Annual Report and
Financial Statements
2018
Annual Report and Financial Statements 2018
RELX is a global provider of information-based
analytics and decision tools for professional and
business customers.
We help scientists make new discoveries, doctors and
nurses improve the lives of patients and lawyers win
cases. We prevent online fraud and money laundering,
and help insurance companies evaluate and predict risk.
Our events enable customers to learn about markets,
source products and complete transactions.
In short, we enable our customers to make better
decisions, get better results and be more productive.
Forward-looking statements
This Annual Report contains forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US
Securities Exchange Act of 1934, as amended. These statements are subject to risks and uncertainties that could cause actual results or outcomes of RELX PLC
(together with its subsidiaries, “RELX”, “we” or “our”) to differ materially from those expressed in any forward-looking statement. The terms “outlook”, “estimate”,
“project”, “plan”, “intend”, “expect”, “should”, “will”, “believe”, “trends” and similar expressions may indicate a forward-looking statement. Important factors that
could cause actual results or outcomes to differ materially from estimates or forecasts contained in the forward-looking statements include, among others, current
and future economic, political and market forces; changes in law and legal interpretations affecting RELX intellectual property rights and internet communications;
regulatory and other changes regarding the collection, transfer or use of third-party content and data; demand for RELX products and services; competitive factors in
the industries in which RELX operates; ability to realise the future anticipated benefits of acquisitions; significant failure or interruption of our systems; compromises
of our data security systems or other unauthorised access to our databases; legislative, fiscal, tax and regulatory developments and political risks; exchange rate
fluctuations; and other risks referenced from time to time in the filings of RELX PLC with the US Securities and Exchange Commission.
Overview Business review Financial review Governance Financial statements and other information
1RELX Annual report and financial statements 2018
Overview
*
2 2018 Financial highlights
3 Chairman’s statement
4 Chief Executive Officer’s report
Business review
*
8 RELX business overview
14 Scientific, Technical & Medical
20 Risk & Business Analytics
28 Legal
34 Exhibitions
41 Corporate Responsibility
Financial review
*
54 Chief Financial Officer’s report
60 Principal risks
Governance
66 Board Directors
68 RELX Business Leaders
70 Chairman’s introduction to corporate governance
72 Corporate governance review
83 Report of the Nominations Committee
85 Directors’ remuneration report
106 Report of the Audit Committee
108 Directors’ report
Financial statements
and other information
113 Independent auditor’s report
121 Consolidated financial statements
169 RELX PLC annual report and financial statements
174 Summary financial information in euros
175 Summary financial information in US dollars
176 Reconciliation of adjusted to GAAP measures
177 Shareholder information
IBC 2019 financial calendar
* Comprises the Strategic Report in accordance with The (UK)
Companies Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013.
Contents
Get more information online
A PDF of the full Annual Report and further
information about our businesses can be
found online at our website: www.relx.com
2 RELX Annual report and financial statements 2018 | Overview
2018 Financial highlights
Underlying revenue growth of 4%
Underlying adjusted operating profit growth of 6%
Reported operating profit £1,964m (£1,905m)
Adjusted EPS growth at constant currency up 7%; in sterling up 6% to 84.7p
Reported EPS 71.9p (81.6p)
Full-year dividend up 7% to 42.1p
Strong financial position and cash flow; cash flow conversion at 96%
RELX PLC and its subsidiaries, joint ventures and associates are together known as “RELX”
† 2017 restated for adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16. See note 1 on page 126 for further details.
RELX uses adjusted and underlying figures as additional performance measures. Adjusted figures primarily exclude the amortisation of acquired intangible assets and other
items related to acquisitions and disposals, and the associated deferred tax movements. In 2018 and 2017, we also excluded exceptional tax credits, see note 9 on page 138.
Reconciliations between the reported and adjusted figures are set out on page 176. Underlying growth rates are calculated at constant currencies, excluding the results of
acquisitions until twelve months after purchase, and excluding the results of disposals and assets held for sale. Underlying revenue growth rates also exclude exhibition
cycling. Constant currency growth rates are based on 2017 full-year average and hedge exchange rates.
REVENUE ADJUSTED EARNINGS PER SHARE
£m
DIVIDEND PER SHARE ADJUSTED CASH FLOW CONVERSION
Pence
Pence
7,492
7,341
†
96%96%
†
20182017
84.7
80.2
†
20182017
42.1
39.4
20182017
20182017
ADJUSTED OPERATING PROFIT
RETURN ON INVESTED CAPITAL
£m
2,346
2,284
†
13.2%
12.9%
†
20182017
20182017
RELX
Underlying growth +4% Underlying growth +6%
Growth +7%
Constant currency growth +7%
Overview Business review Financial review Governance Financial statements and other information
3RELX Annual report and financial statements 2018
RELX continued its positive
development in 2018. We simplified
our corporate structure into a
single parent company, removing
complexity and increasing
transparency for shareholders.
Shares in the single parent
company have a full weighting
in the FTSE 100 and AEX indices.
RELX continued to execute its strategy aimed at achieving more
predictable revenues, a higher growth profile and improving
returns. As a result, underlying revenue growth was again 4%.
Underlying adjusted operating profits grew 6%, as we continued
to grow revenues ahead of costs. Adjusted earnings per share
in constant currencies grew 7% and in sterling 6% to 84.7p (80.2p).
Reported earnings per share were 71.9p (81.6p).
Dividends
We are proposing a full year dividend increase of 7% to 42.1p.
The long-term dividend policy is unchanged.
Balance sheet
Net debt, including leases as per IFRS 16, was £6.2bn at 31
December 2018, compared with £5.0bn last year. Net debt/ EBITDA
including pensions and leases was 2.4x, compared with 2.2x in
2017. Capital expenditure represented 5% of revenues.
Share buybacks
In 2018, we deployed £700m on share buybacks. In 2019, we intend
to deploy a total of £600m. By 20 February, £100m of this year’s
total had already been completed, leaving a further £500m to be
deployed during the year.
The Board
We continue to refresh the Board. Ben van der Veer will stand
down from the board after nine years’ service. He was replaced
as Chairman of the Audit Committee, a position he had held since
2010, by Adrian Hennah. Adrian is Chief Financial Officer of Reckitt
Benckiser, and was previously Chief Financial Officer of Smith &
Nephew. Andrew Sukawaty will be appointed as a Non-Executive
Director of RELX, subject to shareholder approval, with effect
after the 2019 Annual General Meeting. Andrew has had a 30 year
career in the telecoms industry. He is Chairman of Inmarsat
and was a Non-Executive Director and the Senior Independent
Director of Sky between 2013 and 2018. I would like to thank Ben
for his advice over many years and am delighted that Andrew will
be joining RELX.
Parent company structure
In September 2018, we completed the simplification of the
company’s corporate structure by moving from a dual to a single
parent structure. In June, shareholders of both parent companies,
RELX PLC and RELX NV, voted 99.9% in favour of the measures
which were cost and profit neutral on an ongoing basis and did
not impact the economic interest of any shareholder. RELX NV
shareholders received one new RELX PLC share in exchange for
each RELX NV share, and can continue to trade their new shares
on Euronext Amsterdam, priced in euros. They are also entitled
to receive dividend payments in euros. RELX NV ADRs were
converted one-for-one to RELX PLC ADRs. Shares in the single
parent company are now listed in London, Amsterdam and New
York, and it was confirmed in December that RELX will have a full
weighting in the AEX index in addition to the FTSE 100.
This latest change was a natural step for RELX, removing
complexity and increasing transparency. In 2015, the company
simplified its structure by combining all assets below the two
parent companies into a single new group entity and eliminated
parent company cross-shareholdings. We also increased share
price transparency by moving all share listings to an equalisation
ratio of one to one.
Corporate responsibility
We take our commitment to human rights seriously as evidenced
by our Modern Slavery Act Statement, which outlines how we
work to avoid slavery and trafficking in our direct employment
and in our supply chain. In the year, we held RELX Rule of Law
Cafés in the US, Europe and Asia to bring together the legal
community, corporate peers, government representatives and
non-governmental organisations to share information on going
beyond legal minimums to advance the rule of law.
We also created Access to Justice Law360, free content to
support the legal community, including legal aid organisations,
in helping citizens gain equal treatment within civil and criminal
justice systems. As a United Nations Global Compact LEAD
company, we joined the action platform, Peace, Justice & Strong
Institutions, ensuring business supports good governance and
legal frameworks.
Another critical priority for RELX is data privacy and security and
in 2018 we expanded security incident response preparedness
through technology, awareness training and simulations.
Anthony Habgood
Chairman
Sir Anthony Habgood
Chairman
Chairman’s statement
4 RELX Annual report and financial statements 2018 | Overview
Erik Engstrom
Chief Executive Officer
Chief Executive Officer’s report
Our number one priority
remains the organic development
of increasingly sophisticated
information-based analytics
and decision tools that deliver
enhanced value to our customers.
Strategic direction
Our number one strategic priority is the organic development
of increasingly sophisticated information-based analytics and
decision tools that deliver enhanced value to professional and
business customers across the industries that we serve.
Our goal is to help our customers make better decisions, get better
results and be more productive. We do this by leveraging a deep
understanding of our customers to create innovative solutions
which combine content and data with analytics and technology in
global platforms. These solutions often account for about 1% of
our customers’ total cost base but can have a significant and
positive impact on the economics of the remaining 99%.
We aim to build leading positions in long-term global growth
markets and leverage our skills, assets and resources across
RELX, both to build solutions for our customers and to pursue
cost efficiencies.
We are systematically migrating all of our information solutions
across RELX towards higher value-add decision tools, adding
broader data sets, embedding more sophisticated analytics and
leveraging more powerful technology, primarily through
organic development.
We are transforming our core business, building out new products
and expanding into higher growth adjacencies and geographies.
We are supplementing this organic development with selective
acquisitions of targeted data sets and analytics, and assets in
high-growth markets that support our organic growth strategies,
and are natural additions to our existing businesses.
By focusing on evolving the fundamentals of our business we
believe that, over time, we are improving our business profile
and the quality of our earnings. This has led to more predictable
revenues through a better asset mix and geographic balance; a
higher growth profile as we expand in higher growth segments,
exit from structurally challenged businesses, and gradually
reduce the drag from print format declines; and improved returns
by focusing on organic development with strong cash generation.
UNDERLYING ADJUSTED OPERATING PROFIT GROWTH
20182014 2016 20 172015
+5%+5%
+6% +6%+6%
UNDERLYING REVENUE GROWTH
20182014 2016 20 172015
+3% +3%
+4% +4%
+4%
Overview Business review Financial review Governance Financial statements and other information
5RELX Annual report and financial statements 2018 | Chief Executive Officer’s report
2018 progress
We achieved another year of good underlying revenue growth
in 2018, and continued to generate underlying adjusted operating
profit growth ahead of underlying revenue growth, and adjusted
earnings per share growth at constant currencies ahead of
underlying profit growth. We also had an active year for
acquisitions, focusing on targeted data sets, analytics and assets
that support our organic growth strategies. The underlying
growth rate reflects good growth in electronic and face-to-face
revenues (90% of the total), and the further development of our
analytics and decision tools.
With a strong balance sheet and an inherently cash-generative
business, the strategic priority order for using our cash is
unchanged. First, to invest in the organic development of our
business to drive underlying revenue growth; second to support
our organic growth strategy with targeted acquisitions; third to
grow dividends predictably, broadly in line with EPS growth; fourth
to maintain our leverage in a comfortable range; and finally use
any remaining cash to buy back shares. As part of this we bought
back shares for £700m in 2018, and announced £600m in buybacks
for 2019.
In 2018 we completed nine acquisitions of content, data analytics
and exhibition assets for a total consideration of £978m, and
disposed of eight assets for a total of £45m. This included the
acquisition of ThreatMetrix, a leader in the global risk-based
authentification sector for £580m. Since the year end we have
agreed to acquire Mack Brooks, a leading organiser of over 30
highly complementary events across key geographies and
industrial verticals.
Financial performance
Our positive financial performance continued throughout 2018,
with underlying revenue and adjusted operating profit growth
across all four business areas. Underlying revenue growth was
4%. Underlying operating profit growth was 6%, and adjusted
earnings per share grew 7% at constant currencies.
Key business trends in Scientific, Technical & Medical
remained positive, with underlying revenue growth in line with
the prior year and underlying profit growth matching underlying
revenue growth.
At Risk & Business Analytics, underlying revenue growth
remained strong, in line with the prior year. Underlying profit
growth matched underlying revenue growth.
In Legal, underlying revenue growth was in line with the prior
year, with continued efficiency gains driving strong underlying
operating profit growth.
Exhibitions achieved strong underlying revenue growth, with
underlying operating profit growth reflecting cycling-in effects.
Corporate responsibility
Business action is crucial to achieving the United Nations
Sustainable Development Goals (SDGs), 17 goals for the world
by 2030. Among the ways RELX is contributing is through the free
SDG Resource Centre, which aggregates essential content from
across the Group to advance the SDGs. In 2018, we produced
original research, available on the Resource Centre, on the state
ADJUSTED EARNINGS PER SHARE GROWTH
Constant currency
20182014 2016 20 172015
+1 0%
+8% +8%
+7%
+7%
ADJUSTED CASH FLOW CONVERSION
20182014 2016 20172015
96%
94%
96%
†
96%
†
96%
RETURN ON INVESTED CAPITAL
20182014 2016 20172015
12.8%
12.7%
13.0%
13.2%
12.9%
†
DIVIDEND PER SHARE
Pence
42.1
39.4
35.95
29.7
26.0
20182017201620152014
† 2017 and 2016 restated for the adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16.
6 RELX Annual report and financial statements 2018 | Overview
of science underpinning SDG 3, good health and well-being,
and also launched the SDG Perspectives Project on the site
showcasing how the SDGs are influencing scholarly debates.
In the year, we used our convening power to bring a wide range
of stakeholders together to inspire collaboration on the SDGs
including one on partnerships in Amsterdam and one on disruptive
technology to advance the goals in Silicon Valley. In 2019, we
will hold an SDG Inspiration Day on sustainable cities in Delhi.
We conducted our triennial Employee Opinion Survey to
understand the views of our people. There was a 90% response
rate, up three percentage points from 2015, with a three
percentage point increase in engagement and a five percentage
point increase in satisfaction; 85% of employees said we were a
company that supports community involvement. All managers
have received their team’s scores and I will be reviewing progress
on responding to employee feedback. In 2018, we updated our
diversity and inclusion strategy, held our first-ever Diversity
& Inclusion Awareness Month, and advanced our Women in
Technology mentor programme.
Outlook
Key business trends in the early part of 2019 are consistent with
2018, and we are confident that, by continuing to execute on our
strategy, we will deliver another year of underlying growth in
revenue and in adjusted operating profit, together with growth in
adjusted earnings per share on a constant currency basis.
