronext Amsterdam as derived from theOfficiële Prijscourant of Euronext Amsterdam and the high and low last reported sales prices in US dollars for the RELX NV ADSs on the New York Stock Exchange, as derived from the New York Stock Exchange Composite Tape, and reported by Bloomberg:
| € per ordinary share | US dollars per ADS | |||||||||||||||
Calendar Periods | High | Low | High | Low | ||||||||||||
2017 | 19.55 | 15.39 | 23.27 | 16.41 | ||||||||||||
2016 | 16.34 | 13.65 | 18.28 | 14.98 | ||||||||||||
2015 | 16.50 | 12.42 | 17.45 | 14.78 | ||||||||||||
2014(1) | 12.97 | 9.56 | 16.03 | 13.26 | ||||||||||||
2013(1) | 10.28 | 7.27 | 13.98 | 9.42 | ||||||||||||
2017 | ||||||||||||||||
Fourth Quarter | 19.55 | 18.21 | 23.27 | 21.43 | ||||||||||||
Third Quarter | 18.09 | 17.21 | 21.59 | 20.17 | ||||||||||||
Second Quarter | 18.88 | 17.36 | 21.10 | 18.56 | ||||||||||||
First Quarter | 17.36 | 15.39 | 18.64 | 16.41 | ||||||||||||
2016 | ||||||||||||||||
Fourth Quarter | 16.15 | 13.99 | 17.91 | 14.98 | ||||||||||||
Third Quarter | 16.34 | 15.43 | 18.28 | 17.21 | ||||||||||||
Second Quarter | 15.84 | 14.21 | 18.06 | 16.01 | ||||||||||||
First Quarter | 15.68 | 13.65 | 17.82 | 15.42 | ||||||||||||
2015 | ||||||||||||||||
Fourth Quarter | 16.50 | 14.34 | 17.45 | 16.30 | ||||||||||||
Third Quarter | 15.45 | 13.21 | 16.81 | 14.95 | ||||||||||||
Second Quarter | 15.65 | 13.74 | 16.58 | 15.23 | ||||||||||||
First Quarter | 15.40 | 12.42 | 16.75 | 14.78 | ||||||||||||
Month | ||||||||||||||||
February 2018 (through February 21, 2018) | 17.25 | 16.23 | 21.70 | 20.21 | ||||||||||||
January 2018 | 19.12 | 17.70 | 23.14 | 21.96 | ||||||||||||
December 2017 | 19.45 | 19.12 | 23.07 | 22.67 | ||||||||||||
November 2017 | 19.55 | 18.90 | 23.27 | 22.13 | ||||||||||||
October 2017 | 19.39 | 18.21 | 22.60 | 21.43 | ||||||||||||
September 2017 | 18.09 | 17.56 | 21.59 | 20.81 | ||||||||||||
| Euronext Amsterdam — ‘REN’ |
| — | New York Stock Exchange — ‘RELX’ |
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ITEM 10: ADDITIONAL INFORMATION
ARTICLES OF ASSOCIATION
RELX PLC
A copy of RELX PLC’s current Articles of Association (the “Articles”) is filed as Exhibit 1.1 to this Annual Report on Form20-F.
The following is a summary of the current Articles. As a summary, it is not exhaustive and is qualified in its entirety by reference to UK law and the Articles.
Company’s Objects
RELX PLC’s objects are unrestricted.
Share Capital
As at December 31, 20172022 the Company’s issued ordinary share capital comprised 1,123.71,934.9 million shares of 14 51/116 p. At December 31, 2017 51/116p and the number of shares held in treasury totalled 63.6totaled 25.4 million. Of these, 3.55.6 million ordinary shares were held by the Employee Benefit Trust and 60.119.8 million ordinary shares were held in treasury by RELX PLC. During 2017,2022, RELX PLC bought back 23.1a total of 21.7 million ordinary shares to be held in treasury pursuant to the authority given by shareholders at the Annual General Meeting held on April 20, 201721, 2022, and the previous authority given by shareholders at the Annual General Meeting held on April 22, 2021. On April 21, 2016. On December 27, 2017,2022, RELX PLC cancelled 22.4620 million ordinary shares held in treasury and on December 8, 2022, RELX PLC cancelled 32 million ordinary shares held in treasury. These share purchases and cancellations are reflected in the number of ordinary shares held in treasury at, December 31, 2017.2022. All share capital is fully paid up.
RELX PLC by ordinary resolution and subject to the UK Companies Act 2006 (as amended) (the “Act”“Companies Act”) may:
| 1. | Allot shares up to a limit of 1/3 of the issued share capital, a further 1/3 of the issued share capital may be allotted but only in connection with a fullypre-emptive rights issue; |
| 2. | Sub-divide all or part of the share capital into shares of a smaller nominal value than the existing shares; and |
| 3. | Consolidate and divide all or part of the share capital into shares of a larger nominal value than the existing shares. |
All shares created by an increase of RELX PLC’s share capital by consolidation, division orsub-division shall be subject to all the provisions of the Articles.
RELX PLC by special resolution and subject to the Companies Act may:
| 1. | Disapply shareholderspre-emption rights on new issue shares up to a limit of 5% of the issued share capital, and disapplypre-emption rights on new issue shares up to a further 5% of the issued share capital in connection with an acquisition or specified capital investment subject to certain conditions; |
| 2. | Buy back its own shares up to a limit of 10% of the issued share capital; and |
| 3. | Reduce its share capital. |
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Transfer of ordinary shares
A certificated shareholding may be transferred in the usual form or in any other form approved by the Board. The Board in its discretion may refuse to register the transfer of a certificated share which is not fully paid and may also refuse to register the transfer of a certificated share unless the instrument of transfer:
| 1. | is stamped or certified and lodged, at the registered office or other place that the Board |
| 2. | is in respect of only one class of shares; and |
| 3. | is in favour of not more than four transferees. |
Where the Board refuses to register a transfer of certificated shares, it must notify the transferee of the refusal within two months after the date on which the instrument of transfer was lodged with RELX PLC.
For those members holding uncertificated shares, such transfers must be conducted using a relevant system as defined in the UK Uncertificated Securities Regulations 2001.
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Untraced shareholders
RELX PLC is entitled to sell any of its ordinary shares if;
if:
| 1. | during the period of |
| 2. | during the period of three months following the publication of any advertisement stating the intent to sell, RELX PLC has received no indication of the location, or existence of the member, or the person entitled to the shares by way of transmission. |
Dividend Rights
Subject to the provisions of the Companies Act, the shareholders may by ordinary resolution declare a dividend no larger than the amount recommended by the Board.Board requiring a simple majority of the votes cast. Interim dividends may also be payable if the Board deems that there is sufficient profit available for distribution. Except as otherwise provided by the rights attached to the shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is declared. No dividend payable in respect of a share shall bear interest against RELX PLC, unless otherwise provided by the rights attached to the share.
Dividends may only be paid if RELX PLC has profits available for distribution. “Profits available for distribution” is defined in the Companies Act as “accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made.” RELX PLC is not permitted to pay dividends out of share capital, which includes share premium. Profits available for distribution are determined in accordance with generally accepted accounting principles at the time the relevant accounts are prepared. RELX PLC will not be permitted to make a distribution if, at the time the proposed dividend is to be made, the amount of its net assets is less than the aggregate of its called-up share capital and undistributable reserves, or if the proposed dividend will reduce the net assets below such amount.
Dividends may be paid in cash, or (subject to shareholder approval and to the procedure set out in the Articles) by way of a distribution of assets, including, without limitation, paid up shares or debentures of another body corporate or further issuance of fully paid-up RELX PLC Shares.
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Unclaimed dividends
Any dividend which remains unclaimed for 12 years from the date when it became due for payment shall, if the Board so resolves, be forfeited and cease to be owed by RELX PLC to the shareholder. RELX PLC may stop issuing dividend cheques or warrants:
| 1. | Where on at least two consecutive occasions dividend cheques/warrants are left uncashed or returned undelivered; or |
| 2. | Where after one such occasion reasonable enquiries have failed to establish an updated address. |
If the member goes on to claim a dividend or warrant, RELX PLC must recommence issuing dividend cheques and warrants.
Distribution of assets on winding up
In the event of RELX PLC being wound up, on the authority of a special resolution of RELX PLC and subject to the UK Insolvency Act 1986 (as amended) the liquidator may:
| 1. | Divide among the members the whole or any part of the assets of RELX PLC. |
| 2. | Value any assets and determine how the division should be made between the members or different classes of members. |
| 3. | Place the whole or any part of the assets in trust for the benefit of the members and determine the scope and terms of these trusts. |
A member cannot be compelled to accept an asset with an inherent liability.
Variation of rights
Subject to the Companies Act, where the capital of RELX PLC is divided into different classes of shares, the unique rights attached to the respective classes may be varied or cancelled:
| 1. | With the written consent of the holders of 75% in nominal value of the issued shares of the class (excluding any treasury shares held in that class); or |
| 2. | By authority of a special resolution passed at a separate general meeting of the holders of the shares of the class. |
General meetings of shareholders
Under the RELX PLC Articles, a resolution put to the vote of a general meeting will be decided on a show of hands unless a vote by poll is duly demanded.
Subject to the Companies Act, RELX PLC must hold a general meeting as its annual general meeting within six months from January 1 every year. The Board may convene a general meeting when necessary and must do so promptly upon requisition by the shareholders. The notice period for annual general meetings is 21 clear days and 14 clear days for other general meetings. Subject to the Companies Act and the Articles, the notice shall be sent to every member at their registered address. If, on two consecutive occasions notices are sent to a membersmember’s registered address and have been returned undelivered the member shall not be entitled to receive any subsequent notice.
