RELX(RELX) - 2025 Q2 - Quarterly Report

H1 2025 Performance Highlights and Outlook RELX achieved strong H1 2025 growth across all segments, driven by analytics and AI, and maintains a positive full-year outlook Financial Highlights RELX reported strong H1 2025 growth with underlying revenue up 7% to £4,741 million and adjusted operating profit up 9% to £1,652 million, alongside a 7% interim dividend increase H1 2025 Key Financial Metrics | Metric | H1 2025 | H1 2024 | Change | Underlying/Constant Currency Growth | | :--- | :--- | :--- | :--- | :--- | | Revenue (£m) | 4,741 | 4,641 | +2% | +7% (Underlying) | | Adjusted Operating Profit (£m) | 1,652 | 1,583 | +4% | +9% (Underlying) | | Adjusted EPS (p) | 63.5 | 59.5 | +7% | +10% (Constant Currency) | | Reported Operating Profit (£m) | 1,490 | 1,431 | +4% | N/A | | Reported EPS (p) | 52.9 | 52.6 | +1% | N/A | | Interim Dividend (p) | 19.5 | 18.2 | +7% | N/A | - The company completed three acquisitions for a total of £262 million and executed £1,000 million of its £1,500 million share buyback program[5] - Net debt to EBITDA ratio stood at 2.2x, with adjusted cash flow conversion at 100%[5][8] Full Year 2025 Outlook The company reaffirms its positive full-year outlook, expecting continued strong underlying growth in revenue, adjusted operating profit, and adjusted EPS - RELX expects another year of strong underlying growth in revenue and adjusted operating profit[3] - The company anticipates strong growth in adjusted earnings per share on a constant currency basis for the full year[3] CEO Commentary CEO Erik Engstrom noted H1 2025 growth with a higher quality profile across all segments, driven by a strategic shift to analytics and AI - The CEO noted a higher quality growth profile in H1 2025, with strong performance across all four business areas[4] - The long-term growth trajectory is driven by the shift towards higher-growth analytics and decision tools[4] - Artificial intelligence, combined with leading content and data, is a key driver of customer value and future growth[4] Operating and Financial Review This section details RELX's H1 2025 financial performance, including profitability, cash flow, debt, dividends, and corporate responsibility Group Financial Summary RELX achieved 7% underlying revenue growth to £4,741 million and 9% underlying adjusted operating profit growth to £1,652 million in H1 2025, improving margins and adjusted EPS H1 2025 Financial Performance (Adjusted) | Metric | 2025 | 2024 | Underlying Growth | | :--- | :--- | :--- | :--- | | Revenue (£m) | 4,741 | 4,641 | +7% | | Adjusted Operating Profit (£m) | 1,652 | 1,583 | +9% | | Adjusted Operating Margin (%) | 34.8 | 34.1 | +70 bps | | Adjusted EPS (p) | 63.5 | 59.5 | +10% (Constant Currency) | H1 2025 Financial Performance (Reported) | Metric | 2025 | 2024 | Change in GBP | | :--- | :--- | :--- | :--- | | Revenue (£m) | 4,741 | 4,641 | +2% | | Operating Profit (£m) | 1,490 | 1,431 | +4% | | Profit Before Tax (£m) | 1,283 | 1,295 | -1% | | Net Profit (£m) | 976 | 985 | -1% | | EPS (p) | 52.9 | 52.6 | +1% | Profitability Analysis The group's adjusted operating margin improved by 70 basis points to 34.8%, with a lower adjusted effective tax rate and increased adjusted net profit - The overall adjusted operating margin improved by 70 basis points to 34.8%, and the EBITDA margin improved by 50 basis points to 40.2%[38] - The adjusted effective tax rate was 22.5%, down from 23.0% in H1 2024[40] - Adjusted net profit attributable to shareholders increased by 5% to £1,171 million[43] Cash Flow Analysis Adjusted cash flow increased 10% to £1,652 million with 100% conversion, while capital expenditure rose to £255 million, leading to higher free cash flow Cash Flow Conversion | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Adjusted Operating Profit (£m) | 1,652 | 1,583 | | Adjusted Cash Flow (£m) | 1,652 | 1,498 | | Adjusted Cash Flow Conversion (%) | 100 | 95 | - Capital expenditure was £255 million, representing 5.4% of revenue, driven by investment in new products[47] - Free cash flow before dividends was £1,146 million, up from £1,007 million in the prior year[48] Debt and Liquidity Net debt rose to £7,443 million with a 2.2x net debt to EBITDA ratio, while the company maintained strong liquidity with new debt issuance and an undrawn facility - Net debt stood at £7,443 million as of June 30, 2025, an increase of £880 million from December 31, 2024[52] - The ratio of net debt (including pensions) to EBITDA for the twelve months to June 30, 2025 was 2.2x[55] - In March 2025, the Group issued $1.5 billion in new term debt and has access to an undrawn $3 billion committed bank facility maturing in 2027[57] Dividends and Share Repurchases The Board declared a 7% interim dividend increase to 19.5 pence per share and repurchased £1,000 million of shares in H1 2025 - An interim dividend of 19.5 pence per share was declared, an increase of 7% over the prior year[60] - In H1 2025, 25.5 million shares were repurchased for a total consideration of £1,000 million[61] Corporate Responsibility