Erik Engstrom
Chief Executive Officer
PrintFace-to-faceElectronic
REVENUE BY FORMAT
20012000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20182017
22%22%
28%
30%
32%
35%
37%
48%
50%
59%
61%
63%
64%
66%66%
70%
74% 74%
14%14%
12%
12%
12%
13%
12%
15%
17%
14%
14%
15%
15%
15%
16%
15%
15%
64%64%
60%
58%
56%
52%
51%
37%
33%
27%
25%
22%
21%
19%
18%
15%
11%
16%
10%
72%
15%
13%
REVENUE BY FORMAT REVENUE BY GEOGRAPHICAL MARKET REVENUE BY TYPE
£7,492m
Electronic
Face-to-face
Print
10%
16%
74%
£7,492m
North America
Europe
Rest of world
21%
24%
55%
£7,492m
Subscriptions
Transactional
Advertising
1%
47%
52%
RELX Annual report and financial statements 2018
In this section
8 RELX business overview
14 Scientific, Technical & Medical
20 Risk & Business Analytics
28 Legal
34 Exhibitions
41 Corporate Responsibility
Business
review
7
Overview Business review Financial review Governance Financial statements and other information
RELX business overview
RELX is a global provider of information-based analytics and decision
tools for professional and business customers.
The Group serves customers in more than 180 countries and has offices in about 40 countries. It employs over 30,000 people, of whom
almost half are in North America.
RELX financial summary
REPORTED FIGURES
2018
£m
2017
†
£m Change
Change at
constant
currencies
Change
underlyingFor the year ended 31 December
Revenue 7,492 7,341 +2% +4% +4%
Operating profit 1,964 1,905 +3%
Profit before tax 1,720 1,721 0%
Net profit attributable to RELX PLC shareholders 1,422 1,648 -14%
Net margin 19.0% 22.4%
Net borrowings 6,177 5,042
Reported earnings per share 71.9p 81.6p -12%
Ordinary dividend per RELX PLC share 42.1p 39.4p +7%
ADJUSTED FIGURES
2018
£m
2017
†
£m Change
Change at
constant
currencies
Change
underlyingFor the year ended 31 December
Operating profit 2,346 2,284 +3% +4% +6%
Operating margin 31.3% 31.1%
Profit before tax 2,145 2,101 +2% +3%
Net profit attributable to RELX PLC shareholders 1,674 1,620 +3% +5%
Net margin 22.3% 22.1%
Cash flow 2,243 2,197 +2%
Cash flow conversion 96% 96%
Return on invested capital 13.2% 12.9%
Adjusted earnings per share 84.7p 80.2p +6% +7%
†
2017 numbers have been restated to reflect the adoption of new accounting standards. See note 1 on page 126 for further details.
The shares of RELX PLC are traded on the London, Amsterdam and New York stock exchanges. RELX PLC and its subsidiaries, joint ventures and associates are together
known as ‘RELX’.
8 RELX Annual report and financial statements 2018 | Business review
RELX Annual report and financial statements 2018 | RELX business overview
Market segments*
Segment position
Scientific, Technical & Medical provides information and analytics that help institutions and
professionals progress science, advance healthcare and improve performance
Global #1
Risk & Business Analytics provides customers with information-based analytics and decision
tools that combine public and industry-specific content with advanced technology and algorithms
to assist them in evaluating and predicting risk and enhancing operational efficiency
Key verticals #1
Legal provides legal, regulatory and business information and analytics that helps customers
increase their productivity, improve decision-making and achieve better outcomes
US #2
Outside US #1 or 2
Exhibitions is a leading global events business. It combines face-to-face with data and digital tools
to help customers learn about markets, source products and complete transactions at over 500
events in almost 30 countries, attracting more than 7m participants
Global #2
* For additional information regarding revenue from our business activities and geographical markets, see market segments section starting on page 13.
Financial summary by market segment
Revenue Adjusted operating profit
2018
£m
Change
underlying
2018
£m
Change
underlying
Scientific, Technical & Medical 2,538 +2% 942 +2%
Risk & Business Analytics 2,117 +8% 776 +8%
Legal 1,618 +2% 320 +10%
Exhibitions 1,219 +6% 313 +10%
Unallocated items (5)
7,492 +4% 2,346 +6%
RELX uses adjusted and underlying figures as additional performance measures. Adjusted figures primarily exclude the amortisation of acquired intangible assets and
other items related to acquisitions and disposals, and the associated deferred tax movements. In 2018 and 2017, we also excluded exceptional tax credits, see note 9 on page 138.
Reconciliations between the reported and adjusted figures are set out on page 176. Underlying growth rates are calculated at constant currencies, excluding the results of
acquisitions until twelve months after purchase, and excluding the results of disposals and assets held for sale. Underlying revenue growth rates also exclude exhibition cycling.
Constant currency growth rates are based on 2017 full-year average and hedge exchange rates.
REVENUE
£7,492m
Scientific,
Technical
& Medical
Risk &
Business
Analytics
Legal
Exhibitions
16%
22%
28%
34%
ADJUSTED OPERATING PROFIT
£2,346m
Scientific,
Technical
& Medical
Risk &
Business
Analytics
Legal
Exhibitions
13%
14%
33%
40%
9
Overview Business review Financial review Governance Financial statements and other information
Harnessing technology
across RELX
Around 8,000 technologists, half
of whom are software engineers,
work at RELX. Annually, the
company spends $1.4bn on
technology. The combination of
our rich data assets, technology
infrastructure and knowledge
of how to use next generation
technologies, such as machine
learning and natural language
processing, allows us to create
effective solutions for our customers.
Helping research chemists with
Elsevier’s Reaxys
Reaxys enables the shortest path to chemistry
research answers, supporting the early stages of
drug development in the pharmaceutical industry,
exploratory chemistry research in academia,
and product development in industries such
as chemicals and oil & gas.
The amount of chemical information published
each year is increasing exponentially, making it
more and more challenging for research chemists
to quickly find targeted and actionable information
to help support their research.
To help researchers stay on top of their field,
Elsevier developed a new chemistry text mining
engine, using state-of-the-art natural language
processing that identified 4.9m key substances in
5.2m documents from more than 15,000 journal
titles in 2018.
This significantly increased the content coverage
and substance information searchable on Reaxys,
addressing a key pain point in customer efforts
to find the data they need for drug discovery.
4.9m
key chemical
substances identified
using Elsevier’s
natural language
processing technology
Providing comprehensive and
relevant information as fast as
possible is a critical challenge
for our customers in a highly
competitive environment. Elsevier’s
sophisticated automatic processing
methods have helped make
Reaxys, where this information
is contained, an indispensable tool
for chemical research.
Dr Juergen Swienty-Busch
Director of Product Management,
Chemistry Solutions, Elsevier
10 RELX Annual report and financial statements 2018 | Business review
Lexis Answers is one of several
features within Lexis Advance
that brings the power of artificial
intelligence and machine learning
to our customers – ultimately
improving their research efficiency,
enhancing their legal workflow
and transforming legal research.
Jeff Pfeifer
Vice President of Product Management,
LexisNexis
Making legal research faster and more
intuitive with Lexis Answers
Every year, an immense volume of legal data is
generated, adding to the existing collection of
more than 16m case law legal decisions and 91m
statutes, regulations, constitutions and legislative
documents in the US alone. As the amount of
electronic data increases, legal research, analysis
and discovery has become increasingly challenging
and time-consuming.
Traditional legal database searches require legal
researchers to make their query using precise key
words or phrases. This can often produce multiple
responses which may not give the specific
answer needed.
As part of the Lexis Advance online legal research
tool, LexisNexis developed the Lexis Answers
service which allows users to enter their query in
the form of a natural language question. Using
machine learning, cognitive computing and
advanced natural language processing
technologies, Lexis Answers anticipates a
user’s research path, curating and delivering
relevant answers based on their question type.
The result is faster answers in fewer searches.
44%
time saved per
research query using
Lexis Answers
RELX data centre
11
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | RELX business overview
12 RELX Annual report and financial statements 2018 | Business review
Market
segments
In this section
14 Scientific, Technical & Medical
20 Risk & Business Analytics
28 Legal
34 Exhibitions
RELX Annual report and financial statements 2018 13
Overview Business review Financial review Governance Financial statements and other information
Business overview
Scientific, Technical & Medical provides information and analytics
that help institutions and professionals progress science, advance
healthcare and improve performance.
Elsevier is headquartered in Amsterdam, with further principal
operations in Boston, New York, Philadelphia, St. Louis and
Berkeley in North America, London, Oxford, Frankfurt, Munich,
Madrid and Paris in Europe, Beijing, Chennai, Delhi, Singapore and
Tokyo in Asia Pacific and Rio de Janeiro in South America. It has
7,900 employees and serves customers in around 180 countries.
Revenues for the year ended 31 December 2018 were £2,538m,
compared with £2,473m
†
in 2017 and £2,318m
†
in 2016. In 2018,
44% of revenue came from North America, 24% from Europe
and the remaining 32% from the rest of the world. Subscription
sales generated 74% of revenue, transactional sales 24% and
advertising 2%.
Elsevier serves the needs of scientific, technical and medical
markets by organising the review, editing and dissemination of
primary research, reference and professional education content.
Building on its heritage of high-quality publishing, Elsevier today
applies technology to authoritative information, providing tools
that enable faster and more efficient ways of working, freeing up
users to focus on their goals.
Elsevier’s customers are scientists, academic institutions,
research leaders and administrators, medical researchers,
doctors, nurses, allied health professionals and students,
as well as hospitals, research institutions, health insurers,
managed healthcare organisations, research-intensive
corporations and governments.
Elsevier services fall into four market categories: Primary
Research, Databases & Tools, Reference and Pharma Promotion.
Primary Research, accounts for around half of revenues. Elsevier
serves the global scientific research community, publishing over
470,000 articles in 2018, 60% more than a decade ago. 2018 saw
continued strong growth both in article submissions and usage,
with 1.8m articles submitted and 1bn articles downloaded by
researchers. In 2018, Elsevier published over 34,000 gold open
access articles, a double-digit growth on the previous year,
making it one of the largest open access publishers in the world.
Elsevier’s portfolio of 2,500 journals is managed by more than
20,000 editors and many are the foremost publications in their
field. They include flagship titles such as Cell and The Lancet
family of journals. In 2018, Elsevier’s article output accounted
for 18% of global research output while garnering a 25% share
of citations, demonstrating Elsevier’s commitment to delivering
research quality significantly ahead of the industry average.
In 2018, Elsevier launched 9 new subscription and 45 full open
access journals, including iScience and One Earth from Cell Press
and the Lancet’s Eclinical Medicine.
Research content is distributed and accessed via ScienceDirect,
the world’s largest database dedicated to peer-reviewed primary
scientific and medical research, hosting over 16m pieces of
content as well as 39,000 e-books.
In 2018, Elsevier acquired Aries Systems, a best-in-class
publication solutions provider, used for manuscript submission,
peer review, production tracking and e-commerce of journals,
books and other publications.
Scientific, Technical & Medical
We help researchers make new discoveries,
collaborate with their colleagues and give them
the knowledge they need to findfunding. We help
governments and universities evaluate and
improve their research strategies. We help
doctors and nurses improve the lives of patients,
providing insight to find the right clinical
answers.
We enhance the quality of scientific research
output by organising the review, editing and
dissemination of 18% of the world’s
scientific articles
ScienceDirect, the world’s largest database
dedicated to peer-reviewed primary scientific
and medical research, has 16m monthly
unique visitors
Scopus is a leading abstract and citation
database of research literature, with over 73m
records across 24,000 journals, sourced from
more than 5,000 publishers
SciVal offers insights into the research
performance of over 10,000 research
institutions
ClinicalKey, the flagship clinical reference
platform, is accessed in over 90 countries and
territories, and by over 1,900 institutions in
North America alone
Elsevier journals have at some point featured
articles by 183 of 184 science and economics
Nobel prize winners since 2000
† 2016 and 2017 restated for adoption of new accounting standards
IFRS 9, IFRS 15 and IFRS 16.
14 RELX Annual report and financial statements 2018 | Business review
Premier life sciences journal with the
highest impact factor in biochemistry
and molecular biology
An innovative research management
and social collaboration platform
The world’s largest database dedicated to
peer-reviewed primary scientific and
medical research
Combines leading reference and evidence based
medical content into its fully integrated clinical
insight engine specialised for doctors, nurses,
or pharmacists
CiteScore™ metrics are a set of
comprehensive, transparent, current and
free metrics to help measure the citation
impact of journals
This chemical compound and reaction
synthesis database enables the shortest path
to chemistry research answers, supporting
drug discovery, chemical R&D and education
Ready-to-use tools to analyse the world of
research, and establish, execute and evaluate
the best strategies for research organisations
A leader in scientific publication workflow
solutions used by journals, books and other
publications for manuscript submission, peer
review, production tracking and e-commerce
A leading abstract and citation database of
peer-reviewed literature featuring smart
tools to track, analyse and visualise research
One of the world’s leading medical journals
since 1823
Designed to help improve patient outcomes,
Via Oncology provides clinical pathways
delivering personalised, evidence-based
guidance at the point of care
ClinicalKey is growing well and is accessed in over 90
countries and territories, and by over 1,900 institutions in
North America alone.
In medical education, Elsevier serves students of medicine,
nursing and allied health professions in multiple formats
including electronic books and electronic solutions. For example
Sherpath, an adaptive teaching and learning solution for nursing
and health education, now provides highly focused, personalised
and adaptive learning paths at over 400 institutions, supporting
more than 37,000 enrolments.
For healthcare professionals, Elsevier’s clinical solutions include
Interactive Patient Education and Care Planning. Arezzo, an active
clinical decision support engine integrated with clinical care
systems, matches evidence-based guidelines with patient and
disease information and dynamically evaluates best-practice
treatment options.
In 2018, Elsevier acquired Via Oncology, which provides decision
support and best practices in cancer care management, bringing
additional technology and innovation to Elsevier’s strength in
clinical pathways.
In commercial healthcare, consumer, provider and medical claims
data is used to deliver leading identity, fraud, compliance and
health risk analytics solutions for payers, providers, pharmacies
and life sciences organisations.
In Reference, Elsevier is a global leader in providing authoritative
and current professional reference content to scientific, technical
and medical reference markets. Flagship titles include Gray’s
Anatomy, Nelson’s Pediatrics and Netter’s Atlas of Human
Anatomy. Reference content is delivered in both electronic and
print formats, with print reference now accounting for less than
10% of Elsevier revenues.
In Databases & Tools, Elsevier offers a suite of products for
academic and corporate researchers. Significant products
include Scopus, Reaxys and Knovel. Scopus is the largest abstract
and citation database of peer reviewed literature curated by
independent external academic advisers, with over 73m records
across 24,000 journals, sourced from more than 5,000 publishers.
It allows researchers to track, analyse and visualise the world’s
research output with features such as CiteScore, providing
comprehensive, transparent and current insights into journal
impact. Reaxys enables the shortest path to chemistry research
answers, supporting the early stages of drug development in the
pharmaceutical industry, exploratory chemistry research in
academia, and product development in industries such as
chemicals and oil & gas. Knovel is a decision support tool for
engineers that helps them to select the right materials, a
mission-critical use case in product development across
chemicals, oil & gas and other engineering-focused industries.