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Voting rights
On a vote on a resolution by way of a show of hands, every shareholder or duly appointed proxy who is present at the general meeting in person has one vote. On a vote on a resolution by way of a poll every shareholder present in person or by proxy has one vote for every shareRELX PLC Share of which he, she or it is the holder.
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In the case of joint holders of a RELX PLC Share, the vote of the senior shareholder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names of the holders are listed in the register of shareholders.
Subject to the provisions of the Companies Act, a poll may be demanded by: (i) the chair of the meeting; (ii) at least five shareholders present in person or by proxy having the right to vote on the resolution (except on the election of the chair of the meeting or on a question of adjournment); (iii) any shareholder or shareholders present in person or by proxy representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding any voting rights attached to any RELX PLC Shares held as treasury shares); or (iv) any shareholder or shareholders present in person or by proxy holding shares conferring a right to vote on the resolution, being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all shares conferring that right (excluding any shares conferring a right to vote on the resolution which are held as treasury shares).
No member is entitled to vote on a partly paid share. The Board also has the discretion to prevent a member from voting in person or by proxy if they are in default of a duly served notice under section 793 of the Companies Act, concerning a request for information about interest in RELX PLC’s shares.
Directors’ Interests
Subject to the provisions of the Companies Act, where a Director declares an interest to the Board, the Board may authorise the matter proposed to it which would otherwise constitute a conflict of interest and place a Director in breach of their statutory duty. Such authorisation is effective where the Director in question is not included in the quorum for the meeting and the matter was agreed without their vote, or would have been agreed to had their vote not been counted. A Director’s duty to declare an interest does not apply in the circumstances provided for by section 177(5) and 177(6) of the Companies Act. A Director:
| 1. | May be a party to, or otherwise interested in, any transaction or arrangement with RELX PLC or in which RELX PLC is directly or otherwise interested; |
| 2. | May act solely or with his firm in a professional capacity (not as auditor) for RELX PLC and shall be entitled to remuneration for his professional services, notwithstanding his position as Director; and |
| 3. | May be interested in a body corporate in which RELX PLC is directly or indirectly interested or where the relationship between the Director and the body corporate is at the request or direction of RELX PLC. |
A Director with a declared interest that has been authorised by the Board, is not accountable to RELX PLC or its shareholders for any benefits received.
Directors’ Remuneration
The remuneration of any Executive Director shall be determined by the Board in accordance with RELX PLC’s Remuneration Policy and may include (without limitation) admission to or continuance of membership of any scheme (including share acquisition schemes), life assurance, pension provision or other such benefits payable to the Director on or after retirement, or to his dependants on or after death.
For Directors who do not hold an executive position in RELX PLC, their ordinary remuneration shall not exceed in aggregate £500,000 per annum or such higher amount as RELX PLC may determine by ordinary resolution from time to time.time (and on June 27, 2018, an ordinary resolution was passed to increase such amount to £2,000,000 per annum). Each Director shall be paid a fee for their services which is deemed to accrue from day to day at such rate as determined by the Board.
The Directors may grant extra remuneration to any Director who does not hold executive office but sits on any committee of the Board, or performs any other special services at the request of RELX PLC. This extra remuneration may be paid in addition to, or in substitution for the ordinary remuneration.
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Directors’ appointment/retirement/removal
The Board may appoint a person willing to act as Director, either to fill a vacancy or as an additional Director, provided the upper limit set by the Articles is not exceeded. RELX PLC may by ordinary resolution remove any Director from office, no special notice need be given and no Director proposed for removal under the Articles has a right of protest against such removal. Directors are not required to hold any shares by way of qualification. Directors are not subject to an age limit requirement for retirement.
Borrowing powers
Subject to the Companies Act, the Board may exercise all the powers of RELX PLC to borrow money, guarantee, indemnify, mortgage or charge its undertaking, property, assets (present and future) and uncalled capital and to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of RELX PLC or of any third party. Without the authority of an ordinary resolution the directors are prohibited from borrowing in excess of an amount equal to the higher of (i) eight thousand million pounds;£12,000,000,000 and (ii) two and a half times the adjusted total of capital and reserves.
Indemnity
Subject to the Companies Act, without bar to any other existing indemnity entitlements, RELX PLC may use its assets to indemnify a Director against liability incurred through negligence, default, breach of duty or breach of trust in relation to RELX PLC’s affairs.
Redemption provision
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RELX NV
The following is a summarySubject to the provisions of the principal provisionsCompanies Act, and without prejudice to any rights attached to any existing shares or class of RELX NV’s Articles of Association (the “Articles”). As a summary, it is not exhaustive and is qualified in its entirety by reference to Dutch law and the Articles as they read in the Dutch language. The Articles were last amended before a civil law notary in Amsterdam on June 30, 2015 after a shareholders’ resolution was passed to approve such amendment at the Annual General Meeting held on April 22, 2015. A copy of the current Articles is filed as Exhibit 1.2 to this Form20-F.
Share Capital
As at December 31, 2017 RELX NV’s issued share capital comprised 1,000.0 million ordinary shares, of 0.07 euro nominal value. At December 31, 2017 shares held in treasury totalled 56.4 million. Of these 3.8 million ordinary shares were held by the Employee Benefit Trust and 52.6 million shares were held in treasury by RELX NV.
At the 2017 Annual General Meeting, shareholders passed a resolution delegating the authority to the Board to acquire shares in RELX NV for a period of 18 months from the date of the Annual General Meeting up to and including October 18, 2018, for the maximum amount of 10% of the issued capital. During the year, 21.4 million ordinary shares were purchased under this and the previous delegation of authority. On December 27, 2017, RELX NV cancelled 22.0 million ordinary shares held in treasury. These share purchases and cancellations are reflected in the number of ordinary shares held in treasury at December 31, 2017.
A resolution to renew the delegation of the authority to the Board to acquire shares in RELX NV will be submitted to the shareholders at the 2018 Annual General Meeting together with a proposal for approval of the reduction of RELX NV’s capital by cancellation of accumulated shares held in treasury.
Ordinary shares can be registered in a shareholder’s name or held via a book-entry deposit under the Dutch Security Depositary Act.
Issuance of shares
Shares may be issued on the basis of a resolution of the General Meeting, which can designate this authority to the Board, provided that the aggregate nominal value up to which shares may be issued under this designated authority cannot exceedone-thirdwhich are to be redeemed or are to be liable to be redeemed at the option of RELX PLC or the holder. The board may determine the terms, conditions and manner of redemption of shares provided that it does so before the shares are allotted.
Capital call provision
Subject to the terms of allotment, the board may from time to time make calls on the members in respect of any moneys unpaid on their shares (whether in respect of nominal value or premium). Each member shall (subject to receiving at least 14 clear days’ notice specifying when and where payment is to be made) pay to RELX PLC the amount called on his shares as required by the notice. A call may be required to be paid by instalments. A call may be revoked in whole or part and the time fixed for payment of a call may be postponed in whole or part as the board may determine. A person on whom a call is made shall remain liable for calls made on him notwithstanding any subsequent transfer of the sumshares in respect of (i) RELX NV’s issued share capitalwhich the call was made. A call shall be deemed to have been made at the time when the resolution to make the designation is adopted and (ii) the aggregate nominal value of any rights granted by RELX NV to take up shares outstanding at that time.
Pre-emptive rights of existing shareholders may be restricted or excluded by a resolution of the General Meeting and inboard authorising the event of an issue of shares pursuant to a resolution of the Board, thepre-emptive rights can be restricted or excluded pursuant to a resolution of the Board if the Board is designated competent to do so by the General Meeting.
Acquisition of RELX NV’s own shares
RELX NV is entitled to acquire its own fullypaid-up shares or depositary receipts thereof, provided that either the acquisition is for no consideration or that:
An acquisition of RELX NV’s own shares other than for no consideration is only permitted if the General Meeting has granted authorisation to the Board. No voting rights may be exercised on shares held by RELX NV or a Subsidiary and no dividend shall be paid on these shares.
call was passed. The General Meeting may at the proposal of the Board resolve to reduce RELX NV’s issued share capital through cancellation of shares or through reduction of the nominal value of shares by amendment of the Articles of Association, provided that the issued share capital or thepaid-up part thereof will not drop below the amount prescribed by the Dutch Civil Code.
Transfer of shares
The transferjoint holders of a share shall require an instrument intended for such purposebe jointly and the written acknowledgement by RELX NVseverally liable to pay all calls in respect of the transfer. The transfer of the rightsit.
If a call or any instalment of a Euroclear-participant with respect to shares which are includedcall remains unpaid in whole or in part after it has become due and payable the securities depositary system of Euroclear Nederlandperson from whom it is due and payable shall be effected in accordance with the provisions of the Dutch Security Depositary Act (Wetgiraaleffectenverkeer).
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Dividend Rights
Each year the Board shall determine which part of the profits shown in the adopted profit and loss account shall be reserved. After allocation to reserves, the General Meeting shall determine the allocation of remaining profits. Distributions may be made only insofar as RELX NV’s equity exceedspay interest on the amount ofunpaid from the paid inday it became due and called up part of the issued share capital, increased by the reserves which must be kept by virtue of the law. Dividendspayable until it is paid. The interest shall be paid after adoptionat the rate fixed by the terms of allotment of the annual accounts showing that payment of dividends is permitted. Interim distributions may be payable, provided there is sufficient profit available for distribution in accordance with the aforementioned requirements as shown by interim Financial Statements.
The Board
RELX NV has a unitary board comprising Executive andNon-Executive directors. It is established board practice at RELX NV that the Executive andNon-Executive Directors meet together. In performing their duties, the Directors shall act in accordance with the interests of RELX NV and the business connected with it.
The number of Directors is determined by the Board. The number of executive directors shall at all times be less than the number ofNon-Executive Directors.