RELX maintained its AAA MSCI ESG rating and top Sustainalytics ranking, focusing on UN SDGs, AI principles, and environmental targets - RELX has maintained a AAA MSCI ESG rating for ten consecutive years and is ranked first in its sector by Sustainalytics[9][63] - 2025 objectives include updating Responsible AI Principles, implementing new environmental targets, and enhancing supplier code of conduct compliance[64] Business Area Analysis This section provides a detailed review of the performance and strategic drivers for each of RELX's four core business segments Risk The Risk segment achieved strong 8% underlying revenue growth to £1,748 million and 9% underlying adjusted operating profit growth, driven by financial crime and fraud solutions Risk Segment H1 2025 Performance | Metric | H1 2025 | H1 2024 (Restated) | Underlying Growth | | :--- | :--- | :--- | :--- | | Revenue (£m) | 1,748 | 1,667 | +8% | | Adjusted Operating Profit (£m) | 660 | 621 | +9% | | Adjusted Operating Margin (%) | 37.8 | 37.3 | +50 bps | - Growth drivers include Financial Crime Compliance, digital Fraud & Identity solutions, and strong new sales[15] - The full-year outlook is for continued strong underlying revenue growth, with underlying adjusted operating profit growth slightly exceeding revenue growth[16] Scientific, Technical & Medical The STM segment reported good growth with 5% underlying revenue and 7% underlying adjusted operating profit increases, driven by higher-value analytics and tools STM Segment H1 2025 Performance | Metric | H1 2025 | H1 2024 (Restated) | Underlying Growth | | :--- | :--- | :--- | :--- | | Revenue (£m) | 1,323 | 1,282 | +5% | | Adjusted Operating Profit (£m) | 491 | 472 | +7% | | Adjusted Operating Margin (%) | 37.1 | 36.8 | +30 bps | - Growth is driven by the evolution towards higher value-add analytics and decision tools. Generative AI capability is being extended across the majority of the revenue base[18][19] - The full-year outlook is for continued good underlying revenue growth, with underlying adjusted operating profit growth slightly exceeding revenue growth[20] Legal The Legal segment saw accelerated growth with 9% underlying revenue and 11% underlying adjusted operating profit increases, fueled by Lexis+ AI and legal analytics Legal Segment H1 2025 Performance | Metric | H1 2025 | H1 2024 (Restated) | Underlying Growth | | :--- | :--- | :--- | :--- | | Revenue (£m) | 900 | 852 | +9% | | Adjusted Operating Profit (£m) | 188 | 175 | +11% | | Adjusted Operating Margin (%) | 20.9 | 20.5 | +40 bps | - Growth was driven by the shift to higher-growth legal analytics, with the Lexis+ AI platform continuing its successful trajectory[22][23] - The full-year outlook is for continued strong underlying revenue growth, with underlying adjusted operating profit growth exceeding revenue growth[24] Exhibitions The Exhibitions segment achieved strong 8% underlying revenue growth, surpassing pre-pandemic levels, with a 9% increase in underlying adjusted operating profit and improved margins Exhibitions Segment H1 2025 Performance | Metric | H1 2025 | H1 2024 | Underlying Growth | | :--- | :--- | :--- | :--- | | Revenue (£m) | 581 | 601 | +8% | | Adjusted Operating Profit (£m) | 234 | 223 | +9% | | Adjusted Operating Margin (%) | 40.3 | 37.1 | +320 bps | - Underlying revenue growth of +8% reflects an improved growth profile, now established above pre-pandemic levels. Reported revenue was impacted by disposals and event cycling[26] - The full-year outlook is for continued strong underlying revenue growth with an improvement in adjusted operating margin over the prior full year[28] Business Area Reporting Changes RELX now reports print activities separately and moved a healthcare portfolio to Risk, restating prior period comparatives for transparency - Print and print-related activities are now managed and reported separately to improve transparency, as print revenue has declined to 4% of the group total[29][31] - A small commercial healthcare product portfolio was moved from Scientific, Technical & Medical to the Risk segment[31] - Prior period comparatives have been restated to reflect these reporting changes, with details provided on page 24 of the report[32] Principal and Emerging Risks This section outlines RELX's key risks, including technology, data privacy, geopolitical, operational, and corporate challenges Summary of Key Risks RELX identifies principal risks such as data privacy, intellectual property, cybersecurity, geopolitical conditions, customer acceptance, and talent retention - Technology & Data Risks: - Data Privacy: Changes in legislation could impact the ability to collect and use personal data - Intellectual Property: Proprietary rights could be challenged or infringed, including by AI technologies - Cyber Security: Systems face risks of unauthorized access, which could compromise data and disrupt operations - Technology Resilience: Dependence on electronic platforms creates risk from significant failure or interruption[66][67][73] - Market & Operational Risks: - Geopolitical & Economic