Elsevier serves academic and government research
administrators through its Research Intelligence suite of
products. Leveraging bibliometric data from Scopus and other
data types such as patent citations and usage data, SciVal is a
decision tool that helps institutions to establish, execute and
evaluate research strategies. Pure is an enterprise research
management solution that aggregates an organisation’s research
information from numerous sources into a single platform,
enabling research networking and expertise discovery while
reducing the administrative burden for faculty and staff.
Elsevier’s flagship clinical reference platform, ClinicalKey,
provides physicians, nurses and pharmacists with access to
leading Elsevier and third-party reference and evidence-based
medical content, including over 490 clinical overviews that provide
quick clinical answers and summaries; over 4m images and
51,000 medical and surgical videos in a single, fully integrated site.
RELX Annual report and financial statements 2018 | Scientific, Technical & Medical 15
Overview Business review Financial review Governance Financial statements and other information
In reference markets, Elsevier’s priorities are to expand content
coverage and ensure consistent and seamless linking of content
assets across products.
In every market, Elsevier is applying advanced machine learning
(ML) and natural language processing (NLP) techniques to help
researchers, engineers and clinicians perform their work better.
For example, in research, ML and NLP techniques classify scientific
content and organise it thematically, enabling users to get faster
access to relevant results and related scientific topics. In parallel,
advanced information extraction and NLP techniques are applied
to extract the most important information for scientific concepts in
concise summaries. Elsevier also applies advanced ML techniques
that detect trending topics per domain, helping researchers make
more informed decisions about their research. Coupled with the
automated profiling and extraction of funding body information
from scientific articles, this process supports the whole
researcher journey; from planning, to execution and funding.
Similarly, in health, Elsevier is developing clinical decision
support applications utilising cognitive technologies to map
patient and claims data sets, and large image and text content
repositories. These applications embedded in technology
platforms will enhance the delivery of the right content, in the right
care setting, to the right care providers. This will help health
professionals perform their work better, make more accurate
diagnoses, ensure appropriate care delivery, and save more
human lives.
Business model, distribution channels and competition
In Primary Research, science and medical research is principally
disseminated on a paid subscription basis to the research facilities
of academic institutions, governments and corporations and,
in the case of medical and healthcare journals, to individual
practitioners and medical society members.
While researchers may continue to prefer paid subscription as the
primary distribution model, alternative payment models for the
dissemination of research have evolved over the past twenty
years. Elsevier has long invested in all business models to serve
researchers and research institutions. Author pays open access
is one example, with over 1,900 of Elsevier’s journals now offering
the option of funding publication and distribution via a sponsored
article fee. In addition, Elsevier now publishes around 250 gold
open access titles.
Pharma Promotion offers customised commercial marketing
services to pharmaceutical and medical device companies,
building on Elsevier’s trusted global content brands to connect
and engage with doctors, nurses and other healthcare
professionals who are influential decision makers.
Market opportunities
Scientific, technical and medical information markets have good
long-term growth characteristics. The importance of research
and development to economic performance and competitive
positioning is well understood by governments, academic
institutions and corporations. This is reflected in the long-term
growth in research and development spending and in the number
of researchers worldwide. Growth in health markets is driven
by ageing populations in developed markets, rising prosperity
in developing markets and the increasing focus on improving
medical outcomes and efficiency. Given that a significant
proportion of scientific research and healthcare is funded
directly or indirectly by governments, spending is influenced by
governmental budgetary considerations. The commitment to
research and health provision does, however, remain high,
even in more difficult budgetary environments.
Strategic priorities
Elsevier’s strategic priorities are to: continue to increase
content volume and quality; expand content coverage, building
out integrated solutions and decision tools combining Elsevier,
third-party and customer data; increase content utility, using
‘Smart Content’ to enable new e-solutions; combine content
with analytics and technology, focused on measurably improved
productivity and outcomes for customers; and continue to drive
operational efficiency and effectiveness.
In the primary research market, Elsevier aims to deliver journal
and article quality above the industry average at below average
cost, leveraging the scale of its platform. We work directly with our
customers to understand their objectives and help them reach
their research goals in a way that is satisfactory from a content,
service and economic perspective. Elsevier looks to enhance
quality by building on our premium brands and grow article
volume through new journal launches, the expansion of open
access journals and growth from emerging markets; and add
value to core platforms by implementing new capabilities such
as advanced recommendations on ScienceDirect and social
collaboration through reference manager and collaboration
tool Mendeley.
Electronic
83%
Print 17%
£2,538m
REVENUE BY FORMAT
Rest of
world
32%
Europe 24%
North
America
44
%
£2,538m
REVENUE BY GEOGRAPHICAL MARKET
Advertising
2%
Transactional
24%
Subscription
74%
£2,538m
REVENUE BY TYPE
16 RELX Annual report and financial statements 2018 | Business review
For well over a decade, content has been provided free or at very
low cost in more than 100 countries and territories in the developing
world through Research4Life, a United Nations partnership
initiative. For some journals, advertising and promotional income
represents a small proportion of revenues, predominantly from
pharmaceutical companies in healthcare titles.
Next to journals, Elsevier has also invested in other solutions
to serve the needs of the research community. SSRN is an open
access online preprint community where researchers post
early-stage research, prior to publication in academic journals.
Mendeley data enables researchers to make their research data
publicly available by providing an open research data repository,
while bepress helps academic libraries showcase and share
their institutions’ research via institutional repositories for
greatest impact.
Electronic products, such as ScienceDirect, Scopus and ClinicalKey,
are generally sold direct to customers through a dedicated sales
force that has offices around the world. Subscription agents
sometimes facilitate the sales and administrative process for
remaining print sales. Reference and educational content is sold
directly to institutions and individuals and accessed on Elsevier
platforms. Sometimes it is still sold in printed book form through
retailers, wholesalers or directly to end users.
Competition within science and medical reference content is
generally on a title-by-title and product-by-product basis and
is typically with learned societies and professional information
providers, such as Springer Nature, Clarivate Analytics and
Wolters Kluwer. Decision tools face similar competition, as well
as from software companies and internal solutions developed
by customers.
Key business trends remained positive in 2018, with underlying
revenue growth in line with the prior year, and underlying
profit growth matching revenue growth.
Underlying revenue growth was +2%. The difference between
the constant currency and underlying growth rates reflects the
impact of portfolio changes and the transfer of a small number of
healthcare products from Risk & Business Analytics.
Underlying adjusted operating profit growth was +2% with
underlying cost growth marginally below underlying revenue
growth. The reported margin increased by 0.1 percentage points,
with currency impacts largely offset by portfolio effects.
Electronic revenues saw continued good growth. 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. Databases & tools continued to drive growth
across market segments through enhanced functionality
and content development.
Print book sales, which represent around 10% of divisional
revenues, reverted to historical levels of decline for the main
selling season, with return rates also at historical levels. Print
pharma promotion revenues, which represent less than 5%
of the divisional total, saw a slightly steeper decline than in
recent years.
In 2018 we made three small acquisitions in support of our
organic growth strategy, Via Oncology, Aries Systems and
Science-Metrix, and disposed of a minor pharma business
in Japan.
2019 outlook
Our customer environment remains largely unchanged, and
we expect another year of modest underlying revenue growth,
with underlying operating profit growth exceeding underlying
revenue growth.
2018 financial performance
2018
£m
2017
†
£m
Underlying
growth
Portfolio
changes
Currency
effects
Total
growth
Revenue 2,538 2,473 +2% +2% -1% +3%
Adjusted operating profit 942 914 +2% 0% +1% +3%
† 2017 restated for adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16.
REVENUE
2018
2,538
2,473
†
Underlying growth +2%
2017
£m
ADJUSTED OPERATING PROFIT
2018
942
914
†
Underlying growth +2%
2017
£m
RELX Annual report and financial statements 2018 | Scientific, Technical & Medical 17
Overview Business review Financial review Governance Financial statements and other information
Via Oncology
helping The Center for
Cancer and Blood Disorders
improve patient treatment
The Center for Cancer and Blood Disorders
in Fort Worth, Texas, treats more than 6,000
new cancer patients annually. That equates
to more than 300,000 patient visits every
year. It has over 25 specialist oncologists and
150 healthcare professionals across nine
locations throughout North Texas.
25%
clinical trials
participation rate for
lung cancer patients
as a result of using
Via Pathways, more
than five times
higher than the
national average
Elsevier’s Via Oncology partnered with The Center
over ten years ago after oncologists at the clinic
identified a need to ensure that patients experience
consistent, standardised treatment across their
many locations and oncologists.
Via Oncology’s sophisticated online clinical pathway
system, Via Pathways, is an advanced clinical
decision support system that provides points of
care recommendations for diagnostics and
treatment. By using Via Pathways, oncologists
can follow evidence-based care maps based upon
the most current medical evidence and reduce
unwarranted care variability.
Oncologists also are presented with all locally
available clinical trials prior to starting a
treatment pathway for new patients, ensuring
they are presented with all options for treatment.
Since implementing Via Pathways, The Center’s
oncologists can review more data on their
patients’ outcomes, demonstrating that the care
they deliver is consistent across their network.
For example, The Center’s capture rate, which
measures how consistently doctors use Via
Pathways and tracks all patient visits, has
reached 89% across 34 disease pathways
representing over 95% of cancer types.
The Center considers Via Oncology to be at the
crux of its value-based care initiatives, enabling
participation in studies of new care models.
18 RELX Annual report and financial statements 2018 | Business review
Via Pathways is a great tool that we
can use to standardize our therapies.
We can show that physicians are being
congruent with standards of care and
are taking into account the effectiveness,
toxicity and cost, and making appropriate
treatment choices. That means we’re
providing the highest standard of care
to our patients.
Dr Ray Page, DO, PhD
President of The Center for Cancer
and Blood Disorders, Texas
About Via Oncology
Part of Elsevier, Via Oncology is a
Pittsburgh, Pennsylvania-based
business that provides decision
support and best practices in cancer
care management.
It helps cancer centres demonstrate the
value of their care to patients, doctors and
payers by developing and implementing
clinical pathways in collaboration with its
network of more than 1,500 US cancer care
providers. Via Oncology’s evidence-based
proprietary content, Via Pathways, is
developed by leading oncologists and
forms the basis of clinical algorithms
covering 95% of cancer types treated
in the US. This content is deployed to
doctors and their staff at the point of care
through the Via Portal, a patient-specific
decision support tool that is integrated
with electronic medical records and
provides seamless measurements of
adherence to treatment.
Oncology doctor and nurse
at The Center for Cancer
and Blood Disorders
19
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Scientific, Technical & Medical
Business overview
Risk & Business Analytics provides customers with information-
based analytics and decision tools that combine public and
industry-specific content with advanced technology and
algorithms to assist them in evaluating and predicting risk and
enhancing operational efficiency.
Risk & Business Analytics, headquartered in Alpharetta, Georgia,
has principal operations in California, Florida, Illinois and Ohio
in North America as well as London in Europe and Beijing in Asia
Pacific. It has about 8,700 employees and serves customers in
more than 170 countries.
Revenues for the year ended 31 December 2018 were £2,117m,
compared with £2,073m
†
in 2017 and £1,905m
†
in 2016. In 2018, 79%
of revenue came from North America, 15% from Europe and the
remaining 6% from the rest of the world. Subscription sales
generated 36% of revenues, transactional sales 63% and
advertising 1%.
Risk & Business Analytics comprises the following market-facing
industry/sector groups: Insurance Solutions, Business Services,
Data Services (including banking, energy and chemicals, aviation,
agriculture and human resources) and Government Solutions.
Insurance Solutions, the largest segment, provides
comprehensive data, analytics and decision tools for personal,
commercial and life insurance carriers in the US to improve
critical aspects of their business. Information solutions, including
the most comprehensive US personal loss history database,
C.L.U.E., help insurers assess risks and provide important inputs
to pricing and underwriting insurance policies. Additional key
products include LexisNexis Data Prefill, which provides
information on customers directly into the insurance work stream
and LexisNexis Current Carrier, which identifies insurance
coverage details and any lapses in coverage.
The focus is on delivering innovative decision tools through
a single point of access within an insurer’s infrastructure.
LexisNexis Active Insights, our solution for active risk
management, connects proprietary linking algorithms with vast
amounts of data to proactively inform insurers of key events
impacting their policyholders. Insurance Solutions is advancing
its strategy to drive more consistency and efficiency in claims
through its solution suite, Claims Compass, with Claims Datafill
providing data and decisions at first notice of loss and throughout
the claim life cycle. Risk Classifier solution, which uses public and
motor vehicle records and predictive modelling, is used by around
a quarter of the top 50 life insurers to better understand risk and
improve underwriting efficiency.
Insurance Solutions continues to make progress outside the US.
In the UK, contributory solutions including No Claims Discount
module, which automates verification of claims history and Policy
Insights, a predictor of motor claims loss, are delivered through the
LexisNexis Informed Quotes platform to provide real-time data in
the quoting process. In China, Genilex is delivering key vehicle data
to auto insurers and is looking to add more analytics solutions. In
India, our Intelligence Exchange contributory platform and Risk
Insights solution are used by life insurers to predict, better assess
and manage risk within the underwriting and claims management
processes. In Brazil, Insurance Solutions is delivering telematics
solutions, data and analytics to help motor insurers in underwriting
and working with health insurers to reduce claims costs and make
faster, more focused decisions.
Risk & Business Analytics
We combine data and analytics with deep
industry expertise to help customers make
better decisions and manage risk. We deliver
insight to insurance companies and help detect
and prevent online fraud and money laundering.
We provide digital tools that help airlines and
farmers improve their operations.
More than 80% of new US auto insurance
policies issued to consumers in 2017 benefited
from our products
LexisNexis Risk Solutions performs over 100m
identity verification checks and over 100bn
customer and transaction screening requests
annually, supporting industries such as
banking, fintech and e-commerce
LexisNexis Risk Solutions works with more
than 75% of Fortune 500 companies, seven out
of ten of the world’s top banks and 95 out of the
top 100 personal lines insurance companies
With insight into over 900m ThreatMetrix ID
anonymised user identities, ThreatMetrix
delivers the intelligence behind over 30bn
annual authentication and trust decisions to
differentiate legitimate customers from
fraudsters in real time
Accuity has information on over 22,000 banks,
and hosts over 600,000 financial counterparty
due diligence documents. Over 95 of the world’s
largest 100 banks use its data
Cirium tracks 100,000 commercial flights every
day and more than 70m passenger itineraries a
year, while analysing 2.5bn travel segments per
annum worth about $300bn. Cirium holds data
on more than 100,000 commercial aircraft
† 2016 and 2017 restated for adoption of new accounting standards
IFRS 9, IFRS 15 and IFRS 16.