Directors shall be appointed by the General Meeting on the basis of a proposal of theNon-Executive Directors. Under the Articles, directors are appointed for a three-year term, with the possibility ofre-appointment. Notwithstanding these provisionsrelevant share or in the articles of association and in accordance with the provisionsnotice of the UK Corporate Governance Code, all Directors seek annualre-appointmentcall or, if no rate is fixed, at such rate, not exceeding 15% per annum or, if higher, the Annual General Meeting to align the arrangements regarding appointment for the Boards of RELX NV and RELX PLC.
Executive Directors
The Executive Directors are entrusted with the management of RELX NV. In performing their duties, the Executive Directors shall act in accordance with the interests of RELX NV and the business connected with it. The Board has established rules regarding the decision-making and working methods of the Executive Directors in addition to the Articles. In this context, the Board has also determined the duties for which each Executive Director in particular shall be responsible.
Non-Executive Directors
The duties of theNon-Executive Directors are to supervise the management of the Executive Directors and the general affairs in RELX NV and the business connected with it, and to assist the Executive Directors by providing advice. In performing their duties theNon-Executive Directors shall act in accordance with the interests of RELX NV and the business connected with it. TheNon-Executive Directors have established rules regarding their decision-making process and working methods in addition to the Articles.
RELX NV pursues a remuneration policy for the Executive Directors, which is determined by the General Meeting upon a proposal by theNon-Executive Directors. The Remuneration Committee of RELX Group plc makes recommendations to theNon-Executive Directors of RELX NV with regard to the remuneration policy for Executive Directors and the remuneration in all its forms for the Executive Directors.
As a general rule,Non-Executive Directors serve for two three-year terms. Individual Directors may serve up to one additional three-year term.
Suspension/dismissal
Each Director can at any time be suspended or dismissed by the General Meeting. In addition, each Executive Director can at any time be suspended by the Board.
Amendment of the Articles
Amendment of the Articles requires a shareholders’ resolution passed with an absolute majority of the votes cast, provided such resolution is passed at the proposal of the Board. Otherwise, a majority oftwo-thirds of the votes cast is required in a meeting at which at least half of RELX NV’s issued capital is represented. The notice for such a meeting must state that amendment of the Articles of Association is on the agenda. A copy of the full text of the proposed amendment of the Articles of Association must be made available free of charge to shareholders at the time of notice for the meeting. In accordance with Article 42 of the Articles of Association, only certain provisionsappropriate rate (as defined in the Articles including provisions governing appointments and dismissals of Directors can be amended upon a proposal of the Board.
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General meetings of shareholders
At least once a year, a General Meeting is held. Notices of a General Meeting are posted on our website and are made in accordance with the relevant provisions of the law. This means that the meeting is called at no less than 42 calendar days notice by an announcement on the RELX Group website. The agenda and explanatory notes for the General Meeting are published in advance on the RELX Group website and are available at the listing agent and at the offices of RELX NV from the day of the notice.
The Articles of Association provide for a record date and this has been used at the recent General Meetings. In accordance with Dutch law, the record date will be the 28th day before the date of the General Meeting and the holder of sharesCompanies Act), as per the record date will be entitled to vote, irrespective of any transfer of such shares between the record date and the date of the General Meeting.
The Annual General Meeting discusses the annual report, adopts the annual accounts, resolves on a proposal to pay a dividend and votes on release from liability of the Directors as separate agenda items in the Annual General Meeting.
Conflict of Interest—Directors
A Director shall not participate in the discussions and decision-making if he has a direct or indirect personal interest in the matter which is conflicting with the interests of RELX NV and the business connected with it. In case because of this no resolution can be adopted by the Executive Directors, theNon-Executive Directors will resolve on the matter. In case because of this no resolution can be adopted by theNon-Executive Directors, the General Meeting will resolve on the matter.
Remuneration
The remuneration policy for Executive Directors is determined by the General Meeting upon a proposal of theNon-Executive Directors. The remuneration of the Executive Directors is determined by theNon-Executive Directors in line with the remuneration policy agreed by the General Meeting. With respect to remuneration in the form of shares in RELX NV and/or rights to subscribe for such shares, theNon-Executive Directors will submit a proposal for approval to the General Meeting.
TheNon-Executive Directors receive an annual remuneration. The remuneration of eachNon-Executive Director individually, is determined by the Board, with due observance to the remuneration policy forNon-Executive Directors. The maximum amount of annual remuneration shallmay be determined by the General Meeting and can only be adopted at the proposal of the Board. At the Annual General Meeting in 2011 the maximum amount of remuneration for theNon-Executive Directors was set at €600,000 per annum, for the proportion of the fees borne by RELX NV.
Dissolution of RELX NV
A resolution to dissolve RELX NV requires an absolute majority of the votes cast at the General Meeting.board. The notice for such a meeting must state that dissolution will be on the agenda. If RELX NV is dissolved by a resolution of the general meeting, the executive directorsboard shall be charged with the liquidation of RELX NV and theNon-Executive Directors with the supervision thereof, subjectat liberty to the relevant provisions of Book 2 of the Dutch Civil Code.
Assets which remain afterwaive payment of the debts shall be transferred to the holders of sharessuch interest wholly or in proportion to the nominal value of their shareholdings.
Indemnity
Under the Articles of Association, to the extent permissible by law, RELX NV shall indemnify and hold harmless each sitting and former Director against the financial consequencespart in respect of any liabilities or claims, brought by any party otherindividual member.
EXCHANGE CONTROLS
Other than RELX NV itself or its group companies,certain economic sanctions which may be in relationeffect from time to acts or omissions performed or committed in that person’s capacity of director.
Theretime, there is currently no UK or Dutch legislation restricting the import or export of capital or affecting the remittance of dividends or other payments to holders of respectively, RELX PLC ordinary shares who arenon-residents of the United Kingdom and RELX NV ordinary shares who arenon-residents of the Netherlands.Kingdom.
There are no limitations relating only tonon-residents of the United Kingdom under UK law (subject to the effect of certain economic sanctions which may be in effect from time to time) or RELX PLC’s Articles on the right to be a holder of, and to vote, RELX PLC ordinary shares, or tonon-residentsshares.
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TAXATION
The following discussion is a summary under present law and tax authority practice of the material UK Dutch and US federal income tax considerations relevant to the purchase, ownership and disposal of RELX PLC ordinary shares or ADSs and RELX NV ordinary shares or ADSs. This discussion applies to you only if you are a US holder, you hold your ordinary shares or ADSs as capital assets and you use the US dollar as your functional currency. It does not address the tax treatment of US holders subject to special rules, such as banks and other financial institutions, dealers or traders in securities or currencies, insurance companies, real estate investment trusts, regulated investment companies, traders in securities that elect to mark-to-market, tax-exempt entities, partnerships or otherpersons liable for alternative minimum tax, pass-through entities for US federal income tax purposes (including entities treated as partnerships or S-corporations for such purposes) holders which own (actually or constructively) 10% or more of RELX PLC RELX NV or RELX Group plc shares (as measured by vote or value), persons holding ordinary shares or ADSs as part of a hedging, straddle, conversion or constructive sale transaction, or persons that are resident or domiciled in the UKUnited Kingdom (or who have ceased to be resident in the United Kingdom or became treated as resident outside the UKUnited Kingdom for the purpose of a double tax treaty (treatynon-resident) within the past five years of assessment, or, for departures before April 6, 2013, who have ceased to be resident or ordinarily resident or become treatynon-residentwithin the past five years of assessment) and persons that are resident in the Netherlands.. The summary also does not discuss the US federal alternative minimum tax, US estate and gift tax laws or the tax laws of particular states or localities in the US.United States.
This summary does not consider your particular circumstances. It is not a substitute for tax advice. We urge you to consult your own independent tax advisors about the income, capital gains and/or transfer tax consequences to you in light of your particular circumstances of purchasing, holding and disposing of ordinary shares or ADSs.
As used in this discussion, “US holder” means a beneficial owner of ordinary shares or ADSs that is for US federal income tax purposes: (i) an individual US citizen or resident, (ii) a corporation partnership or(or any other business entity treated as a corporation for US federal income tax purposes) created or organised under the laws of the United States, any state thereof or the District of Columbia, (iii) a trust (a) that is subject to the control of one or more US persons and the primary supervision of a US court or (b) that has a valid election in effect under US Treasury regulations to be treated as a US person or (iv) an estate the income of which is subject to US federal income taxation regardless of its source.
UK Taxation
Dividends
Under current UK taxation legislation, no tax is required to be withheld at source from dividends paid on the RELX PLC ordinary shares or ADSs. Dividends payable on the ADSs or RELX PLC ordinary shares should not be chargeable to UK tax in the hands of anon-UK resident unless such person (i) is a company carrying on a trade in the UKUnited Kingdom through a UK permanent establishment, or (ii) carries on a trade (or profession or vocation) in the UKUnited Kingdom and the dividends are a receipt of that trade.
Capital Gains
ShareholdersNon-UK resident shareholders may be liable for UK taxation on capital gains realised on the disposal of their RELX PLC ordinary shares or ADSs if at the time of the disposal the shareholder carries on a trade, profession or vocation in the United Kingdom through a branch or agency, or in the case of a company a permanent establishment, and such ordinary shares or ADSs are or have been used, held or acquired for the purposes of such trade, profession, vocation, branch, agency or permanent establishment.