Conditions: Demand may be impacted by factors like war, sanctions, inflation, and interest rates - Customer Acceptance: Failure to adapt to changing technology and customer demands could adversely affect revenue - Primary Research Publishing: Rapid changes in payment models (e.g., Open Access) could impact the STM business - Face-to-face Events: Exhibitions are susceptible to economic cycles, pandemics, and travel disruptions[68][69][71] - Corporate & Financial Risks: - Acquisitions: Inability to generate anticipated benefits from acquisitions could lead to impairment charges - Talent: Inability to recruit and retain skilled employees, particularly in technology, could affect business performance - Treasury: Results are subject to currency fluctuations, particularly the US dollar, and changes in funding conditions - Ethics: Breaches of ethical standards or laws could damage reputation and financial condition[72][79][81] Condensed Consolidated Financial Information This section presents RELX's H1 2025 condensed financial statements, including income, balance sheet, cash flow, and explanatory notes Financial Statements H1 2025 reported net profit was £979 million on £4,741 million revenue, with total assets of £14,325 million and net cash from operating activities of £1,414 million - Income Statement: Reported net profit for H1 2025 was £979 million, slightly down from £986 million in H1 2024[84] - Statement of Financial Position: As of June 30, 2025, total assets were £14,325 million and total equity was £2,194 million[91] - Cash Flow Statement: Net cash from operating activities was £1,414 million for H1 2025, compared to £1,259 million in H1 2024[89] Notes to the Financial Statements Notes detail the basis of preparation, segment analysis, EPS, dividends, net debt, and pensions, with an effective tax rate of 23.7% - Basis of Preparation: The financial information is prepared in accordance with UK adopted IAS 34 and is unaudited but has been reviewed. Comparatives have been restated for business area reporting changes[94][95] - Segment Analysis: Revenue is primarily generated from North America (£2,837 million), followed by Europe (£956 million) and the Rest of the World (£948 million). Subscriptions account for £2,565 million of revenue and transactional for £2,176 million[106][108] - Dividends: An interim dividend of 19.5 pence per share was declared on July 23, 2025, with an expected total cost of £357 million[115] Supplementary Financial Information This section provides reconciliations of Alternative Performance Measures to IFRS and presents summary financials in USD and EUR Alternative Performance Measures (APMs) This section reconciles non-GAAP measures to IFRS, explaining how APMs like 'underlying growth' track core operational performance - Provides detailed reconciliations from reported figures to adjusted figures, such as Operating Profit (£1,490 million) to Adjusted Operating Profit (£1,652 million)[130] - Adjusted EPS for H1 2025 was 63.5 pence, derived from an adjusted net profit of £1,171 million[133] - The definition of 'Underlying Growth' has been refined following the change in segmental reporting to exclude print and print-related revenue[134][135] Summary Financials in USD and EUR The report includes a simple translation of sterling-based financials into US dollars and euros for informational purposes H1 2025 Key Metrics in USD and EUR | Metric | H1 2025 (USDm) | H1 2025 (EURm) | | :--- | :--- | :--- | | Revenue (USDm) | 6,163 | 5,642 | | Adjusted Operating Profit (USDm) | 2,148 | 1,966 | | Adjusted Net Profit (USDm) | 1,522 | 1,393 | - Adjusted earnings per American Depositary Share (ADS) for H1 2025 was $0.826[139] Governance and Investor Information This section covers the independent review report, directors' responsibility statement, and general investor information for RELX Independent Review Report Ernst & Young LLP reviewed the H1 2025 condensed financial statements, finding them prepared in accordance with UK adopted IAS 34 - The auditor's review concluded that the condensed financial statements appear to be prepared in accordance with UK adopted International Accounting Standard 34[147] - The review was conducted in accordance with ISRE 2410 (UK), which is substantially less in scope than a full audit; therefore, no audit opinion is expressed[148] Directors' Responsibility Statement The directors confirm the condensed financial information and interim management report provide a true and fair view of the company's position - The directors affirm the fairness and accuracy of the condensed financial statements and the interim management report[157] Investor Information This section provides general information about RELX's global operations, market capitalization, and key financial calendar dates - RELX is a global provider of information-based analytics, employing over 36,000 people with a market capitalization of approximately £71 billion[160][161] - Key upcoming dates include the interim dividend payment on September 11, 2025, and a Q3 trading update on October 23, 2025[162]