20 RELX Annual report and financial statements 2018 | Business review
RELX Annual report and financial statements 2018 | Risk & Business Analytics
VerifyHCP World Compliance
The VerifyHCP solution provides a proven
approach to help payers keep their provider
directories current and improve compliance
with US state and federal regulations
Our leading-edge curated content related
to economic sanctions, financial crime
enforcement actions, politically exposed
persons (PEPs), and adverse media enables
customers to comprehensively and efficiently
protect their enterprises from reputational,
regulatory, legal and enforcement risks
LexisNexis Active Insights Risk Defense Platform
An active risk management solution that
provides timely alerts of recent changes
occurring in the household to help insurers
enhance customer relationships with
better service
Innovative solutions for payments and compliance
professionals, from comprehensive data and
software to manage risk and compliance, to
flexible tools that optimise payments pathways
An innovative fraud prevention and identity
management platform that seamlessly
delivers the broadest of solutions including the
latest in machine learning that adapts to ever-
changing fraud schemes, simplifying efforts
to detect and prevent risks associated with the
merging of digital and physical identities
Claims Compass Accurint
®
Virtual Crime Center ThreatMetrix
®
Digital Identity Network
®
Data analytics suite with LexisNexis Claims
Datafill and LexisNexis Police Records that
improves the claims process from first notice
of loss, triage, investigation and resolution
through recovery
Policing platform used for analytics, crime
analysis and investigations linking public
records to national law enforcement data
for a complete picture across jurisdictions
A network that provides insight into true
digital identity, by analysing global shared
intelligence across more than 30bn annual
transactions to distinguish legitimate
consumers versus fraudsters
Data and analytics for the global commercial
aviation and travel industry
Global provider of news, price benchmarks,
data and research to the energy, chemical
and fertiliser industries
Business Services works with customers to solve key issues,
such as financial exclusion and financial transparency. Business
Services leverages technology, data, advanced linking and
analytics to help banks, telecommunications and e-commerce
companies, retailers and other organisations to prevent fraud,
manage identity risk, comply with financial crime regulations,
assess credit risk and collect debt.
Customers rely on Business Services for identify verification,
watch-list screening, due diligence, credit scoring and skip
tracing. It leverages machine learning (ML) and artificial
intelligence (AI) algorithms in its products to provide customers
with clarity, enabling faster decisions with a greater degree
of confidence.
In 2018, Business Services added digital identity data to its physical
identity dataset through the acquisition of ThreatMetrix. As a result
of the transaction, customers gained access to solutions that
provide a 360-degree view into an identity. This perspective helps
customers make decisions that thwart bad actors while enabling
legitimate consumers to transact frequently in a frictionless
environment. The ThreatMetrix integration continues to hit its
acquisition milestones, including: the creation of a combined
go-to-market organisation that consists of global sales and
marketing teams; the initiation of work to combine our physical
and digital identity solutions into a holistic fraud prevention
and identity management solution; and the undertaking of
development efforts to expand the Digital Identity Network into
financial crime compliance and credit risk assessment for
developing economies.
Business Services continued to make progress in international
markets outside the US, building scale in key geographies
including the UK and Brazil.
Data Services provides indispensable business information, data
and analytics solutions to professionals in many of the world’s
biggest industries, including: Accuity, a provider of services and
solutions to the banking and corporate sectors focused on
payment efficiency, Know Your Customer (KYC), anti-money
laundering (AML) and compliance; ICIS, an information and data
service in chemicals, energy and fertilisers; Cirium, a leading
provider of data and analytics for the global commercial aviation
and travel industry; Proagrica, a provider of software, connectivity
solutions, data, analytics and media streams for the global
agriculture sector; XpertHR, an online service providing
regulatory guidance, best practices and tools for human resource
professionals; EG, which delivers a mix of high-quality data,
decision tools and high-value news and information to the UK’s
commercial real estate market; and Nextens, a provider of tools
and services for tax professionals.
In 2018, Data Services completed the acquisitions of Safe Banking
Systems, a specialist provider of AML and KYC compliance
solutions with a particular focus on account screening and SST
Solutions, a leading provider of precision agriculture technologies
and tools in the US. Data Services also continued to reshape its
portfolio, exiting areas not core to its strategy, divesting Boerderij,
a Netherlands-based agriculture title, during the course of
the year.
21
Overview Business review Financial review Governance Financial statements and other information
Government Solutions provides a variety of identity management,
fraud detection and prevention, collections and investigation
solutions to US federal, state and local law enforcement and
government agencies. These solutions help verify beneficiaries
for government programmes, solve criminal cases, support
national security initiatives and identify fraud, waste and abuse
in government benefit programmes, as well as identity theft
solutions for tax agencies to help ensure legitimate taxpayers
receive refunds and business intelligence solutions allowing
government agencies to find additional fraud and property tax.
Market opportunities
We operate in markets with strong long-term growth in demand
for high-quality advanced analytics based on industry information
and insight, including: insurance underwriting transactions;
insurance acquisition, retention and claims handling; healthcare,
tax and public benefits fraud; financial crime compliance; business
risk; fraud and identity solutions; due diligence requirements
surrounding customer enrolment; security and privacy
considerations; and data and advanced analytics for the banking,
energy and chemicals, aviation and human resources sectors.
In the insurance segment, growth is supported by increasing
transactional activity in the auto, commercial and life insurance
markets and the increasing adoption by insurance carriers of
more sophisticated data and analytics in the prospecting,
underwriting and claims evaluation processes, to assess risk,
increase competitiveness and improve operating cost efficiency.
Transactional activity is driven by growth in insurance quoting and
policy switching, as consumers seek better policy terms.
This activity is stimulated by competition among insurance
companies, high levels of carrier advertising and rising levels of
internet quoting and policy binding. We continue to expand our
services to make it easier for the consumer to transact with an
insurer throughout the insurance process. We are developing
solutions that bridge insurers and automakers, utilising
connectivity as a means to leverage and monetise the data from
Advanced Driver Assistance Systems (ADAS) and connected cars,
and engage consumers with driving behaviour information,
collision detection and other insurance-related services.
Mounting fraud losses, continuing AML fines, high-profile
anti-bribery and corruption cases, growth through consumer and
business credit expansion, and heightened regulatory scrutiny
create growth opportunities. The rise of fintech, alternative lending
and digital economy companies is also creating opportunities.
A number of factors support growth for compliance solutions in
banking and financial services markets, including cross-border
payments and trade finance levels. In collections, demand is driven
mainly by the ongoing escalation of consumer debt and the prospect
of recovering that debt.
The increasing demand for our contributory solutions to combat
criminal activity, fraud and tax evasion is driving growth in
government markets. The level and timing of demand in this market
is influenced by government funding and revenue considerations.
Growth in the global energy and chemicals markets is led by
increasing trade and demand for more sophisticated information
solutions. Aviation information markets are being driven by increases
in air traffic and in the number of aircraft transactions. Growth in
agriculture markets is being driven by adoption of technology and
data solutions plus increasing supply chain connectivity.
Strategic priorities
Our strategic goal is to help businesses and governments achieve
better outcomes with information and decision support in their
individual markets through better understanding of the risks and
opportunities associated with individuals, other businesses,
transactions and regulations. By providing high quality industry
data and decision tools, we assist customers in understanding their
markets and managing risks efficiently and cost effectively. To
achieve this, we are focused on: delivering innovative new products;
expanding the range of risk management solutions across adjacent
markets; addressing international opportunities in selected
markets to meet local needs; further growing our data services
businesses; and continuing to strengthen our content, technology
and analytical capabilities.
Risk & Business Analytics has been developing AI and ML
techniques for a number of years to generate the actionable insights
that help our customers to make accurate, better informed and
more timely decisions. The successful deployment of AI and ML
techniques starts with a deep understanding of customer needs,
leverages the breadth and depth of our data sets, coupled with the
expertise and domain knowledge to discern which AI/ML algorithm
to use, in what context, to solve our customers’ business problems
effectively.
Print
2%
Face-to-
face 2%
Electronic
96%
£2,117m
REVENUE BY FORMAT
Rest of world
6%
Europe
15%
North
America
79%
£2,117m
REVENUE BY GEOGRAPHICAL MARKET
Advertising
1%
Transactional
63%
Subscription
36%
£2,117m
REVENUE BY TYPE
22 RELX Annual report and financial statements 2018 | Business review
Business model, distribution channels and competition
Our products are mainly sold directly, typically on a subscription
or transactional basis. Pricing is predominantly on a transactional
basis for insurance carriers and corporations, and primarily on
a subscription basis for government entities.
In the insurance sector, our competitor Verisk sells data and
analytics solutions to insurance carriers but largely addresses
different activities to ours. Principal competitors in the Business
Services and Government Solutions segments include the major
credit bureaus, which in many cases address different activities in
these segments as well.
Data Services competes with a number of information providers
on a service and title-by-title basis including S&P Global Platts,
Thomson Reuters and IHS Markit as well as number of niche and
privately owned competitors.
Underlying revenue growth was strong in 2018, in line with the
prior year. Underlying profit growth matched underlying
revenue growth.
Underlying revenue growth was +8%. The difference between
the constant currency and underlying growth rates reflects
portfolio changes and the transfer of a small number of
healthcare products to Scientific Technical & Medical.
Underlying adjusted operating profit growth matched underlying
revenue growth as we continued to pursue our strategy, with a
primary focus on organic development.
Insurance grew strongly. We continued to drive growth through
the roll-out of enhanced analytics, the extension of data sets, and
by further expansion in adjacent verticals, in US market
conditions that, over the year as a whole, were neutral to mildly
positive. International initiatives continued to progress well.
In Business Services, further development of analytics that help
our customers to detect and prevent fraud and to manage risk
across the financial and corporate sectors continued to drive
growth, in a robust US and international market environment.
In Data Services, organic development of innovative new
products and expansion of the range of risk management
solutions drove growth across market verticals. In Government,
which accounts for around 5% of divisional revenues, we
continued to drive customer value through the introduction of
sophisticated analytics.
Risk & Business Analytics acquired three data and analytics
businesses that support our organic growth strategy in 2018,
ThreatMetrix, SST and Safe Banking Systems, and disposed of a
number of minor print and other assets.
2019 outlook
The fundamental growth drivers of Risk & Business Analytics
remain strong, and we expect underlying operating profit growth
to continue to broadly match underlying revenue growth.
2018 financial performance
2018
£m
2017
†
£m
Underlying
growth
Portfolio
changes
Currency
effects
Total
growth
Revenue 2,117 2,073 +8% -3% -3% +2%
Adjusted operating profit 776 760 +8% -2% -4% +2%
REVENUE
2018
2,117
2,073
†
Underlying growth +8%
2017
£m
ADJUSTED OPERATING PROFIT
2018
776
760
†
Underlying growth +8%
2017
£m
† 2017 restated for adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16.
RELX Annual report and financial statements 2018 | Risk & Business Analytics 23
Overview Business review Financial review Governance Financial statements and other information
Cirium
managing the cost
of disrupted flights
reduction in time
spent resolving a
traveller’s disrupted
flight using Cirium’s
services
Labour strikes, natural disasters and extreme
weather all cause flight disruption, which has a
significant impact on traveller experience and
travel industry costs. In 2017, 3.6m flights were
cancelled or delayed by over 30 minutes. Every year,
airlines lose approximately $35bn because of these
irregular operations. This cost jumps to more than
$60bn when considering the impact to travellers
and the broader ecosystem.
When disruption happens, most airlines publish
waivers to allow travellers to change their flight
plans ahead of the disruption with no change fee.
Most waivers are handled manually on a reactive
basis. There isn’t a standardised format and
travellers often aren’t alerted effectively or
quickly enough.
Cirium’s Travel Waiver Services automate the
process of matching trips to waivers, making it
easier and quicker for agents to find waiver details
and understand if a traveller’s flight qualifies.
These services allow agents to reallocate travellers
proactively with new travel plans when needed,
reducing the average handling time for incoming
calls and ultimately saving the traveller time and
worry about flight changes.
By integrating Cirium’s service, Gant reduced the
amount of time needed to resolve a traveller’s
disrupted flight by a third. It also contributed to a
reduction in the number of calls agents had to make
to airlines to solve problems by an average of 50%.
Having the right information at the right time means
that Gant could save costs and provide a superior
level of service for travellers affected by disruption.
30%
Gant Travel Management is an innovative travel
management company based in Bloomington,
Indiana, with more than 80 years of experience.
It is expert in optimising the performance of the
world’s largest travel and expense reporting
platform. Its people and technology help
manage the expense and experience of
corporate travel.
24 RELX Annual report and financial statements 2018 | Business review
About Cirium
Cirium brings together powerful data
and analytics to keep the world in motion.
Delivering insight, built from decades of
experience in the sector, enabling travel
companies, aircraft manufacturers,
airports, airlines and financial institutions,
among others, to make logical and
informed decisions which shape the future
of travel, growing revenues and enhancing
customer experiences.
Cirium worked in concert with us
and the travel ecosystem suppliers
to fix a broken process that we all
thought was unfixable. The results
were innovation that saved us over
10% labor costs during key periods
of disruption. This gave us a
significant advantage in staffing
and directly benefited our traveller
experience. Cirium made our new
process possible.
Patrick Linnihan
President & CEO of
Gant Travel Management
Cirium holds data on more than
100,000 commercial aircraft
including the Airbus A330
25
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Risk & Business Analytics
ThreatMetrix
identifying and blocking
fraud in real time
Gumtree was founded in 2000 as a classified
adverts site for travellers arriving in London.
From these modest beginnings, Gumtree.com
is now the UK’s leading classifieds site, with
16.4m unique visitors and 12.6m replies
to adverts each month.
84%
increased
fraud detection
rate forecasted
by using
ThreatMetrix's
data and analysis
Gumtree brings together an eclectic collection
of like-minded buyers, sellers and other users
ranging from flat-sharers looking to fill a vacant
room to cars, clothes and vintage furniture sales.
The platform does not process any payment
transactions and therefore relies on the safety,
trustworthiness and authenticity of users.
Historically fraudsters have seen a clear
opportunity to exploit the platform. They sign up
for accounts in order to make fake listings or dupe
unsuspecting users into transferring money for an
item that never materialises. Gumtree needed a
solution that could maintain the integrity of the
platform while keeping fraudsters out. It
harnessed intelligence from the ThreatMetrix
Digital Identity Network to better identify high-risk
users before they opened a Gumtree account.
The ThreatMetrix Digital Identity Network
crowdsources intelligence from millions of daily
consumer interactions including logins, payments,
and new account applications across thousands
of global businesses. Using this information,
ThreatMetrix creates a unique digital identity for
each user by analysing the myriad connections
between devices, locations and anonymised
personal information.
Behaviour that deviates from this trusted digital
identity can be accurately identified in real time,
alerting Gumtree to new users who may be using
stolen identity data, obfuscating their location or
attempting to sign up for multiple accounts from the
same device.
26 RELX Annual report and financial statements 2018 | Business review
About ThreatMetrix
ThreatMetrix, a LexisNexis Risk
Solutions Company, empowers the global
economy to grow profitably andsecurely
without compromise.