UK Stamp Duty and Stamp Duty Reserve Tax
Current UK law includes a provision whereby UK stamp duty reserve tax (SDRT) or UK stamp duty is payable upon the transfer or issue of RELX PLC ordinary shares to the depositary in exchange for RELX PLC ADSs evidenced by ADRs. For this purpose, the current rate of stamp duty and SDRT is 1.5%, applied, in each case, to: (i) the issue price when the ordinary shares are issued; (ii) the amount or value of the consideration where shares are transferred for consideration in money or money’s worth; or (iii) the value of the ordinary shares in any other case. Following certain EU litigation, HMRC have accepted that they willwould no longer seek to apply the 1.5% SDRT charge on an issue of shares into a clearance service or depositary receipt system (or a transfer of shares into a clearance service or depositary receipt system, where such transfer is integral to the raising of capital by the company concerned) on the basis that the charge iswas not compatible with EU law. TheFollowing the UK’s departure from the EU, such pre-existing EU law rights, recognised in litigation, were preserved as a domestic law matter following the end of the implementation period on December 31,
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2020 pursuant to provisions of the UK European Union (Withdrawal) Act 2018. In addition, however, on September 22, 2022 the UK government announced on 22 November 2017 as part of its Autumn Budget that it will not reintroduce such 1.5% charge once the UK leaves the EU in 2019. Accordingly no UK SDRT or UK stamp duty is payable upon the issue of RELX PLC sharesintroduced to the depositaryHouse of Commons the Retained EU Law (Revocation and Reform) Bill which, if enacted without relevant amendment, would have the effect that such pre-existing EU law rights, recognised in exchangelitigation, would by default (that is, absent the exercise of a regulation-making power to restate or reproduce such rights in domestic law) cease to be recognised after December 31, 2023; and in that eventuality, such pre-existing EU law rights would cease to restrict the application of the rules providing for RELX PLC ADSs evidenced by ADRs (or upon the transfer of RELX PLC shares to the depositary in exchange for RELX PLC ADSs evidenced by ADRs, where such transfer is integral to the raising of capital by RELX PLC). HMRC’s view is that the 1.5%. SDRT or stamp duty charge will continue to apply to a transfer of shares into a clearance service or depositary receipt system, where such transfer is not an integral partcharge. In view of the raising of capital by the company concerned.continuing uncertainty, specific professional advice should be sought before incurring a 1.5% stamp duty or stamp duty reserve tax charge in any circumstance.
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Provided that the relevant instrument of transfer is not executed in the UK and remains outside the UK, noNo UK stamp duty should in practice be payable on the transfer of RELX PLC ADSs.ADSs, provided that no instrument of transfer is entered into (which should not be necessary). An agreement to transfer RELX PLC ADSs in the form of ADRs willshould not give rise to a liability to SDRT.
A transfer of RELX PLC ordinary shares by the depositary to an ADS holder where there is no transfer of beneficial ownership will not be chargeable to UK stamp duty or SDRT.
Purchases of RELX PLC ordinary shares, as opposed to ADSs, will generally give rise to UK stamp duty or SDRT at the time of transfer or agreement to transfer, normally at the rate of 0.5% of the amount payable for the ordinary shares. SDRT and UK stamp duty are usually paid by the purchaser. If the ordinary shares are later transferred to the depositary, additional UK stamp duty or SDRT may be payable as described above.
Inheritance tax
Subject to certain provisions relating to trusts and settlements, RELX PLC ordinary shares or ADSs held by an individual shareholder who is domiciled in the United States for the purposes of the Convention between the United States and the United Kingdom relating to estate and gift taxes and is not a UK national as defined in the Convention will not generally be subject to UK inheritance tax on the individual’s death (whether held on the date of death or gifted during the individual’s lifetime, and provided any applicable US federal gift or estate tax liability is paid), except where the ordinary share or ADS is part of the business property of a UK permanent establishment of the individual or pertains to a UK fixed base of an individual who performs independent personal services.
Dutch Taxation
Withholding tax
Dividends distributed to you by RELX NV are normally subject to a withholding tax imposed by the Netherlands at a rate of 15%, which equals the rate of tax that the Netherlands is generally allowed to levy under theUS-Netherlands income tax treaty. As a consequence, no administrative procedures for a partial relief at source from or a refund of Dutch dividend withholding tax need be complied with in respect of dividend distributions by RELX NV. Dividends include, among other things, stock dividends unless the dividend is distributed out of recognisedpaid-in share premium for Dutch tax purposes.
Taxation of dividends and capital gains
You will not be subject to any Dutch taxes on dividends distributed by RELX NV (other than the withholding tax described above) or any capital gain realised on the disposal of RELX NV ordinary shares or ADSs provided that (i) the RELX NV ordinary shares or ADSs are not attributable to an enterprise or an interest in an enterprise that you carry on, in whole or part through a permanent establishment or a permanent representative in the Netherlands, (ii) you do not have a substantial interest or a deemed substantial interest in RELX NV (generally, 5% or more of either the total issued and outstanding capital or the issued and outstanding capital of any class of shares) or, if you have such an interest, (a) it forms part of the assets of an enterprise, (b) you do not hold such interest with the avoidance of Netherlands (or foreign) (withholding) tax as (one of) the main purpose(s), or (c) such interest does not form part of an artificial structure or series of structures (such as structures which are not put into place for valid business reasons reflecting economic reality), and (iii) if you are an individual, such dividend or capital gain from your RELX NV ordinary shares or ADSs does not form benefits from miscellaneous activities(“resultaatuitoverigewerkzaamheden”) in the Netherlands. Benefits from miscellaneous activities in the Netherlands include income and gains derived from the holding, whether directly or indirectly, of (a combination of) shares, debt claims or other rights (together, a “lucrative interest”) that the holder thereof has acquired under such circumstances that such income and gains are intended to be remuneration for work or services performed by such holder (or a related person) in the Netherlands, whether within or outside an employment relation, where such lucrative interest provides the holder thereof, economically speaking, with certain benefits that have a relation to the relevant work or services.
US Federal Income Taxation
Holders of the ADSs generally will be treated for US federal income tax purposes as owners of the ordinary shares represented by the ADSs. Accordingly, deposits of ordinary shares for ADSs and withdrawals of shares for ADSs will not be subject to US federal income tax.
Dividends
Dividends on RELX PLC ordinary shares or ADSs or RELX NV ordinary shares or ADSs (including any Dutch tax withheld) will generally be included in your gross income as ordinary dividend income from foreign sources. The dollar amount recognised on receiving a dividend in pounds sterling or euros will be based on the exchange rate in effect on the date the
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depositary receives the dividend, or in the case of ordinary shares on the date you receive the dividend, as the case may be, whether or not the payment is converted into US dollars at that time. Any gain or loss recognised on a subsequent disposition or conversion of pounds sterling or euros for a different US dollar amount generally will be US source ordinary income or loss. Dividends received will not be eligible for the dividends received deduction available to US corporations. Dividends received will generally be included in net investment income for purposes of the 3.8% Medicare contribution tax applicable to certainnon-corporate US holders.
With respect to certain non-corporate US holders, who are individuals, certain dividends received from a qualified foreign corporation may be subject to reduced rates of taxation. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of certain comprehensive income tax treaties with the United States. United States Treasury Department guidance indicates that the United Kingdom is a country with which the United States has aan income tax treaty in force that meets these requirements, and RELX PLC believes it is eligible for the benefits of this treaty. Additionally, the same guidance indicates that the Netherlands is also a country with which the United States has a treaty in force that meets the above requirements, and RELX NV believes it is eligible for the benefits of thisincome tax treaty. Individuals that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as “investment income” pursuant to section 163(d)(4) of the US Internal Revenue Code of 1986, as amended,other requirements will not be eligible for the reduced rates of taxation. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. US holders should consult their own tax advisors regarding the application of these rules given their particular circumstances.
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Subject to certain conditions and limitations, foreign withholding taxes on dividends withheld at the appropriate rate may be treated as foreign taxes eligible for credit or deduction against your US federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on the ordinary shares or ADSs will be treated as income from sources outside the USUnited States and will generally constitute passive category income. Further, in certain circumstances, if you have held the ordinary shares or ADSs for less than a specified minimum period during which you are not protected from risk of loss, or are obligated to make payments related to the dividends, you will not be allowed a foreign tax credit for foreign taxes imposed on the dividends on the ordinary shares or ADSs. Individuals that treat a dividend as qualified dividend income may take into account for foreign tax credit limitation purposes only the portion of the dividend effectively taxed at the highest applicable marginal rate. The rules governing the foreign tax credit are complex. You are urged toUS holders should consult yourtheir own tax advisors regarding the availability of the foreign tax credit or deduction under yourtheir particular circumstances.
Dispositions
You generally will recognise a gain or loss on the sale or other disposition of ordinary shares or ADSs in an amount equal to the difference between the amount realised upon the sale or other disposition and your adjusted basis in the ordinary shares or ADSs and the amount realised.ADSs. The gain or loss generally will be capital gain or loss. It will be long term capital gain or loss if you have held the ordinary shares or ADSs for more than one year at the time of sale or other disposition. Long term capital gains of individuals are eligible for reduced rates of taxation. Deductions for capital losses are subject to limitations. Any gain or loss you recognise generally will be treated as income from US sources for foreign tax credit limitation purposes. Gains recognised will generally be included in net investment income for purposes of the 3.8% Medicare contribution tax applicable to certain non-corporate US holders.
If you receive pounds sterling or euros on the sale or other disposition of your ordinary shares or ADSs, you will realise an amount equal to the US dollar value of the pounds sterling or eurosat the spot rate on the date of sale or other disposition (or in the case of cash basis and electing accrual basis taxpayers, if the ordinary shares or ADSs are traded on an established securities market, the settlement date for the sale or other disposition). You will have a tax basis in the pounds sterling or the euros that you receive equal to the US dollar amount received on the settlement date. Any gain or loss realised by a US holder between the sale date and the settlement date or on a subsequent disposition or conversion of pounds sterling or euros into different US dollarsdollar amount generally will be US source ordinary income or loss. US holders will generally have a tax basis in the pounds sterling or the euros that you receive equal to the US dollar value of the pound sterling or euro received at the spot rate on the settlement date. Gains recognised will generally be included in net investment income for purposes of the 3.8% Medicare contribution tax applicable to certainnon-corporate US holders.
