Simon Property(US:SPG)2025-08-13 13:00Financial Data and Key Metrics Changes - The company reported underlying revenue growth of 6% and adjusted operating profit (AOP) increasing by 10% in H1 2025 [5][34] - Free cash flow increased by 51%, totaling more than €200 million in 2025 [6] - Adjusted earnings per share rose to €0.83 from €0.57 in H1 2024 [43] Business Segment Data and Key Metrics Changes - The research segment generated underlying revenue of €727 million, with 7% revenue growth and 8% AOP growth [9] - Health segment reported underlying revenue of €90 million, representing 4% growth, with AOP increasing by 19% to €15 million [13] - Education segment reported underlying revenue of €108 million, with a growth of about 3% [14] Market Data and Key Metrics Changes - The global article market grew by about 6%, while the company's article output increased by about 10% [10] - The full open access market saw 9% growth, with the company outperforming at 25% growth [11] Company Strategy and Development Direction - The company has raised its guidance for the 2025 fiscal year, reflecting positive momentum, particularly in research [7][43] - Investments in AI and technology are aimed at transforming the research ecosystem, with over 90 AI applications in use [17][24] - The company continues to focus on open access as a core pillar of its research strategy, publishing over 50% of primary research content open access [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, supported by a high share of contracted revenues [45] - The company expects underlying group revenue to be between €1.96 billion and €1.98 billion for 2025, assuming stable economic conditions [44] Other Important Information - The company launched 24 new journals in the first half of the year, including Nature Clean Technology and Nature Biodiversity [11] - The company received a gold rating from EcoVadis for sustainability, placing it in the top 5% of companies [22] Q&A Session Summary Question: What attributed to the 25% growth in full open access published articles? - Management attributed the growth to the quality of the portfolio, increased investment in new journals, and enhanced research integrity initiatives [49][52] Question: Will margin expansion targets change due to current performance? - Management indicated that while current performance is strong, they would focus on 2025 before discussing midterm margin expansion targets [50][56] Question: How is the market environment in the U.S. for the 2026 renewal campaign? - Management noted that the U.S. market remains resilient, with a significant portion of revenues contracted, and they expect a smaller number of renewals in 2026 [60][63] Question: How does the company view potential disruption from AI? - Management believes that AI will positively impact the industry by improving the publication process and reducing friction, rather than being a disruptive force [70][75] Question: What factors drove the significant change in revenue guidance? - Management expects H2 growth to be in line with H1, driven by completed renewals and strong submission volumes [71][76] Question: What is the expected adjusted effective tax rate for the full year? - Management anticipates the tax rate to decrease to around 12% for the full year due to recent changes in German corporate tax legislation [81] Question: At what level of leverage would the company consider share buybacks? - Management stated that share buybacks would be considered once the free float increases and after achieving their deleveraging targets [88][92]