With deep insight into anonymised
digital identities, ThreatMetrix ID delivers
the intelligence behind 30bn annual
authentication and trust decisions, to
differentiate legitimate customers from
fraudsters in real time.
Overview Business review Financial review Governance Financial statements and other information
The ThreatMetrix team has been
really proactive in helping us improve
our rules for detecting fraud, so
much so that we have seen a
significant increase in the fraud
detection rate since we worked
together to improve the performance
of the model.
Fergus Campbell
Head of Communications,
Gumtree
Gumtree was founded
in London in 2000
27
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Risk & Business Analytics
Business overview
Legal provides legal, regulatory and business information
and analytics that helps customers increase their productivity,
improve decision-making and achieve better outcomes.
LexisNexis Legal & Professional is headquartered in New York
and has further principal operations in Ohio, North Carolina and
Toronto in North America, London and Paris in Europe, and cities
in several other countries in Africa and Asia Pacific. It has 10,500
employees worldwide and serves customers in more than
130 countries.
Revenues for the year ended 31 December 2018 were £1,618m,
compared with £1,686m
†
in 2017 and £1,619m
†
in 2016. In 2018,
67% of revenue came from North America, 21% from Europe and
the remaining 12% from the rest of the world. Subscription sales
generated 77% of revenue and transactional sales 23%.
LexisNexis Legal & Professional is organised in market-facing
groups. These are supported by global shared services
organisations providing platform and product development,
operational and distribution services, and other support functions.
In North America, electronic reference, decision tools and
analytics help legal and business professionals make better
informed decisions in the practice of law and in managing their
businesses. The flagship product for legal research and analytics
is Lexis Advance, which provides statutes and case law together
with analysis and expert commentaries from secondary sources,
such as Matthew Bender. Furthermore, Lexis Advance includes
the leading citation service, Shepard’s, which advises on the
continuing relevance of case law precedents. In North America,
LexisNexis also provides customers with news and business
information, ranging from daily news to company filings, public
records information, legal analytics tools, practical guidance,
and efficiency solutions. LexisNexis also partners with law
schools to provide services to students as part of their training.
In 2018, LexisNexis continued to release new versions of Lexis
Advance, an innovative web and mobile application designed to
transform how legal professionals conduct research and use
analytics and data to drive decision making. Built on the New Lexis
advanced technology platform, Lexis Advance allows customers
within legal and professional organisations to find relevant
information more easily and efficiently, helping to drive better
outcomes. Future releases will further expand content and add
new innovative analytical tools extensively using machine learning
(ML) and natural language processing (NLP). LexisNexis employs
lawyers and trained editors with professional legal backgrounds
who review, annotate, and update its legal content to help ensure
the collection is current and comprehensive. This domain
expertise combined with artificial intelligence (AI) and RELX's big
data HPCC technology enables LexisNexis to update its entire
legal collection faster and more efficiently than before, while also
identifying and linking content, enabling customers to identify
previously undiscovered relationships between documents.
LexisNexis continues to invest in advanced ML and AI capabilities
that help power Lexis Advance. In 2018, these technologies were
used to enhance the Lexis Answers solution which leverages
advanced NLP technologies, with the introduction of additional
question types and features.
Legal
We help lawyers win cases, manage their work
more efficiently, serve their clients better and
grow their practices. We assist corporations
in better understanding their markets and
preventing bribery and corruption within their
supply chains. We partner with leading global
associations and customers to help advance
the rule of law across the world.
The LexisNexis legal and news database
contains 109bn documents and records
1.7m new legal documents are added daily to
the database from 52,000 sources, generating
43bn connections. In all, 20m legal documents
are processed daily
Nexis news and business content includes
40,000 premium sources in 30 languages,
covering more than 150 countries. It has data
including 320m company profiles with a content
archive that dates back 40 years
The LexisNexis database includes more than
226m court dockets and documents, 122m
patent documents, 2.1m State Trial Orders, and
1.2m Jury verdict and settlement documents
PatentSight’s database includes objective
ratings of the innovative strength (Patent Asset
Index) of more than 88m patent documents
from more than 80 countries
In 2018, Law360 produced over 50,000 news
and analysis articles
Legal analytics tool Lex Machina has
normalised over 22m counsel mentions and
18m party mentions since 2016
LexisNexis is committed to advancing the rule
of law through operations and solutions that
provide transparency into the law in more than
130 countries
† 2016 and 2017 restated for adoption of new accounting standards
IFRS 9, IFRS 15 and IFRS 16.
28 RELX Annual report and financial statements 2018 | Business review
LexisNexis UK legal practical
guidance service
Critical analysis, checklists, forms and
practice guides authored by industry experts
covering over 50 major practice areas
LexisNexis North American Research
Solution’s practical guidance service
Premier citations service Provides analytics and benchmarking of
SEC filings to optimise compliance strategies
Flagship online legal research tool that
transforms the way legal professionals
conduct research
LexisNexis UK flagship legal
online product
Patent analytics solution that provides
insights into the strength, quality
and value of patent portfolios
Provides Legal Analytics to companies and
law firms, enabling them to craft successful
strategies, win cases and close business
In 2018, LexisNexis enhanced Lexis Advance by incorporating
advanced visualisations including 'Ravel View', a visualisation
enhanced by Shepard’s treatment insights that transforms
traditional case law search lists into a map of the most
authoritative cases. In 2018, LexisNexis also introduced Shepard’s
Case Card, which visually displays key Shepard’s data such as the
number of citing references, type of treatment and most cited
headnote for case law search results.
LexisNexis also continues to expand the reach of its decision tools
and analytics. In 2018, LexisNexis launched Lexis Analytics, a suite
of analytics tools that incorporates the capabilities of Lex Machina,
Intelligize, and Ravel Law. In conjunction with the launch of Lexis
Analytics, LexisNexis also launched Context, a legal language
analytics solution that enables users to extract language deemed
most persuasive by judges from court opinions, challenges,
and motions.
The legal analytics tool Lex Machina also extended its reach with
the addition of four new modules in 2018, including Trade Secret
and Insurance, taking the total number of practice areas covered
to 13. Lexis Practice Advisor rolled out an additional eight
modules, including Antitrust, Data Privacy and Security, and
Trusts and Estates, taking the total to 17 active modules.
In the Intellectual Property analytics space, LexisNexis
proprietary Patent Asset Index, created by PatentSight, is used
by corporations worldwide to manage and value their intellectual
property portfolios.
In 2018, LexisNexis also launched a State Law Comparison Tool
on Lexis Practice Advisor, which covers four practice areas and
51 jurisdictions. The tool compares differences in the law across
state jurisdictions and produces a customisable report to support
complex research projects.
In Canada, LexisNexis enhanced Lexis Advance Quicklaw by
incorporating advanced data visualisation with the introduction
of Search Term Maps.
LexisNexis also supplies Business of Law Software Solutions
to law firms and corporate legal departments. These solutions
include practice management solutions, case management,
and cost recovery services.
In international markets outside North America, LexisNexis
serves legal, corporate, government, accounting and academic
markets in Europe, Africa and Asia Pacific with local and
international legal, regulatory and business information.
The most significant of these businesses are in the UK, France,
Australia and South Africa.
In the UK, LexisNexis is a leading legal information provider
offering an extensive collection of primary and secondary
legislation, case law, expert commentary, practical guidance,
and current awareness. Its extensive portfolio includes a number
of leading brands: Halsbury’s, Butterworths, Tolley, MLex, and
Jordan Publishing. In 2018, LexisNexis has continued to bring
increasingly sophisticated analytics to market, such as Tolley.AI,
a question-and-answer research tool that uses NLP to
understand and answer customer questions within the tax
practice area.
In 2018, LexisNexis further increased practical guidance
functionality. This included adding greater depth and practical
overlay to the core content set, launching new content types such
as interactive workflow documents, as well as further investment
in LexisPSL’s search capability. Contract productivity and
proofreading tool LexisDraft is widely used among the largest law
firms, while MLex has become a leading source of regulatory
news and insight for legal professionals. Tolley, the LexisNexis tax
intelligence suite, continued to expand its reach in 2018, with tax
firms of all sizes leveraging TolleyLibrary and TolleyGuidance.
In France, LexisNexis’ main offering, Lexis360, is an integrated
solution combining legal information, in-depth analysis with
JurisClasseur content, and practical guidance. In 2018, LexisNexis
enhanced the Lexis360 solution, improving user experience,
performance and search relevance.
29
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Legal
In South Africa, LexisNexis launched a regulatory monitoring
service for 13 African countries, through its online Lexis
Assure product.
In Austria, LexisNexis launched two modules for Lexis360,
targeting the tax and corporate segments, adding video content
and webinar capabilities.
In the Middle East, LexisNexis launched Gulf Legal Advisor,
an integrated practical guidance solution.
In the Asia Pacific region, LexisNexis continued its focus on
providing authoritative local online content embedded in decision
tools for legal professionals. In Australia, the New South Wales
Court of Appeal Analyser was launched with data visualisation,
and New Zealand launched ComplyHub, which is a regulatory
compliance tool for small and medium sized businesses.
Lexis China released a new version of its flagship online legal
research platform with improved user experience features and
expanded content.
Supporting our Rule of Law mission, LexisNexis has been named
among the top ten companies for corporate social responsibility in
the 2018 Annual Review of the State of CSR in Australia and New
Zealand for a second year running. LexisNexis Australia is also an
official project partner in a landmark inquiry led by the Australian
Human Rights Commissioner into the challenges to human rights
and freedoms presented by technologies such as AI, social media,
and big data.
Market opportunities
Longer term growth in legal and regulatory markets worldwide is
driven by increasing levels of legislation, regulation, regulatory
complexity and litigation, and an increasing number of lawyers.
Additional market opportunities are presented by the increasing
demand for online information solutions, legal analytics and other
solutions as well as decision support solutions that improve the
quality and productivity of research, deliver better legal outcomes
and improve business performance. Notwithstanding this, legal
activity and legal information markets are also influenced by
economic conditions and corporate activity, as has been seen with
the continued subdued environment in North America and Europe.
Strategic priorities
LexisNexis Legal & Professional’s strategic goal is to enable
better legal outcomes and be the leading provider of productivity-
enhancing information, analytics and information-based decision
tools in its market. To achieve this, LexisNexis is focused on
introducing next-generation products and solutions on the global
New Lexis platform and infrastructure; incorporating advanced
technologies including ML and NLP; leveraging New Lexis globally
to drive print-to-electronic migration and long-term international
growth; and upgrading operational infrastructure, improving
process efficiency and gradually improving margins.
In the US, LexisNexis is focused on the ongoing development of
legal research and practice solutions that help lawyers make
data-driven decisions. Over the coming years, progressive
product introductions, based on the New Lexis platform and
powered by big data HPCC Systems technology, will combine
advanced technologies, enriched content and sophisticated
analytics to enable LexisNexis customers to make data-driven
legal decisions and drive better outcomes for their organisations
and clients.
Outside the US, LexisNexis is focused on growing online services
and developing further high-quality actionable content and
decision tools, including the development of additional practical
guidance and decision tools. In 2019, LexisNexis will continue to
expand the New Lexis platform globally, including launches in
Malaysia and Singapore. Additionally, LexisNexis is focusing on
the expansion of its activities in emerging markets.
LexisNexis is also continuing the mission of spreading equality,
transparency and access to legal remedies globally through the
recently formed LexisNexis Rule of Law Foundation, a non-profit
entity that will help provide financial and other support for projects
that aim to advance the Rule of Law around the world.
Business model, distribution channels and competition
LexisNexis Legal & Professional products and services are
generally sold directly to law firms and to corporate, government,
accounting and academic customers on a paid subscription basis,
with subscriptions with law firms often under multi-year contracts.
Principal competitors for LexisNexis in US legal markets are
Westlaw (Thomson Reuters), CCH (Wolters Kluwer) and
Bloomberg. In news and business information key competitors
are Bloomberg and Factiva (News Corporation).
Significant international competitors include Thomson Reuters,
Wolters Kluwer and Factiva.
Print
17%
Electronic
83%
£1,618m
REVENUE BY FORMAT
Rest of world
12%
Europe
21%
North
America
67%
£1,618m
REVENUE BY GEOGRAPHICAL MARKET
Transactional
23%
Subscription
77%
£1,618m
REVENUE BY TYPE
30 RELX Annual report and financial statements 2018 | Business review
† 2017 restated for adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16.
Underlying revenue growth in 2018 was in line with the prior
year, with continued efficiency gains driving strong underlying
operating profit growth.
Underlying revenue growth was +2%. The difference between
the constant currency and underlying growth rates reflects
portfolio changes.
Underlying adjusted operating profit growth was +10%. The
increase in operating profit margin reflects ongoing organic
process improvements as we enter the latter stages of systems
decommissioning. This more than offset the absence of a profit
contribution from joint ventures, and other portfolio effects.
The market environment for legal services, and for legal
information providers, remained stable. Electronic revenues
saw continued growth, partially offset by print declines.
The roll-out of new platform releases with broader data sets
and tools continued across our US and international markets.
In 2018 we supported the organic expansion of our leading legal
analytics services with the acquisition of the German IP analytics
business Patentsight, and disposed of two minor assets.
2019 outlook
Trends in our major customer markets are unchanged,
continuing to limit the scope for underlying revenue growth.
We expect good underlying profit growth.
2018 financial performance
2018
£m
2017
†
£m
Underlying
growth
Portfolio
changes
Currency
effects
Total
growth
Revenue 1,618 1,686 +2% -3% -3% -4%
Adjusted operating profit 320 328 +10% -10% -2% -2%
REVENUE
2018
1,618
1,686
†
Underlying growth +2%
2017
£m
ADJUSTED OPERATING PROFIT
2018
320
328
†
Underlying growth +10%
2017
£m
31
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Legal
Mayer Brown is a global law firm that advises
the world’s leading companies and financial
institutions on their most complex deals and
disputes. With extensive reach across four
continents, it is the only integrated law firm in
the world with approximately 200 lawyers in
each of the world’s largest financial centres
– New York, London and Hong Kong.
Intelligize
helping law firms advise on
complex financial disclosures
About Intelligize
Intelligize pulls together and
automatically links a broad set of SEC
disclosure documents from filings
to comment letters, agreements and
other exhibits – enabling customers
to navigate between related content
with ease.
With advanced search tools and
graphical analytical views, the solution
rapidly delivers deep insights into filing
and disclosure characteristics that
would otherwise require extensive
research effort. Intelligize makes it
easy to identify market standard
language and mitigate risk in
disclosures by benchmarking output
from multiple peer companies.
Mayer Brown advises issuers, investment banks
and investors in making disclosures to the US
Securities and Exchange Commission (SEC).
These disclosures relate to transactions such
as public offerings. The firm’s clients are under
constant pressure to stay up to date with
regulatory change. They depend on Mayer Brown
partner Anna Pinedo and her colleagues to help
them ensure the disclosures are accurate and
that they are aware of disclosure trends, peer
company disclosures and related matters.