Information Reporting and Backup Withholding Tax
Dividends from ordinary shares or ADSs and proceeds from the sale or other disposition of the ordinary shares or ADSs may be reported to the Internal Revenue Service (IRS)(“IRS”) unless the shareholder is a corporation or other exempt recipient. A backup withholding tax may apply to such amountsreportable payments unless the shareholder (i) is a corporation, (ii) provides an accurate taxpayer identification number and otherwise complies with applicable requirements of the backup withholding rules or (iii)(ii) otherwise establishes a basis for exemption. The amount of anywithheld under the backup withholding tax willrules may be allowed as a credit against the holder’s US federal income tax liability and may entitle the holder to a refund, provided the required information is timely furnished to the IRS.
Certain US holders are required to report to the IRS information about their investment in ordinary shares or ADSs not held through an account with a domestic financial institution. Investors who fail to report required information arecould become subject to substantial penalties. InvestorsUS holders should consult with their own tax advisersadvisors about the effect of this legislation onand any other reporting obligations arising from their investment in the ordinary shares or ADSs.
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DOCUMENTS ON DISPLAY
You may read and copy documents referred to in this annual report that have been filed or furnished with the SEC at the SEC’s public reference room located at 100 F Street NE, Washington, DC 20549-2521. Please call the SEC at1-800-SEC-0330 for further information on the public reference rooms and their copy charges.
The SEC also maintains a websitean internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC. This annual reportAnnual Report on Form 20-F and other information submittedfiled or furnished by us with or to the SEC may be accessed through this website.
Our internet address is www.relx.com. The information on our website is not incorporated by reference into this Annual Report on Form 20-F.
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ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
Our primary market risks are to changes in interest rates and exchange rates as well as liquidity and credit risk.
Net finance costs are exposed to interest rate fluctuations on borrowings,debt, cash and cash equivalents. Upward fluctuations in interest rates increase the interest cost of floating rate borrowingsdebt whereas downward fluctuations in interest rates decrease the interest returnearned on floating rate cash and cash equivalents. Interest expense payable on fixed rate borrowingsdebt is protected against upward fluctuationsmovement in interest rates but does not benefit from downward fluctuations.shifts. Our companies engage in foreign currency denominated transactions and are therefore subject to exchange rate risk on such transactions. Net finance costs are also exposed to changes in the fair value of derivatives (as a result of interest and exchange rate fluctuations) which are not part of a designated hedging relationship under IAS39IFRS 9 — Financial Instruments: Recognition and Measurement,‘Financial Instruments’, and to ineffectiveness that may arise on designated hedging relationships. Our management of this interest rate risk and foreign exchange rate risk is described below.
We manage a portfolio of long-term debt, short-term debt and committed bank facilities to support our capital structure and are exposed to the risk that relevant markets are closed and debt cannot be refinanced on a timely basis. In addition, the credit spread at which we borrow is exposed to changes in market liquidity and investor demand. We manage this risk by maintaining a range of borrowing facilities and debt programmes with a maturity profile to limit refinancing risk.
We have a credit exposure for the full principal amount of cash and cash equivalents held with individual counterparties. In addition, we have a credit risk from the potentialnon-performance by counterparties to financial instruments; this credit risk normally being restricted to the amounts of any hedge gain and not the full principal amount being hedged. Credit risks are managed by monitoring the credit quality of counterparties and restricting the amounts outstanding with each of them. We are also exposed to changes in the market value of our venture capital investments.
Our management of the above market risks is described in further detail in note 1917 to the consolidated financial statements under the heading ‘Financial Instruments’ on page 147pages 189 to 152194 and in note 2321 under the heading ‘Borrowings’‘Debt’ on page 154pages 195 to 155 to the consolidated financial statements196 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
Management of Interest Rate Risk and Foreign Exchange Rate Risk
We seek to limitmanage our risk to movements in interest and exchange rates by means of derivative financial instruments, including interest rate swaps interest rate options, forward rate agreements and forward foreign exchange contracts. We only enter into derivative financial instruments to hedge (or reduce) the underlying risks described above.
We enter into interest rate swaps in order to achieve an appropriate balance between fixed and floating rate borrowings,debt, cash and cash equivalents and to manage the risk associated with movements in interest rates. Interest rate swaps are used to hedge the effects of fluctuating interest rates on floating rate borrowings,debt, cash and cash equivalents by allowing us to fix the interest rate on a notional principal amount equal to the principal amount of the underlying floating rate cash, cash equivalents or borrowingsdebt being hedged. They are also used to swap fixed interest rates payable onrate long term borrowings for adebt to floating rate. Such swaps may be used to swap a wholean entire fixed rate bond for floating rate for its full term or they may be used to swap a portion of the periodprincipal amount or a portion of the principal amount forterm of the borrowing to floating rate.
Forward swaps and forward rate agreements are entered into to hedge interest rate exposures known to arise at a future date. These exposures may include new borrowings or cash deposits to be entered into at a future date or future rollovers of existing borrowings or cash deposits. Interest exposure arises on future, new and rollover borrowings and cash deposits because interest rates can fluctuate between the time a decision is made to enter into such transactions and the time those transactions are actually entered into. The purpose of forward swaps and forward rate agreements is to fix the interest cost on future borrowings or interest return on cash investments at the time it is known such a transaction will be entered into. The fixed interest rate, the floating rate index (if applicable) and the time period covered by forward swaps and forward rate agreements are known at the time the agreements are entered into. The use of forward swaps and forward rate agreements is limited to hedging activities; consequently no trading position results from their use. The hedging effect of forward swaps and forward rate agreements is the same as interest rate swaps. Similarly, we use forward foreign exchange contracts to hedge the effects oftransactional exposure arising from exchange rate movements on our foreign currency revenue and operating costs.
Interest rate options protect against fluctuating interest rates by enabling us to fix the interest rate on a notional principal amount of borrowings or cash deposits (in a similar manner to interest rate swaps and forward rate agreements) whilst at the same time allowing us to improve the fixed rate if the market moves in a certain way.
Where net finance costs are exposed to changes in the fair value of derivatives (as a result of interest and exchange rate fluctuations), we manage this risk by designating derivatives in a highly effective hedging relationship unless the potential change in their fair value is deemed to be insignificant.
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Derivatives are used to manage the risk associated with interest rate and exchange rate movements and the Group does not enter into speculative derivatives. Derivatives used by the Group for hedging a particular risk are not specialised and are generally available from numerous sources.
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Sensitivity Analysis
The following analysis sets out the sensitivity of the fair value of our financial instruments to selected changes in interest rates and exchange rates. The range of changes represents our view of the changes that are reasonably possible over a one yearone-year period.
The fair values of interest rate swaps interest rate options, forward rate agreements and forward foreign exchange contracts set out below represent the replacement costs calculated using market rates of interest and exchange at December 31, 2017.2022. The fair value of long term borrowingslong-term debt has been calculated by discounting expected future cash flows at market rates.
Our use of financial instruments and our accounting policies for financial instruments are described more fully in note 1917 to the consolidated financial statements as set forth under the heading ‘Financial Instruments’ on page 147pages 189 to 152194 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and are incorporated herein by reference to Exhibit 15.2.
(a) Interest Rate Risk
The following sensitivity analysis assumes an immediate 100 basis point change in interest rates for all currencies and maturities from their levels at December 31, 20172022 with all other variables held constant.
| | | | | | | | | | | | | | | | | | |
|
| Fair Value |
| Fair Value Change |
| Fair Value |
| Fair Value Change | ||||||||||
|
| December 31, |
| +100 |
| -100 |
| December 31, |
| +100 |
| -100 | ||||||
Financial Instrument |
| 2021 |
| basis points |
| basis points |
| 2022 |
| basis points |
| basis points | ||||||
| | (In millions) | | | | | | | | (In millions) | | | | | | | ||
Short-term debt | | £ | (131) |
| £ | — |
| £ | — |
| £ | (102) |
| £ | — |
| £ | — |
Long-term debt (including current portion) | |
| (6,346) |
| | 293 |
| | (318) |
| | (6,476) |
| | 211 |
| | (226) |
Interest rate swaps (swapping fixed rate to floating) | |
| 30 |
| | (78) |
| | 83 |
| | (216) |
| | (84) |
| | 90 |
Interest rate swaps (swapping floating rate to fixed) | |
| (2) |
| | — |
| | — |
| | — |
| | — |
| | — |
Financial Instrument | Fair Value December 31, 2017 | Fair Value Change | Fair Value December 31, 2016 | Fair Value Change | ||||||||||||||||||||
| +100 basis points | -100 basis points | +100 basis points | -100 basis points | |||||||||||||||||||||
| (In millions) | (In millions) | |||||||||||||||||||||||
Short-term borrowings | £ | (464 | ) | £ | — | £ | — | £ | (521 | ) | £ | — | £ | — | ||||||||||
Long-term borrowings (including current portion) | (4,717 | ) | 222 | (241 | ) | (4,727 | ) | 207 | (226 | ) | ||||||||||||||
Interest rate swaps (swapping fixed rate debt to floating) | 47 | (100 | ) | 108 | (7 | ) | (77 | ) | 83 | |||||||||||||||
A 100 basis point change in interest rates would not result in a material change to the fair value of other financial instruments.
At December 31, 2017, 44%2022, 58% of gross borrowings are eitherdebt was at fixed rate or have been fixed through the use of interest rate swaps, forward rate agreements and options.rate. A 100 basis point reduction in interest rates would result in an estimated decrease in net finance costs of £26£21 million (2016:and £25 million),million in 2021 and 2022, respectively, based on the composition of financial instruments including cash, cash equivalents, bank loans and commercial paper borrowingsdebt at December 31, 2017.2021 and December 31, 2022, respectively. A 100 basis points rise in interest rates would result in an estimated increase in net finance costs of £26£21 million (2016:and £25 million).million in 2021 and 2022, respectively.