However, researching relevant precedents
can take a lot of time – so finding a more efficient
way of working is critical to Mayer Brown and
its clients.
When Mayer Brown is engaged on a new securities
offering, it regularly uses Intelligize to quickly find
peer companies in the same industry for insights
on similar disclosures. Intelligize instantly
provides links to relevant SEC comments and
responses from multiple peer companies. This
puts clients in a position to anticipate potential
problems and put forward disclosures that avoid
expensive and time consuming comment letters
from the regulator.
32 RELX Annual report and financial statements 2018 | Business review
Intelligize makes it easy to find the
precedents you know are out there
for specific transaction types and
peer companies. It allows us to very
efficiently analyze massive amounts
of disclosure documents, efficiencies
we can pass on to our clients.
Anna Pinedo
Partner, Mayer Brown LLP
Intelligize
Mayer Brown LLP's
offices in New York
33
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Legal
Business overview
Exhibitions is a leading global events business. It combines
face-to-face with data and digital tools to help customers
learn about markets, source products and complete transactions
at over 500 events in almost 30 countries, attracting more than
7m participants.
Reed Exhibitions has its headquarters in London and has further
principal offices in Paris, Vienna, Düsseldorf, Moscow, Norwalk
(Connecticut), Mexico City, São Paulo, Abu Dhabi, Beijing,
Shanghai, Tokyo, Singapore and Sydney. Reed Exhibitions has
4,200 employees worldwide and its portfolio of events serves 43
industry sectors.
Revenues for the year ended 31 December 2018 were £1,219m
compared with £1,109m
†
in 2017 and £1,047m
†
in 2016. In 2018,
18% of Reed Exhibitions’ revenue came from North America, 44%
from Europe and the remaining 38% from the rest of the world on
an event location basis.
Reed Exhibitions organises influential events in key markets
focused on addressing the needs of the industry, where
participants from around the world meet face-to-face to do
business, to network and to learn. Its events encompass a wide
range of sectors. They include construction, cosmetics,
electronics, energy and alternative energy, engineering,
entertainment, gifts and jewellery, healthcare, hospitality, interior
design, logistics, manufacturing, media, pharmaceuticals, real
estate, recreation, security and safety, transport and travel.
Market opportunities
Growth in the exhibitions market is influenced both by
business-to-business marketing spend and by business
investment. Historically, these have been driven by levels of
corporate profitability, which in turn has followed overall growth
in gross domestic product. Emerging markets and higher growth
sectors provide additional opportunities. Reed Exhibitions’
broad geographical footprint and sector coverage allows it to
effectively and efficiently capture growth opportunities globally
as they emerge.
As some events are held other than annually, growth in any one
year is affected by the cycle of non-annual exhibitions.
Strategic priorities
Reed Exhibitions’ strategic goal is to deliver measurably higher
value and improved outcomes to its customers. It is achieving this
organically by being focused on understanding and responding
to individual customers’ needs and business objectives and the
changing markets it serves.
Reed Exhibitions delivers a platform for industry communities
to conduct business, to network and to learn through a range
of market-leading events in all major geographic markets and
higher growth sectors, enabling exhibitors to target and reach
new customers quickly and cost effectively.
Exhibitions
Our events leverage industry expertise, large
data sets and technology to enable our customers
to generate billions of dollars ofrevenues for the
economic development of local markets and
national economies around theworld.
More than 500 events are in the Reed
Exhibitions portfolio
43 industry sectors are served in almost 30
countries across the globe
Each year we host around 130,000 exhibitors
attracting more than 7m participants
In 2018 Reed Exhibitions launched 44
new events
Our digital products increase the value of our
events to participants, enabling them to make
new contacts and meet face-to-face to do
business. In 2018, 247 events offered proactive
matchmaking and the vast majority of
customers using the matchmaking service
reported higher value and satisfaction
† 2016 and 2017 restated for adoption of new accounting standards
IFRS 9, IFRS 15 and IFRS 16.
34 RELX Annual report and financial statements 2018 | Business review
Organic growth will be achieved by continuing to generate greater
customer value through combining the best of face-to-face with
data and decision tools, launching new events, and by leveraging
its global network and technology platforms for faster and more
agile development and deployment of innovation. Reed Exhibitions
is also actively shaping its portfolio through a combination of
new launches, strategic partnerships and selective acquisitions
in faster growing sectors and geographies, as well as by
withdrawing from markets and industries with lower long-term
growth prospects.
Reed Exhibitions is committed to continuously improving
customer solutions and experience by developing global
technology platforms based on industry databases, digital tools
and analytics. By providing a variety of services, including its
integrated web platform, the company continues to drive up
customer value and satisfaction by proactively putting the right
buyers and sellers together on the event floor. Increasingly,
digital and multichannel services such as active matchmaking are
becoming a normal part of the customer expectation and product
offering, enhancing the value delivered through attendance at the
event. Using customer insights, Reed Exhibitions has developed
an innovative product offering that underpins the value proposition
for exhibitors by broadening their options in terms of the type and
location of stand they take and the channels through which they
can address potential buyers.
In 2018 Reed Exhibitions launched 44 new events. These included
many events which delivered on the strategy of taking sector
expertise, customer relationships and leading brands from one
market and extending them into new geographies using local
operational capability.
Strong brands and value propositions in long established sectors
continued to expand into new geographic markets with FIBO USA
joining FIBO China and the original FIBO Germany in the fitness
sector. There was also rapid extension of successful launches and
recently acquired brands into new markets. Bar Convent Berlin, in
the bar equipment sector, was extended into the USA in 2018 with
Bar Convent Brooklyn. In property, the successful launch of MIPIM
Property Tech Summit in New York was followed in 2018 by MIPIM
Property in Paris.
The POP culture portfolio continued to grow strongly with
launches in the USA (KeyStone Comic Con), South Africa (Comic
Con Africa) and France (Play), and a further acquisition in the UK
(Gamer Network).
Emerging high potential sectors and the evolution of existing
industries were served through innovative and highly curated
launches such as AI Expo (artificial intelligence), the Functional
Fabric Fair (advanced fabrics), Lightweight Asia (advanced
materials), Esports BAR (e-sports) and Travel Forward
(travel technology).
Reed Exhibitions is active in developing exhibition markets with
launches in Mexico, Brazil, South Korea, South Africa, Vietnam,
Saudi Arabia and China during 2018.
Two small acquisitions were completed during 2018. As well as
Gamer Network in the UK, Reed Exhibitions became the majority
owner of the Automotive Manufacturing Technology & Material
Show (AMTS) show in China and the co-located Shanghai
International Assembly & Handling Technology Exhibition (AHTE).
In addition, in January 2019, Reed Exhibitions announced the
acquisition of Mack Brooks, a business with a portfolio of more
than 30 events in 14 countries, including Germany and the
United Kingdom, serving nine industry sectors. Flagship brands
include EuroBLECH (sheet metal working technology); inter
airport (airport infrastructure and technology); Fastener Fair
(fastener and fixing technology); and Chemspec (fine and
speciality chemicals).
Business model, distribution channels and competition
Over 70% of Reed Exhibitions’ revenue is derived from
exhibitor fees, with the balance primarily consisting of admission
charges, conference fees, sponsorship fees and online and
offline advertising. Exhibition space is sold directly or through
local agents where applicable. Reed Exhibitions often works in
collaboration with trade associations, which use the events to
promote access for members to domestic and export markets,
and with governments, for which events can provide important
support to stimulate foreign investment and promote regional
and national economic activity. Increasingly, Reed Exhibitions is
offering visitors and exhibitors the opportunity to interact before
and after the show through the use of digital tools such as online
directories, matchmaking and mobile apps.
Reed Exhibitions is one of the largest global events organisers in
a fragmented industry, holding a global market share of less than
10%. Other international exhibition organisers include Informa,
Clarion and some of the larger German Messen, including Messe
Frankfurt, Messe Düsseldorf and Messe Munich. Competition
also comes from industry trade associations and convention
centre and exhibition hall owners.
RELX Annual report and financial statements 2018 | Exhibitions 35
Overview Business review Financial review Governance Financial statements and other information
®
®
®
®
04-06 JUNE 2019 OLYMPIA LONDON
EUROPE
PRIMARY LOGO WITH DATES
2 COLOUR WHITE LOGO WITH DATES
WHITE LOGO WITH DATES
MIPIM: The world’s property market Everything about information security China (Shenzhen) International Gifts,
Handicrafts, Watches & Houseware Fair:
One of the largest business gifts & home
fairs in China
LONDON
World Travel Market: Premier global event
for the travel industry
Salão Internacional do Automóvel: Brazil’s
automobile event
Bar Convent Berlin: International bar &
beverage trade show
INT'L PHARMACEUTICAL R&D AND MANUFACTURING EXPO
National Hardware Show: US home
improvement and DIY trade fair
Interphex Japan: Japan’s pharmaceutical R&D
and manufacturing show
Expoprotection: The exhibition for risk
prevention & management
One of the largest & longest standing
electronics manufacturing trade shows
The world’s entertainment content market The destination for the global aircraft interiors
industry
Leading international exhibition for personal
care ingredients
International security conference Focused on the culture & community that
is gaming
MERCHANDISE SHOW
The golf business show The trade show for the doors and windows
industry
New York Comic Con: The East Coast’s largest
pop culture convention
Face-to-face
96%
Electronic
4%
£1,219m
REVENUE BY FORMAT REVENUE BY GEOGRAPHICAL MARKET
Rest of
world
38%
Europe
44%
North
America
18%
£1,219m
EVENTS REVENUE BY SOURCE
Admissions
and other
29%
Exhibitor
fees
71%
£1,219m
36 RELX Annual report and financial statements 2018 | Business review
Exhibitions achieved strong underlying revenue growth in
2018, with underlying operating profit growth reflecting
cycling-in effects.
Underlying revenue growth was +6%. After portfolio changes
and five percentage points of cycling-in effects, constant
currency revenue growth was +12%.
Underlying adjusted operating profit growth was +10% reflecting
cycling-in effects.
In 2018 we continued to pursue organic growth opportunities,
launching 44 new events and piloting and rolling out several data
analytics initiatives.
Underlying growth was good in Europe and strong in Japan and
China. The US continued to see differentiated growth rates by
industry sector, and Brazil returned to growth. Most other
markets continued to grow well.
We expect the Tokyo Olympic Games to constrain local venue
capacity over the next 18 months, after which new and expanded
exhibition space will become available. This could reduce the
overall divisional underlying revenue growth rate by around one
percentage point this year and next.
In 2018 we completed two small acquisitions, Gamer Network
and AMTS, and made two minor disposals. Since the year end we
have acquired Mack Brooks, a leading organiser of over 30 highly
complementary events across key geographies and industrial
verticals.
2019 outlook
We expect underlying revenue growth trends to continue, the
above temporary venue constraints aside, and we expect
cycling-out effects to reduce the reported revenue growth rate
by around five percentage points.
2018 financial performance
2018
£m
2017
†
£m
Underlying
growth
Portfolio
changes
Currency
effects
Total
growth
Revenue 1,219 1,109 +6% +1% -2% +10%
Adjusted operating profit 313 287 +10% +1% -2% +9%
Underlying revenue growth rates exclude exhibition cycling effects.
† 2017 restated for adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16.
REVENUE
2018
1,219
1,109
†
Underlying growth +6%
2017
£m
ADJUSTED OPERATING PROFIT
2018
313
287
†
Underlying growth +10%
2017
£m
RELX Annual report and financial statements 2018 | Exhibitions 37
Overview Business review Financial review Governance Financial statements and other information
Vision Expo
bringing clarity and vision
to small business growth
Coco and Breezy is a designer glasses and
sunglasses brand co-founded, owned and
designed by twins Corianna and Brianna
Dotson. The sisters launched their brand
in 2009 at the age of 19 and in a few short
years have built a successful and high-profile
business with innovative eyewear designs
that have been worn by celebrities including
Prince, Beyoncé, Lady Gaga and Rihanna.
About Vision Expo
Vision Expo is one of the leading
shows for eye care professionals to
discover and learn about the latest
technologies, trends and products
in the sector.
The exhibition has two locations – Vision
Expo East based in New York and Vision
Expo West in Las Vegas. Combined,
the shows bring together over 700
exhibitors and 27,000 global industry
professionals to network and share
knowledge on the latest innovations in
products, solutions and fashion in the
industry. Through the collaboration
of The Vision Council, the exhibition
also invests in programmes to drive
market growth and promote awareness
of eye health.
400
stores across North
America now stock
Coco and Breezy eyewear
thanks in part to business
growth opportunities
at Vision Expo
Based in New York, the twins channel their
unique style to create frames using a variety of
materials, patterns and colours. Over the past
four years, Coco and Breezy have presented
their brand and unveiled new frames and
products to an audience of experts at Vision
Expo. They attribute a component of their
growth to showcasing their products via
multiple platforms at the show including
fashion shows, panel discussions, style events,
interviews, and press previews. Vision Expo has
enabled Coco and Breezy to make the shift from
being a fashion brand, sold only in fashion
stores, to embedding their company into the
eyewear and eye care industry.
38 RELX Annual report and financial statements 2018 | Business review
Before we started showing at Vision
Expo our eyewear was sold in about
30 fashion stores. Now our eyewear is
sold in about 400 optical practices in
North America.
Corianna and Brianna Dotson
Co-founders, Owners and Designers,
Coco and Breezy
Coco and Breezy at
Vision Expo West
39
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Exhibitions
40 RELX Annual report and financial statements 2018 | Business review
Corporate
Responsibility
The Corporate Responsibility Report is
an integral part of our Annual Report
and Financial Statements. This section
highlights progress on our 2018 corporate
responsibility objectives. The full 2018
Corporate Responsibility Report is
available at www.relx.com/go/CRReport
Non-financial information statement
RELX is required to comply with the
reporting requirements of sections 414CA
and 414CB of the Companies Act 2006, which
relate to non-financial information. The list
below outlines for our stakeholders where
this information for RELX can be found:
Reporting Requirement:
Environmental matters 51 – 52
Employees 47
Social matters 43, 45, 49, 50
Human rights, 42, 46, 49, 50
Anti-corruption and
anti-bribery matters, 42, 46, 49, 50
Policies, due diligence
processes and outcomes 45 – 46
Description and management
of principal risks and impact
of business activity, 60 – 63
Description of
business model 16, 23, 30, 35
Non-financial metrics 14 – 52
41
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018
Corporate responsibility
We define corporate responsibility
(CR) as the way we do business,
working to increase our positive
impact and reduce any negative
impact. It ensures good
management of risks and
opportunities, helps us attract
and retain the best people and
strengthens our corporate
reputation.
It means performing to the highest commercial and ethical
standards and channelling our knowledge and strengths, as
global leaders in our industries, to make a difference to society.
We regularly survey key stakeholders, including in 2018,
shareholders, employees, governments and communities
where we operate, to help us identify our material CR issues
and to set and test our CR objectives. The Board of Directors,
senior management and our Corporate Responsibility Forum
oversee CR objectives and performance.