(b) Foreign Exchange Rate Risk
The following sensitivity analysis assumes an immediate 10% change in all foreign currency exchange rates against sterling from their levels at December 31, 20172022 with all other variables held constant. A +10% change indicates a strengthening of the currency against sterling and a-10% change indicates a weakening of the currency against sterling.
| | | | | | | | | | | | | | | | | | |
|
| Fair Value | | | | | | | | Fair Value | | | | | | | ||
| | December 31, | | Fair Value Change | | December 31, | | Fair Value Change | ||||||||||
Financial Instrument |
| 2021 |
| +10% |
| -10% |
| 2022 |
| +10% |
| -10% | ||||||
| | (In millions) | | | | | | | | | (In millions) | | | | | | | |
Cash and cash equivalents |
| £ | 113 |
| £ | 10 |
| £ | (10) |
| £ | 334 |
| £ | 32 |
| £ | (32) |
Short-term debt | |
| (131) | |
| (13) | |
| 13 |
| | (102) |
| | (10) |
| | 10 |
Long-term debt (including current portion) | |
| (6,346) | |
| (629) | |
| 629 |
| | (6,476) |
| | (644) |
| | 644 |
Lease receivables | |
| 2 | |
| — | |
| — |
| | 5 |
| | — |
| | — |
Interest rate swaps (including cross currency interest rate swaps) | |
| 28 | |
| 3 | |
| (3) |
| | (216) |
| | (22) |
| | 22 |
Forward foreign exchange contracts | |
| 41 | |
| (154) | |
| 154 |
| | (21) |
| | (82) |
| | 82 |
Financial Instrument | Fair Value December 31, 2017 | Fair Value Change | Fair Value December 31, 2016 | Fair Value Change | ||||||||||||||||||||
| +10% | -10% | +10% | -10% | |||||||||||||||||||||
| (In millions) | (In millions) | |||||||||||||||||||||||
Cash and cash equivalents | £ | 111 | £ | 11 | £ | (11 | ) | £ | 162 | £ | 16 | £ | (16 | ) | ||||||||||
Short-term borrowings | (464 | ) | (20 | ) | 20 | (521 | ) | (33 | ) | 33 | ||||||||||||||
Long-term borrowings (including current portion) | (4,717 | ) | (441 | ) | 441 | (4,727 | ) | (410 | ) | 410 | ||||||||||||||
Interest rate swaps (including cross currency interest rate swaps) | 47 | 5 | (5 | ) | (3 | ) | (1 | ) | 1 | |||||||||||||||
Forward foreign exchange contracts | 11 | (78 | ) | 78 | (123 | ) | (47 | ) | 47 | |||||||||||||||
A 10% change in foreign currency exchange rates would not result in a material change to the fair value of other financial instruments.
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ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Fees and charges for American Depositary Receipt (ADR) holders
Citibank N.A., as depositary for the RELX PLC and RELX NV ADR programmes,programme, collects its fees for delivery and surrender of American Depositary Shares (ADSs) directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deductions from cash distributions or by directly billing investors or by charging the book-entry system Financial Statementsaccounts of participants acting for them. The depositary may generally refuse to providefee-attracting services until its fees for those services are paid.
| | |
Persons depositing or withdrawing shares must pay | For | |
| | |
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | | Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property (in certain circumstances volume discounts may be available) |
| | |
| | Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates |
| | |
$0.05 (or less) per ADS | | Any cash distribution to ADS registered holders |
| | |
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs | | Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders |
| | |
$0.05 (or less) per ADS per calendar year | | Depositary services |
| | |
Registration or transfer fees | | Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares |
| | |
Expenses of the depositary | | Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) |
| | |
| | Converting foreign currency to US dollars |
| | |
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes | | As necessary |
| | |
Any charges incurred by the depositary or its agents for servicing the deposited securities | | As necessary |
Fees and other payments made by the depositary to the Group
In consideration of acting as depositary, Citibank N.A. has agreed to make certain reimbursements and payments to us on an annual basis for expenses related to the administration and maintenance of the ADR programmesprogramme including, but not limited to, New York Stock Exchange listing fees, investor relations expenses, or any other programme related expenses. The depositary has also agreed to pay the standardout-of-pocket administrative, maintenance and shareholder services expenses for providing services to the registered ADR holders. It has also agreed with us to waive certain standard fees associated with promotional services, programme visibility campaigns and programme analytic reporting. In certain instances, the depositary has agreed to provide additional annual reimbursements and payments to us based on any applicable performance indicators relating to the ADR facility. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us is not necessarily tied to the amount of fees the depositary collects from investors.
From January 1, 20172022 to February 14, 2018,23, 2023, we received a reimbursement of $345,000,$175,000, net of withheld taxes, from the depositary for New York Stock Exchange listing fees, investor relations expenses and other programme related expenses, in connection with the ADR facility.
56
49
PART II
ITEM 15: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
RELX PLC and RELX NV areis required to comply with applicable US regulations, including the US Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), insofar as they apply to foreign private issuers. Accordingly, RELX PLC and RELX NV havehas established a Disclosure Committee comprising the company secretariessecretary of RELX PLC and RELX NV and other senior RELX managers appointed to provide assurance to the Chief Executive Officer and Chief Financial Officer of RELX PLC and RELX NV.PLC. The committee has reviewed and evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2017.2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of RELX PLC and RELX NV have concluded that the disclosure controls and procedures for RELX Group, RELX PLC and RELX NV are effective as of the end of the period covered by this report.Annual Report on Form 20-F.
Management’s Annual Report on Internal Control over Financial Reporting
In accordance with Section 404 of the Sarbanes-Oxley Act, management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a — 13a–15(f) and 15d — 15d–15(f) under the Exchange Act, as amended. The internal controls over financial reporting of RELX GroupPLC are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of the financial statements of RELX Group, RELX PLC and RELX NV would be prevented or detected.
Management conducted an evaluation of the effectiveness of its internal controls over financial reporting based on the framework inInternalControl-IntegratedFramework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the internal controls over financial reporting of RELX Group, RELX PLC and RELX NV were effective as of December 31, 2017.2022.
Certifications by the Chief Executive Officer and Chief Financial Officer of RELX PLC and RELX NV as required by the Sarbanes-Oxley Act are submitted as exhibits to this Annual Report on Form20-F (see “Item 19: Exhibits” on pagesS-3 andS-4).
Ernst & Young LLP have audited the consolidated financial statements for the fiscal year ended December 31, 20172022 and have audited the effectiveness of internal controls over financial reporting as at December 31, 2017.2022. Their report in respect of RELX Group is included herein.
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50
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the MembersShareholders and Board of Directors of RELX PLC and the Shareholders and the Board of Directors of RELX NV
Opinion on Internal Control over Financial Reporting
We have audited the Group’s (comprising RELX PLC, RELX NV, RELX Group plc and its subsidiaries, joint ventures and associates)PLC’s (the ‘Group’s’) internal control over financial reporting as of December 31, 2017,2022, based on criteria established in Internal Control — Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2022, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Group (comprising RELX PLC, RELX NV, RELX Group plc and its subsidiaries, joint ventures and associates) as at December 31, 20172021 and 2016,2022, and the related consolidated statements of income statement, comprehensive income, cash flows, and changes in equity for each of the twothree years in the period ended December 31, 2017,2022, and the related notes of the Group and our report dated February 14, 201815, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
|
58London, United Kingdom
February 15, 2023
51
Internal Control over Financial Reporting
Management, including the Chief Executive Officer and Chief Financial Officer of RELX PLC, and RELX NV, have reviewed whether or not during the period covered by the annual report,this Annual Report on Form 20-F, there have been any changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the internal controls over financial reporting of RELX Group plc, RELX PLC and RELX NV.PLC. Based on that review, the Chief Executive Officer and Chief Financial Officer of RELX PLC and RELX NV have concluded that there have been no such changes.
An outline of the internal control structure is set out below.
RELX PLC and RELX NV
The BoardsBoard of RELX PLC and RELX NV have eachhas adopted a schedule of matters which are required to be brought to themit for decision. During 2017,2022, the BoardsBoard of RELX PLC and RELX NV exercised independenta supervisory rolesrole over the activities and systems of internal control of RELX Group plc. In relation to RELX Group plc, the Boards of RELX PLC and RELX NV approved the strategy and the annual budgets, and received regular reports on the operations, including the treasury and risk management activities. Major transactions proposed by the Board of RELX Group plc require the approval of the Boards of both RELX PLC and RELX NV.Group.
The RELX PLC and RELX NV Audit CommitteesCommittee met on a regular basis to review the systems of internal control and risk management of RELX Group plc, which holds all of our business and subsidiaries and controls our financing activities.the Group.
RELX Group plc
The Board of RELX Group plc implemented an ongoing process for identifying, evaluating, monitoring and managing the principal risks faced by its respective businesses. These processes were in place throughout the year ended December 31, 2017 and up to the date of the approvals of this Annual Report on Form20-F.Audit Committee
RELX Group plcPLC has an established framework of procedures and internal controls, with which the management of each business is required to comply. Group businesses are required to 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. The Board of RELX Group plc has adopted a schedule of matters that are required to be brought to it for decision.
RELX Group plc has a Code of Ethics and Business Conduct that provides a guide for achieving its business goals and requires officers and employees to behave in an open, honest, ethical and principled manner. The code also outlines confidential procedures enabling employees to report any concerns about compliance, or about the Group’s financial reporting practice. The code is published on our website, www.relx.com. The information on our website is not incorporated by reference into this report.