We concentrate on the contributions we make as a business
and on good management of the material areas that affect
all companies:
1. Our unique contributions
2. Governance
3. People
4. Customers
5. Community
6. Supply chain
7. Environment
We are committed to the United Nations Global Compact (UNGC)
to which we are a signatory and are dedicated to advancing the
UN’s Sustainable Development Goals (SDGs) by 2030.
1. Our unique contributions
We make a positive impact on society through our knowledge,
resources and skills, including:
Universal sustainable access to information
Advance of science and health
Protection of society
Promotion of the rule of law and justice
Fostering communities
Scientific, Technical & Medical
Elsevier, the world’s leading provider of scientific, technical and
medical information, plays an important role in advancing human
welfare and economic progress through its science and health
information, which spurs innovation and enables critical
decision-making. To broaden access to its content, Elsevier
supports programmes where resources are often scarce. Among
them is Research4Life, a partnership with UN agencies and up to
175 publishers; we provide core and cutting-edge scientific
information to researchers in more than 100 developing countries.
As a founding partner and the leading contributor, Elsevier
provides over a quarter of the material available in Research4Life,
encompassing approximately 3,000 Elsevier journals and 20,000
e-books. In 2018, there were over 1.8m Research4Life downloads
from ScienceDirect.
In 2018, Elsevier launched Scientific African, an open access
collaboration between the Next Einstein Forum and the NEF
Community of Scientists, which will provide African researchers
with a new platform to boost the impact and discoverability of their
research. Elsevier also continued involvement with Innovate
for Life, an accelerator launched by Amref, an Africa-driven
international health NGO, to help African entrepreneurs develop
solutions to African health challenges. To support early-stage
innovators, the Elsevier Foundation is providing funding, as well
as access to knowledge and scientific networks.
Risk & Business Analytics
Risk & Business Analytics’ tools and resources help law
enforcement keep communities safe and help protect society by
detecting and preventing fraud across a range of business sectors
and at US federal, state and local government levels. In the year,
LexisNexis Risk Solutions provided the Police Department in
Keene, Texas with a free Community Crime Map tool, enabling
citizens to view incidences of crime in their neighbourhood.
Risk and Business Analytics colleagues developed the ADAM
programme in 2000 to help the National Center for Missing and
Exploited Children find missing children. ADAM distributes
missing child alert posters to law enforcement, hospitals,
libraries and businesses within specific geographic search areas.
In 2018, we expanded an email alert function to allow those opting
in, to receive an email notification when a child is reported missing
near them. In 2018, five children were found through ADAM,
bringing the total number of children recovered to 182 since the
start of the programme in 2000. During the year, we supported the
launch of a new training course for UK police to help find missing
children more quickly, working with Amber Alert Europe’s Charlie
Hedges and Missing People. We hosted pilot training for the
London Metropolitan Police at our head office in London which
covered such themes as mental health, child sexual exploitation,
homelessness and family breakdown and how to provide
additional support, including Missing People’s free, 24/7 helpline.
To address the US opioid epidemic, LexisNexis Risk Solutions is
taking a multi-faceted approach to help customers address the
problem. Using our healthcare, identity, and law enforcement data
sets, we proactively identify risky providers and individuals,
complex prescription drug diversion schemes, and aid care
coordination efforts for the addicted.
42 RELX Annual report and financial statements 2018 | Business review
In 2018, LexisNexis Risk Solutions launched
the Rapid Education Action (REACT) online
platform for the Global Business Coalition for
Education (GBC-Education) to allow companies
to pledge and deploy their resources quickly
in emergencies and disasters. The aim is to
get millions of displaced and marginalised
children whose learning has been disrupted
by humanitarian crises back into education.
REACT was established to channel private
sector engagement in support of Education
Cannot Wait, a fund dedicated to education
in emergencies launched at the 2016 World
Humanitarian Summit in Istanbul, Turkey.
To date more than 60 firms have signed up to
the digital platform. One of them, software
company Cerego, brokered a partnership with
Thaki, a charity supporting education for
refugee and migrant children in Lebanon.
Thaki founder, Rudayna Abdo, says: “Providing
online literacy training for dispersed migrant
communities comes with many challenges.
We were introduced to Cerego through REACT
which is helping us pursue a successful,
scalable, affordable, self-paced solution that
can be replicated across geographies.”
REACT
Digital expertise to deploy
educational resources
quickly in emergencies
The private sector wants to support
children’s education in emergencies
with their skills and expertise, but do
not know how to be most effective.
REACT matches leading corporations
with education needs on the ground in
real time. We are using tech solutions
to tackle the global education crisis.”
Sarah Brown
GBC-Education Executive Chair
60
companies have
joined REACT to
ensure education
for the most
disadvantaged
children around
the world
The Global Business Coalition
for Education uses the
collective power of business
and other stakeholders to
address education challenges
around the world
43
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate responsibility
1. Our unique contributions (continued)
Legal
LexisNexis Legal & Professional promotes the rule of law and
access to justice through its products and services.
In the year, we expanded our Rule of Law Cafés – which bring
a range of stakeholders together, including customers,
government, NGOs and law societies to discuss opportunities to
go beyond legal minimums to advance the rule of law – to new
jurisdictions. In addition to London, there were Cafés in New York,
Washington DC and Kuala Lumpur.
In the year, we supported the launch of the UNGC’s Peace,
Justice & Strong Institutions Action Platform during UN General
Assembly week and also hosted senior women lawyers from the
Middle East region in London, Washington DC and New York City.
Delegates met with judges, lawyers, law professors and
representatives of professional organisations, legislative bodies,
and governmental institutions and explored the approach of peers
to human rights, intellectual property and sustainability.
Exhibitions
Reed Exhibitions’ events strengthen communities and support
our CR focus areas. In 2018, we advanced show sustainability
including with the launch of Proud Experiences in London, the first
event of its kind focusing on the LGBTQ+ travel market, which will
move to New York City in 2019. Over three days, attendees were
matched with international exhibitors to explore opportunities
in a LGBTQ+ global marketplace estimated by media partner The
Telegraph, in attendance throughout the event, to be worth
$211 billion. There were masterclasses on issues surrounding
issues arising for LGBTQ+ travellers, including whether they
should boycott or support local populations in destinations
where LGBTQ+ rights are curtailed. In the year, Reed Exhibitions
introduced Bio-Mass Innovation Expo in Milan. PSI 2018, for
the promotional products industry, became one of the first
trade shows to ban plastic cups. Pollutec also celebrated its
40th anniversary, a showcase for environmental equipment,
technologies and services. Circular economy was a key theme
to reduce the health and environmental impacts of plastic waste
and pollution.
Across RELX
We created new functionality for the free RELX SDG Resource
Centre, which advances awareness, understanding and
implementation of the UN’s 17 SDGs to end poverty, protect the
planet and ensure prosperity for all people by 2030, with a new
content management system to make it faster and easier to
upload content on to the site. The RELX SDG Resource Centre site
features articles, tools, news, events, networking and original
research, including in 2018, a review of SDG 3 which showed that
related research resulting from a collaboration between
academic institutions and private industry represents a fraction
of the total scholarly output (average of 1.5% over the period),
however it has a field-weighted citation impact, a measure of
quality, nearly four times that of research undertaken by academic
institutions alone. We held two SDG Inspiration Days in the year
which brought together business, government and civil society
to scale engagement on the SDGs. To advance the SDGs, the theme
in Silicon Valley was the role for disruptive technology and in
Amsterdam, building partnerships. The SDG Resource Centre
was a tool for women entrepreneurs participating in the WE
Empower UN SDG Challenge, a global business competition for
women entrepreneurs advancing the SDGs.
2018 marked the eighth year of the RELX Environmental
Challenge, focused on providing improved and sustainable access
to water and sanitation where it is presently at risk. The $50,000
first-prize winner, Flexcrevator, will progress an innovative pit
latrine emptying device developed by North Carolina State
University. The $25,000 second-prize winner was Handypod,
an affordable sanitation solution by Cambodia-based social
enterprise, Wetlands Work, developed for floating communities
and those seasonally affected by flooding. The prize was
announced during the UNGC’s CEO Water Mandate meeting
during 2018 World Water Week in Stockholm; we supported the
attendance of three former RELX Environmental Challenge
winners at World Water Week, allowing them to meet founders
and build networks in their field.
44 RELX Annual report and financial statements 2018 | Business review
2018 OBJECTIVES Achievement
Advance and make
publicly available
research on the state of
science underpinning
the SDGs
Scientific African launched at the
Next Einstein Forum in Kigali,
Rwanda
Launched SDG Perspectives
project, showcasing the impact of
the SDGs on scholarly debate
Produced RELX SDG Graphic on
the state of science underpinning
SDG 3, good health and wellbeing
Partner with the
National Center for
Missing and Exploited
Children to expand
ADAM programme
email alerts to US
consumers; advance
course for UK policing on
missing cases training
Enabled ADAM email alerts; 500
registrations
Supported course for UK policing
on missing cases, encompassing
engaging the media and right to
privacy, return processes and
ongoing support and prevention
Roll out RELX Rule
of Law Cafes across
multiple jurisdictions
Expanded Rule of Law Cafés to
New York, Washington DC and
Kuala Lumpur; quarterly in London
Advanced Rule of Law activities,
including Middle Eastern women
lawyer study tours and support for
mobile courts in Malaysia
Advance sustainability
content across show
portfolios
Established Event Sustainability
Committee comprised of Reed
Exhibitions portfolio directors
Developed Environmental Event
Charter
New functionality for
SDG Resource Centre
including integration of
UN and other partner
content
Built new content management
system
Reached 100 partner content
sources from UN Development
Programme, among others
2019 OBJECTIVES
Meaningful support to advance SDG 3 (good health and
wellbeing), including Elsevier Foundation Women in Water in
Africa leadership workshops
Workstream on improving financial inclusion for low-income
citizens
Meaningful support of SDG 16 (peace, justice and strong
institutions), including support for UNGC SDG 16 Action
Platform
Meaningful support of SDG 11 (sustainable cities), including
focus of Reed Exhibition’s World Efficiency Solutions and a
‘Good Cities’ 2019 Inspiration Day India
Create new RELX SDG Graphics on the state of science
underpinning the SDGs
Broaden RELX SDG Resource Centre to include content from
new partners and enhance functionality, including of SDG
News Tracker
OUR 2030 VISION*
Use our products and expertise to advance the SDGs, among them:
SDG3: Good health and wellbeing
SDG4: Quality education
SDG10: Reduced inequalities
SDG13: Climate action
SDG16: Peace, justice and strong institutions
Enrich the SDG Resource Centre to ensure essential content, tools
and events on the SDGs are freely available to all
* 2030 is the deadline for the UN’s Sustainable Development Goals; we aim to do our
part towards their achievement.
2. Governance
In 2018, we launched the newly revised and updated RELX Code
of Ethics and Business Conduct (the Code) with a message to all
staff. The Code provides the standards for our corporate and
individual conduct and, among key issues, covers fair
competition, anti-bribery, conflicts of interest, employment
practices, data protection and appropriate use of Company
property and information. It also encourages reporting of
violations – with an anonymous reporting option where legally
permissible – and prohibits retaliation against anyone for
reporting a violation he or she believes may have occurred.
The Code supports the principles of the UNGC and stresses our
commitment to human rights. In accordance with the UN’s Guiding
Principles on Business and Human Rights, we have considered
where and how we operate to determine how we can have the
greatest positive impact on the human rights issues of modern
slavery and human trafficking. For more information on human
rights see Supply chain on page 50. In 2018, we updated our
Modern Slavery Act Statement which highlights how we are
working internally through our supply chain and externally with
partners to address the risk of slavery and human trafficking.
We maintain a comprehensive set of compliance policies and
procedures in support of the Code. These are reviewed at least
annually to ensure they remain current and effective. Our policies
and procedures help us comply with the law and conduct our
business in an open, honest, ethical and principled way. In the case
of our anti-bribery efforts, they comprise part of our adequate
procedures for compliance with applicable laws.
Employees receive mandatory training on the Code – both as new
hires and at regular intervals during their tenure – in order to
maintain a respectful workplace, prevent bribery and protect
personal and Company data. Mandatory periodic training covers key
Code topics in depth and is supplemented by advanced in-person
training for higher-risk roles.
In 2018, we took a number of steps to further enhance and embed
our culture of compliance across RELX, including the global
delivery of multiple culture of compliance training sessions across
the Company. We offer employees a confidential reporting line,
managed by an independent third party, accessible by telephone
or online 24 hours a day, 365 days a year (as allowed under
applicable law, employees may submit reports to the confidential
line anonymously).
45
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate responsibility
2. Governance (continued)
Reports of violations of the Code or related policies are promptly
investigated, with careful tracking and monitoring of violations
and related mitigation and remediation efforts by Compliance
teams across the business.
We remained diligent in our ongoing efforts to comply with
applicable bribery and sanctions laws and to mitigate risks in
these areas. Our anti-bribery and sanctions program includes
the enforcement of detailed, risk-based internal policies and
procedures on topics such as doing business with government
officials, gift and entertainment limits, gift registers, and
complying with complex sanctions requirements. Relationships
with third-parties and acquisition targets are evaluated for risk
using questionnaires, references, detailed electronic searches,
and Know Your Customer screening tools. We monitor and assess
the implementation of our anti-bribery and sanctions programs by
continually reviewing and updating our policies and procedures;
conducting periodic programmatic risk-assessments, and
conducting quality assurance reviews and internal audits on the
operational aspects of the programmes.
Following the 2017 roll-out of a Company email ‘PhishMe button’,
which allows employees to make immediate reports, we marked
our annual Cyber Security Awareness Month with the Great
Phishing Challenge to help staff identify the difference between
‘phishy’ and legitimate emails. In the year, RELX won the PwC
Building Public Trust Award for Cyber Security Reporting in the
FTSE 350.
As a signatory to the UNGC and its principles, encompassing
labour, environment, anti-corruption and human rights, we
demonstrated leadership by maintaining our LEAD company
status, participating in UNGC SDG Action Platforms: Health is
Everyone’s Business; Decent Work in Global Supply Chains;
Peace, Justice and Strong Institutions; and Water Security through
Stewardship. We serve on the boards of the UNGC networks in the
UK and Netherlands. We produce an annual Communication on
Progress report, required of signatories annually, where we
attained the Advanced Level.
Globally, in 2018, RELX paid £415m in corporate taxes. We are a
responsible corporate taxpayer and conduct our tax affairs to
ensure compliance with all laws and relevant regulations in the
countries in which we operate. Tax is an important issue for our
stakeholders and society at large. We have set out our approach to
tax in our global tax strategy. This incorporates our Tax Principles
along with additional disclosures around where we pay taxes and
our broader contribution to society, available on our corporate
website: www.relx.com/go/TaxPrinciples.