Each business area has identified and evaluated its principal risks, the controls in place to manage those risks and the levels of residual risk accepted. Risk management and control procedures are embedded into the operations of the business and include the monitoring of progress in areas for improvement that come to management and board attention. The principal risks identified include protection of IT systems and data, challenges to intellectual property rights, management of strategic and operational change, evaluation and integration of acquisitions, and recruitment and retention of personnel. Further detail on the principal risks facing the Group is set out under the heading “Risk Factors” on pages 6 to 8.
The principal risks facing the RELX Group plc 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 we are managing our business risks effectively and in a coordinated manner across the business with clarity on the respective responsibilities and interdependencies. Litigation and other legal and regulatory matters are managed by legal directors in the business.
The RELX Group plc Audit Committee receives regular reports on the management of material risks and reviews these reports. The Audit Committee also receives regular reports from both internal and external auditors on internal control and risk management matters. In addition, each business area is required, at the end of the financial year, to review the effectiveness of internal controls and risk management and report its findings on a detailed basis to the management of RELX Group plc. These reports are summarised and, as part of the annual review of effectiveness, submitted to the Audit Committee of RELX Group plc. The Chairman of the Audit Committee reports to the Board on any significant internal control matters arising.
Audit Committees
RELX Group plc, RELX PLC and RELX NV have established Audit Committees which comprise onlyNon-Executive directors, Directors, all of whom are independent. The Audit Committees,Committee, which meetmeets regularly, arewas chaired by Ben van der Veer,Suzanne Wood, the
59
other members being Marike van Lier Lels, Carol Mills, Adrian HennahJune Felix, Charlotte Hogg and Suzanne Wood (from September 26, 2017). Linda Sanford was a member of the Audit Committee until September 26, 2017, she was replaced by Suzanne Wood.Andrew Sukawaty.
The main roles and responsibilities of the Audit Committees in relation to the respective companiesCommittee are set out in written terms of reference and include:
| (i) | to monitor the integrity of the financial statements, and any formal announcements relating to financial performance, reviewing significant financial reporting judgements contained in them; |
| (ii) | to review the company’s internal financial controls and the internal control and risk management systems; |
| (iii) | to monitor and review the effectiveness of the internal audit function; |
| (iv) | to make recommendations to the Board, for it to put to the shareholders for their approval in General Meeting, in relation to the appointment, reappointment and removal of the external auditor and to approve the remuneration and terms of engagement of the external auditor; |
| (v) | to review and monitor the external auditors’ independence and objectivity and the effectiveness of the audit process, taking into consideration relevant professional and regulatory requirements; and |
| (vi) | to develop and recommend policy on the engagement of the external auditor to supply non audit services, taking into account relevant ethical guidance regarding the provision of non audit services by the external audit firm, and to monitor compliance. |
The Audit Committees reportCommittee reports to the respective boardsBoard on theirits activities identifying any matters in respect of which they considerit considers that action or improvement is needed and making recommendations as to the steps to be taken.
The RELX Group plc Audit Committee fulfils this role in respect of the operating businesses and finance activities as of February 15, 2018. The RELX PLC and RELX NV Audit Committees fulfil their roles from the perspective of the management of RELX PLC and RELX NV and both Committees have access to the reports to and the work of the RELX Group plc Audit Committee.
The Audit Committees havehas explicit authority to investigate any matters within theirits terms of reference and havehas access to all resources and information that theyit may require for this purpose. The Audit Committees areCommittee is entitled to obtain legal and other independent professional advice and havehas the authority to approve all fees payable to such advisers.
The terms of reference of eachfor the Audit Committee are reviewed annually and a copy of each is published on our website, www.relx.com. The information on our website is not incorporated by reference into this report.Annual Report on Form 20-F.
52
ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT
EachThe members of RELX PLC and RELX NV has anPLC’s Audit Committee the members of which are identified in “Item 6: Directors, Senior Management and Employees”. The members of the Board of Directors of RELX PLC and members of the Board of RELX NV, have determined that each of their respectivethe Audit CommitteesCommittee contains at least one Audit Committee financial expert within the meaning of the applicable rules and regulations of the SEC. The Audit Committee financial experts serving on the RELX PLC and the RELX NV Audit Committees are Adrian Hennah,expert is Suzanne Wood. Suzanne Wood and Ben van der Veer. Each is considered independent.
ITEM 16B: CODES OF ETHICS
The Group has adopted a code of ethics (Code of Ethics and Business Conduct) that applies to all directors, officers and employees of the Group, as well as a separate code of ethics (Code of Ethics for Senior Financial Officers) that also applies to RELX PLC’s and RELX NV’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (collectively, the “Senior Financial Officers”). Both of these codes of ethics are available under “Corporate structure and governance”“Code of Ethics” of the Investor centre page at www.relx.com. The information on our website is not incorporated by reference into this report.Annual Report on Form 20-F. If the Code for Senior Financial Officers is amended or a provision waived, we intend to satisfy any disclosure obligations by posting information on the internet website set forth above within five business days of such amendment or waiver. In February 2016,June 2021, we amended the Code for Senior Financial Officers to address thosethe speed of violation reporting, required cooperation with investigations of violations, the individuals and activities covered by the Code’s conflict of interest and undue influence provisions and necessary procedures to whomobtain waivers under the policy applies, the reporting process and potential disciplinary actions for violations, and responsibilities regarding disclosure in financial reports and other disclosure.Code.
ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed by our principal accountant, Ernst & Young LLP, are set forth in note 4 to the consolidated financial statements under the heading ‘Auditors’‘Auditor’s remuneration’ on page 126172 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 and incorporated herein by reference to Exhibit 15.2.
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The Audit CommitteesCommittee of RELX PLC and RELX NV havehas adopted policies and procedures for thepre-approval of audit and non auditnon-audit services provided by the auditors. These policies and procedures are summarised below.
The terms of engagement and scope of the annual audit of the financial statements are agreed by the respective Audit CommitteesCommittee in advance of the engagement of the auditors in respect of the annual audit. The audit fees are approved by the Audit Committees.Committee.
The auditors are not permitted to providenon-audit services that would compromise their independence or violate any laws or regulations that would affect their appointment as auditors. They are eligible for selection to providenon-audit services only to the extent that their skills and experience make them a logical supplier of the services. The respective Chair of the Audit Committee mustpre-approve the provision of allnon-audit services by the auditors and will consider SEC rules and other guidelines in determining the scope of permitted services. All assignments other than audit-related work must be specificallypre-approved by the Audit CommitteesCommittee in advance of commissioning the work. Aggregatenon-audit fees must not exceed the annual audit fees in any given year, unless approved in advance by the Audit Committees.Committee. All of the audit andnon-audit services carried out in the year ended December 31, 20172022 werepre-approved under the policies and procedures summarised above.
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ITEM 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
During 20172022, the Group repurchased 23.1a total of 21.7 million RELX PLC ordinary shares and 21.4 million RELX NV ordinary shares for total consideration of £700£500 million ($620 million) to be held in treasury. A total of 44.5 million RELX PLC
During 2021 and RELX NV shares were repurchased in 2017.
| PLC | NV | |||||||||||||||
Number of ordinary shares | Average price paid per share | Number of ordinary shares | Average price paid per share | |||||||||||||
| pence |
| € | |||||||||||||
January 2017 | 1,931,400 | 14.44 | 1,722,948 | 15.68 | ||||||||||||
February 2017 | 2,156,578 | 14.70 | 1,920,433 | 16.24 | ||||||||||||
March 2017 | 3,831,223 | 15.46 | 3,411,166 | 16.87 | ||||||||||||
April 2017 | 2,722,170 | 15.84 | 3,048,709 | 17.63 | ||||||||||||
May 2017 | 3,155,447 | 16.18 | 2,949,483 | 18.12 | ||||||||||||
June 2017 | 3,035,970 | 16.99 | 2,703,112 | 18.54 | ||||||||||||
July 2017 | 1,384,579 | 16.49 | 1,232,869 | 17.77 | ||||||||||||
August 2017 | 1,159,385 | 16.80 | 1,032,500 | 17.74 | ||||||||||||
September 2017 | 1,109,524 | 16.66 | 988,150 | 17.81 | ||||||||||||
October 2017 | 1,243,672 | 16.93 | 1,108,400 | 18.45 | ||||||||||||
November 2017 | 1,157,859 | 17.52 | 1,032,024 | 19.27 | ||||||||||||
December 2017 | 234,692 | 17.47 | 208,928 | 19.39 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| 23,122,499 | 16.04 | 21,358,722 | 17.57 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
All shares were2022, the Employee Benefit Trust purchased under programmes publicly announced on December 8, 201661,040 and February 23, 2017. All of these programmes were completed during 2017.
On December 7, 2017 RELX PLC and RELX NV announced anon-discretionary programme to repurchase further ordinary shares up to the value of £100 million in total between January 2, 2018 and February 12, 2018. A further 3.32.2 million RELX PLC shares, respectively, in order to satisfy awards under our equity-based plans as described in “Item 6: Directors, Senior Management and 2.9 million RELX NV shares have been repurchased as at February 14, 2018, under this programme. Employees — Share Ownership”.
| | | | | | | | | |
|
| |
| |
| |
| Approximate | |
| | | | | | | | maximum | |
| | | | | | Total shares | | value | |
| | | | | | repurchased | | of shares that | |
| | | | | | under | | may yet be | |
| | Number of | | Average price | | publicly | | purchased | |
| | ordinary | | paid per | | announced | | under the | |
|
| shares |
| share |
| programmes |
| programmes | |
January 2022 |
| — |
| — |
| — |
| £ | — |
February 2022(1)(2) |
| 3,771,804 |
| 2,177p |
| 1,591,531 |
| £ | 464 million |
March 2022(2) |
| 3,259,811 |
| 2,273p |
| 3,259,811 |
| £ | 390 million |
April 2022(2) |
| 3,632,126 |
| 2,421p |
| 3,632,126 |
| £ | 302 million |
May 2022(2) |
| 2,459,420 |
| 2,313p |
| 2,459,420 |
| £ | 245 million |
June 2022(2) |
| 2,085,544 |
| 2,166p |
| 2,085,544 |
| £ | 200 million |
July 2022(2) |
| 2,327,496 |
| 2,296p |
| 2,327,496 |
| £ | 147 million |
August 2022(2) |
| 1,549,926 |
| 2,400p |
| 1,549,926 |
| £ | 109 million |
September 2022(2) |
| 1,622,443 |
| 2,245p |
| 1,622,443 |
| £ | 73 million |
October 2022(2) |
| 1,523,753 |
| 2,313p |
| 1,523,753 |
| £ | 39 million |
November 2022(2) |
| 1,356,853 |
| 2,349p |
| 1,356,853 |
| £ | 7 million |
December 2022(1)(2)(3) |
| 303,488 |
| 2,292p |
| 303,485 |
| £ | 150 million |
|
| 23,892,664 |
|
|
| 21,712,388 |
| |
|
| (1) | Includes shares purchased to satisfy awards under our equity-based plans as described in “Item 6: Directors, Senior Management and Employees — Share Ownership”. |
| (2) | Includes amounts purchased under the £500 million ($620 million) non-discretionary buyback programme announced February 10, 2022. This non-discretionary buyback programme was completed on December 7, 2022. |
| (3) | On December 9, 2022 RELX announced a non-discretionary buyback programme to repurchase further ordinary shares up to the value of £150 million ($186 million) in total between January 3, 2023 and February 13, 2023. A further 6.3 million RELX PLC shares have been purchased as at February 15, 2023, under this programme. |
On February 15, 2018,16, 2023 RELX PLC and RELX NV announced theirits intention to repurchase further ordinary shares up to the value of £600£650 million in aggregate($806 million) over the remainder of 2018.2023.
In addition, during 2017 the Employee Benefit Trust purchased 1.2 million RELX PLC shares and 1.3 million RELX NV shares.
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ITEM 16G: CORPORATE GOVERNANCE
Details of our corporate governance practices are set out on pages 57 to 60page 51 of Item“Item 15: Controls and Procedures.Procedures”.
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Compliance with New York Stock Exchange Corporate Governance Rules
RELX PLC, and RELX NV, as companiesa company listed on the New York Stock Exchange (the “NYSE”), areis subject to the listing requirements of the NYSE and the rules of the US Securities and Exchange Commission (the “SEC”).SEC. We also continually monitor our compliance with the provisions of the Sarbanes-Oxley Act of 2002 that are applicable to foreign private issuers.
As a foreign private issuers,issuer, RELX PLC and RELX NV areis only required to comply with certain of the NYSE corporate governance rules and areis in compliance with all applicable rules. The NYSE’s rules also require disclosure of any significant ways in which their corporate governance practices differ from those required of US companies under the NYSE listing standards.
We follow UK corporate governance practice, which does not differ significantly from the NYSE corporate governance standards for foreign private issuers. We also follow Dutch corporate governance practice. We believe that our corporate governance practices do not differ in any significant way from those required to be followed by US companies under the NYSE corporate governance listing standards.
The NYSE listing standards provide that US companies must have a nominating/corporate governance committee composed entirely of independent directors and with a written charter that addresses the committee’s purpose and responsibilities which, at a minimum, must be to identify individuals qualified to become board members, develop and recommend to the Board a set of corporate governance principles and to oversee the evaluation of the board and management.
RELX PLC and RELX NV havehas a joint Nominations Committee and a joint Corporate Governance Committee. The written terms of reference adopted by the RELX PLC and the RELX NV BoardsBoard for these committees specify purposes and responsibilities that correspond to those of a US company’s nominating/corporate governance committee under the NYSE’s listing standards. The Nominations Committee and the Corporate Governance Committee are composed entirely ofNon-Executive Directors.
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55
PART III
The Registrants haveRegistrant has responded to Item 18“Item 18: Financial Statements” in lieu of responding to this Item.
The information set forth under the heading ‘Consolidated Financial Statements’ and ‘Notes to the consolidated financial statements’ on pages 117162 to 164204 of the Group’sRELX Annual ReportsReport and Financial Statements 20172022 is incorporated herein by reference to Exhibit 15.2.
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the MembersShareholders and Board of Directors of RELX PLC and the Shareholders and the Board of Directors of RELX NV
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of the Group (comprising RELX PLC RELX NV, RELX Group plc and its subsidiaries, joint ventures and associates)(the ‘Group’) as of December 31, 20172021 and 2016, and2022, the related consolidated statements of income statement, comprehensive income, cash flows, and changes in equity for each of the twothree years in the period ended December 31, 2017,2022, and the related notes (collectively referred to as the “financial“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group at December 31, 20172021 and 2016,2022, and the consolidated results of its operations and its cash flows for each of the twothree years in the period ended December 31, 2017,2022, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sGroup's internal control over financial reporting as of December 31, 2017,2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 14, 201815, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Group’sGroup's management. Our responsibility is to express an opinion on the Group’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Uncertain tax positions
Description of the Matter
As described in Note 9 to the consolidated financial statements, 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 determining 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.
F-2
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, the Group has recognised a number of provisions against uncertain tax positions, the valuation of which requires significant estimation uncertainty, as described in Note 9. These provisions totaled £239m as at December 31, 2022 (2021: £228m). We focused on this area due to the complexity in auditing, due to their subjectivity, the quantification of the provision and the judgement around the trigger for recognition or release impacting the provision and the effective tax rate.
How We Addressed the Matter in Our Audit
Our procedures included obtaining an understanding of the tax provisioning processes and evaluating the design of, as well as testing the operating effectiveness 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 with support from professionals with specialized skills. Procedures included: (i) meeting with members of management responsible for tax to understand the Group’s 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 and obtaining an understanding of all matters considered by management 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.
/s/ Ernst & Young LLP | | |
We have served as the Group’s auditor since 2016. | | |
London, United Kingdom
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and members of RELX PLC and to the Board of Directors and shareholders of RELX NV:
We have audited the accompanying consolidated income statement and consolidated statements of comprehensive income, cash flows, and changes in equity of the Group (comprising RELX PLC, RELX NV, RELX Group plc and its subsidiaries, associates and joint ventures) for the year ended December 31, 2015. These consolidated financial statements are the responsibility of the management of the Group. Our responsibility is to express an opinion on the consolidated financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such 2015 consolidated financial statements present fairly, in all material respects, the consolidated results of the Group’s operations and cash flows for the year ended December 31, 2015, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
February | |
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THIS PAGE INTENTIONALLY BLANK
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Terms used in this Annual Report on Form20-F | US equivalent or brief description |
Accruals | | Accrued expenses |
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Adjusted earnings per share | | Adjusted net profit attributable to |
Adjusted net profit attributable to | | Net profit attributable to RELX PLC |
Adjusted operating margin | | Calculated as adjusted operating profit |
Adjusted operating profit | | Operating profit before amortisation of acquired intangible assets, |
Allotted | | Issued |
Associate | | An entity in which the Group has a participating interest and, in the opinion of the directors, can exercise significant influence on its |
| | Issued share capital |
Capital and reserves | | Shareholders’ equity |
Cash flow conversion | | The proportion of adjusted operating profits converted into cash |
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Constant currency | | Calculated using the previous financial year’s full-year average and hedge exchange |
|
EPS | | Earnings per ordinary share |
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Invested capital | | Net capital employed, |
Investments | | Non-current investments |
Freehold | | Ownership with absolute rights in perpetuity |
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Interest receivable | |
Interest |
Net | | Gross |
Net cash acquired | | Cash less debt acquired with a business |
Operating costs | | Cost of sales plus selling and distribution costs plus administration and other expenses |
Portfolio changes/effects | | Changes in the portfolio relating to acquisitions, disposals and assets held for sale |
Prepayments | | Prepaid expenses |
Profit | | Income |
Profit attributable | | Net income |
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Share based remuneration | | Stock-based compensation |
Share premium | | Premiums paid in excess of par value of ordinary shares |
Return on invested capital | | Post tax adjusted operating profit expressed as a percentage of average capital employed. This is a key financial measure used by management that demonstrates the efficiency of the use of capital. |
Revenue | | Sales |
Underlying growth | | Underlying growth rates are calculated at constant currencies, |
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Exhibits filed as part of this annual report,Annual Report on Form 20-F, or incorporated by reference
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13.1 | | |
13.2 | | |
15.1 | | |
| Independent Registered Public Accounting Firm’s Consent – Ernst & Young LLP | ||
15.2* | | |
15.3 | | |
17.1 | | |
101.1 | | The following financial information for RELX |
104 | | Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101). |
The total amount of long termlong-term debt securities of the Group authorised under any single instrument does not exceed 10% of the total assets of the Group. The RegistrantsRegistrant hereby agreeagrees to furnish to the Commission,SEC, upon its request, a copy of any instrument defining the rights of holders of long termlong-term debt of the Group or any of the businesses for which consolidated or unconsolidated financial statements are required to be filed.
The agreements and other documents filed as exhibits to this reportAnnual Report on Form 20-F are not intended to provide factual information or other disclosure other than the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representation and warranties made by any of the registrantsregistrant in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs at the date they were made or at any other time.
* | Certain of the information included within Exhibit 15.2 |
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SIGNATURES
SIGNATURES
Each of the RegistrantsThe Registrant hereby certifies that it meets all of the requirements for filing on Form20-F and that it has duly caused and authorised the undersigned to sign this annual report on its behalf.
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RELX PLC | | |
Registrant |
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By: /s/ E ENGSTROM | | |
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E Engstrom | | |
Chief Executive Officer |
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By: /s/ N LUFF | | |
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N Luff | | |
Chief Financial Officer |
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Dated: February | |
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