In the year, the RELX Tax team continued to engage with a range
of policy makers and special interest groups to share practical
experience of corporate engagement on tax laws and the ways
such laws can advance government policy objectives. In the year,
we also scoped projects on the rule of tax law both in the United
Kingdom and South Africa.
The Statement of Investment Principles for the RELX UK pension
scheme indicates that social, environmental or ethical issues that
may have a financial impact on the portfolio or a detrimental effect
on the strength of the employer covenant, are taken into account
when making investment decisions. CR issues are relevant to
other investment decisions we make. Among our sustainable
investments is Agworld, a farm management software platform
that allows farmers, agronomists and agricultural contractors to
capture, manage and share on-farm data and recommendations
to improve land management sustainability and increase yields.
2018 OBJECTIVES Achievement
Expand corporate
security incident response
preparedness using a
combination of technology,
awareness training and
simulations
Business unit simulation training
and response plan
enhancements; updates to RELX
Board
PwC Building Public Trust Award
for Cyber Security Reporting in
the FTSE 350
Establish risk mitigation
framework for monitoring
operational effectiveness
of key internal compliance
controls
Completed enterprise-wide legal
compliance risk assessment,
identifying key risks and
mitigation controls
Executed 2018 Compliance
Testing and Monitoring Plan
including completing quality
assurance reviews of GDPR
compliance and intermediary
due diligence
Engagement on rule of
tax law
RELX Tax and LexisNexis Legal &
Professional South Africa
collaboration on tax law
codification in Africa
Supported Tax Aid and Tax Help
for Older People, who provide
free tax advice for low-income
and other beneficiaries
2019 OBJECTIVES
Continue corporate security incident response
preparedness; expand ISO 27001 data protection
compliance certification
New Culture of Compliance manager communications,
training and resources
Advance work on African tax law codification project
OUR 2030 VISION
Continued progressive actions that advance excellence in
corporate governance within our business and the marketplace
46 RELX Annual report and financial statements 2018 | Business review
3. People
Our over 30,000 people are our strength. Our workforce is 51%
female and 49% male, with an average length of service of 9.2 years.
There were 42% female and 58% male managers, and 28% female
and 72% male senior operational managers.
Female Male
Board of Directors 4 36% 7 64%
Senior operational
managers*
99 28% 258 72%
All employees** 16,400 51% 15,700 49%
* Senior operational managers are defined as those managers up to and including
three reporting lines from the CEO with a role in planning, directing or controlling
the activities of the company.
** Full-time equivalent.
At year end 2018, women made up 36% of the members of the
Board. The two Executive Directors on the Board are male. The
Nominations Committee considers the knowledge, experience
and background of individual Board directors.
Our Diversity and Inclusion (D&I) Statement articulates
our commitment to a diverse workforce and an environment
that respects individuals and their contributions, regardless
of gender, race or other characteristics. We updated our D&I
Strategy to include nine progress indicators including pursuing
best practice in candidate assessment to prevent unconscious
bias in recruiting processes and ensuring positive gender
portrayal in our marketing.
We maintain a D&I Advisory Group composed of a senior business
and HR leader from each business unit, supported by a broader
D&I Working Group with more than 150 participants. In 2018, our
Employee Resource Groups grew to over 40 networks, such as
women’s forums and pride groups, to facilitate support,
mentoring and community involvement. We held our first-ever
Diversity Awareness Month with a competition open to all
employees in order to showcase commitment to D&I across RELX
and a video with testimonials from senior leaders on why D&I
matters to them.
RELX is a signatory to the Women’s Empowerment Principles,
a UNGC and UN Women initiative to help companies empower
women and promote gender equality. In 2018, we became a
member of the Business in the Community Gender Campaign.
We comply with employee-related reporting requirements and, in
2018, we published our first UK gender pay gap data as part of the
UK legislation. At RELX we commit to raising awareness and
educate our employees on pay principles and equal pay. We invest
in research to identify causes of pay differences and regularly
evaluate our policies and processes to ensure they are aligned to
our D&I vision. We commit to building a robust framework for
monitoring pay equity across the enterprise. We have formally
made these pledges to the Equal Pay International Coalition UN
General Assembly week in New York.
Our employees have the right to a healthy and safe workplace,
as outlined in our Global Health and Safety Policy. We concentrate
on areas of greatest risk for example, warehouses, events and
exhibitions. As a primarily office-based company, we also focus
on manual handling, slips, trips and falls. To reduce our severity
rate (lost days per 200,000 hours worked), we conduct risk
assessments and work with a third party in the US to assign a
nurse case manager to each complex or severe claim. There
were 8 lost time incidents in the year.
In the US, where we have the largest concentration of employees,
our programmes promote workplace wellbeing through health
screenings, online assessments, stress awareness training and
smoking cessation courses, with financial incentives for
participation.
Dedicated health and wellbeing programmes are now available
to more than 70% of our employees. We also maintain a network
of more than 90 Wellness Champions. We provide a workplace
wellbeing award scheme which allows all employees, in
partnership with their local Wellbeing Champion, to submit a
proposal for a wellbeing initiative at their location. The proposals
are judged with the winning proposals granted funding. In the
year, we developed a partnership with Shaw Mind Foundation to
deliver a series of webinars to all staff on supporting mental
health at work.
2018 OBJECTIVES Achievement
Conduct a Global Employee
Opinion Survey including
questions on culture, ethics
and wellbeing
Survey conducted globally; 90%
response rate, highest to date
CEO review of results; cascaded to
business leaders – action plans in
development
Update D&I Strategy
including the launch of D&I
progress indicators
D&I Strategy approved by senior
leadership; nine priority actions
D&I governance updates
First global Diversity Awareness
Month
External partnership to
raise awareness of mental
health across RELX
Engagement with Shaw Mind
Foundation; webinar made
available to all employees
Research support for Foundation’s
mental health and the SDGs project
2019 OBJECTIVES
Progress UN Equal Pay International Coalition commitments
Establish a dashboard for D&I metrics
Develop mental health metrics and response plans
OUR 2030 VISION
Continued high-performing and satisfied workforce through
talent development, D&I and wellbeing; scale support for
external human capital initiatives
47
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate responsibility
The free RELX SDG Resource Centre
(sdgresources.relx.com) advances
awareness, understanding and
implementation of the 17 UN SDGs which
aim to end poverty, protect the planet and
ensure prosperity for all people by 2030.
The site provides leading edge articles,
reports, tools, events, videos and legal
practical guidance from across RELX.
It also features content from partners,
including the UNGC and the United Nations
Development Programme.
In 2018, we released original research on the
state of science underpinning SDG 3 (good
health and well-being) and added content from
Scientific African. This is a partnership
between the Next Einstein Forum and Elsevier,
bringing state-of-the-art technology and
processes to create an open access
megajournal to accelerate scientific
capacity-building across Africa.
Scientific African will provide African
researchers with a new platform to boost the
impact and discoverability of their research.
Also in the year, we held two RELX SDG
Inspiration Days to showcase the SDG
Resource Centre and the importance of
knowledge to advance the SDGs bringing
together more than 100 business colleagues,
government representatives, NGO leaders,
and young people.
RELX SDG Inspiration Day Silicon Valley
focused on disruptive technology to advance
the SDGs and SDG Inspiration Day Amsterdam
concentrated on The Power of Partnerships to
advance the SDGs: what partners, what
responsibilities, what innovation, and how to
scale and measure impact. Partners on the
events included the UNGC, the Ban Ki-Moon
Centre for Global Citizens and the Responsible
Media Forum.
The RELX SDG Resource Centre
was an essential tool for the women
entrepreneurs who took part in the
We Empower UN SDG Challenge
for women from around the world
supporting the SDGs through their
businesses who are helping to create
the world we want by 2030.
Amanda Ellis
Former New Zealand Ambassador to
the United Nations in Geneva, Senior
Special Adviser for International
Diplomacy and the SDGs at the
Julie Ann Wrigley Global Institute
of Sustainability
75,000+
sources in the
RELX SDG Resource
Centre’s SDG
News Tracker for
up-to-the-minute
news on the SDGs
from around
the world
Advancing the RELX SDG
Resource Centre
Access to critical knowledge
to advance the United Nations
Sustainable Development Goals
The RELX SDG Resource
Centre advances awareness,
understanding and
implementation of the
17 global goals
48 RELX Annual report and financial statements 2018 | Business review
4. Customers
In 2018, we surveyed more than 533,000 customers through
Net Promoter Score (measuring customer advocacy) and
business dashboard programmes. This allows us to deepen our
understanding of customer needs and drives improvements.
Results are reviewed by the CEO and senior operational
managers and communicated to staff.
In the year, we updated our Editorial Policy to incorporate respect
for human rights and to encourage pluralism of sources, ideas
and participants. We strengthened the privacy provision, added
in responsible use of artificial intelligence and our commitment
to transparency. We are developing training to help colleagues
understand the Editorial Policy in action.
The RELX Quality First Principles Working Group focuses on
quality in content, data and business processes. In 2018, our
operations in the Philippines won the Philippine Quality Award –
Proficiency in Quality Management (Level 2), the highest national
quality award in the Philippines for businesses demonstrating
excellence in managing and delivering quality.
We are committed to improving access to our products and
services for all users, regardless of physical ability. Our
Accessibility Policy aims to lead the industry in providing
accessibility solutions to customers, with products that are
operable, understandable and robust. In 2018, members of the
Accessibility Working Group logged over 200 accessibility projects
and Elsevier’s Global Books Digital Archive fulfilled more than
5,000 disability requests, 84% of them through AccessText.org,
a service we helped establish.
In 2018, we launched the first RELX Accessibility Awards to
showcase how accessibility ensures more accessible products
and services and a better user experience for all our customers,
including people with disabilities. Among the winners were
two colleagues from LexisNexis Risk Solutions who created a
computer-automated, web accessibility code scanner that checks
product code against the leading international accessibility
standard: Section 508/WCAG 2.0AA.
For the first time, in 2018, Forbes named RELX as one of the
World’s Most Innovative Companies, one of only 20 European
companies to place among the top 100.
2018 OBJECTIVES Achievement
RELX Editorial Policy
update and training
RELX Editorial Policy Working
Group, internal and external
stakeholders, contribute to
updated Policy
RELX Editorial Policy in Action
training in development
New CR as a Sales Tool
curriculum: Customers
and the SDGs
CR as a Sales Tool Working Group
demos
Outreach to business unit sales
directors and employees from
newly acquired companies
Recommendation to include the
RELX SDG Resource Centre in
client materials
Introduce RELX
Accessibility awards to
recognise exceptional
employee efforts to
advance accessibility
Winners chosen for the first
Accessibility Leadership Award
and Practioners Award
All-employee communications
2019 OBJECTIVES
Roll out new Editorial Policy
Expand online content for CR as a Sales Tool
Develop Accessibility Advisory Board
OUR 2030 VISION
Continue to expand customer base across our four business
units through excellence in products and services, the result
of active listening and engagement, editorial and quality
standards, and accessibility; a recognised advocate for ethical
marketplace practice
5. Community
RE Cares, our global community programme, supports employee
volunteering and giving that makes a positive impact on society.
In addition to local initiatives of importance to employees, the
programme’s core focus is on education for disadvantaged young
people that advances one or more of our unique contributions as
a business. Staff have up to two days’ paid leave per year for their
own community work. We donated £3.7m in cash (including
through matching gifts) and the equivalent of £13.9m in products,
services and staff time in 2018. 42% of employees were engaged
in volunteering through RE Cares and we reached 25,000
disadvantaged young people through time, in-kind and cash
donations. A network of 215 RE Cares Champions ensures the
vibrancy of our community engagement.
49
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate responsibility
5. Community (continued)
Each September, we hold RE Cares Month to celebrate our
community commitment. During the Month, we raised funds
($159,949 to date) to help global fundraising partner, SOS
Children’s Villages, enable girls working in dangerous conditions in
Yamoussoukro, Côte d’Ivoire to pursue an education. By the close
of 2018, 50 girls were in school or receiving vocational training.
Participants also received child rights training, with companion
sessions for parents to help them safeguard their children’s
rights. An awareness campaign involving parents and local
leaders was conducted in collaboration with three community
level committees, where girls involved in the project spoke out
about the dangers of child labour based on their own experience.
We held our annual global book drive, yielding 7,200 books for
local and developing world readers and announced the winners
of the eighth Recognising Those Who Care Awards to highlight the
exceptional contributions to RE Cares of ten individuals and three
RE Cares teams. Individual winners from across the business
travelled to RELX-supported projects in Phnom Penh, Cambodia
with VOICE (www.voice.org.au/), a humanitarian organisation
working with people in crisis in Cambodia.
2018 OBJECTIVES Achievement
Foster development of
youth employability skills
Focus of RE Cares, RELX global
community programme, in 2018
Partnerships with charities
focused on youth employability
skills
$300,000 seed funding, over
three years, through the Elsevier
Foundation for Imperial College
London’s Invention Rooms
Research impact of RE
Cares on staff retention
Study of 9,000 employees showed
positive correlation between
volunteering and tenure, with
reduced attrition
Average tenure: 10 years for
volunteers vs 7 years RELX
average
2019 OBJECTIVES
New RELX global fundraising partnership
Create guidance for calculating pro bono contributions
OUR 2030 VISION
Through our unique contributions, significant, measurable
advancement of education for disadvantaged young people;
investments with partners for maximum impact
6. Supply chain
Given the importance of maintaining an ethical supply chain,
we have a Socially Responsible Supplier (SRS) programme
encompassing all our businesses, supported by colleagues with
expertise in operations, distribution and procurement and a
dedicated SRS Director from our global procurement function.
We have a comprehensive Supplier Code of Conduct (Supplier
Code), available in 16 languages, which we ask suppliers to sign
and display prominently in the workplace. It commits them to
following applicable laws and best practice in areas such as
human rights, labour and the environment. We ask suppliers
to require the same standards in their supply chains, including
requesting subcontractors to enter into a written commitment to
uphold the Supplier Code. The Supplier Code states that where
local industry standards are higher than applicable legal
requirements, we expect suppliers to meet the higher standards.
Through our SRS database, we track key suppliers and those
located in medium and high-risk countries as designated by our
supplier risk tool. This incorporates eight indicators, including
human trafficking information from the US State Department and
Environmental Performance Index results produced by Yale
University and partners. The tracking list changes year-on-year
based on the suppliers we engage to meet the needs of our
business. We ended 2018 with 89% of suppliers on the SRS
tracking list as signatories to the Supplier Code. We have
embedded the Supplier Code into our sourcing process as a
criterion for doing business with us and have a total of 3,082
suppliers who have agreed to the Supplier Code in 2018, up from
2,937 in 2017.
We engage a specialist supply chain auditor who undertook
84 external audits on our behalf in 2018. An incidence of
non-compliance triggers continuous improvement reports
summarising audit results, with remediation plans and
submission dates agreed and signed by both the auditor
and supplier.
The roll-out of our US Supplier D&I programme continued in 2018
with efforts to improve the mix of diverse suppliers, with a focus on
minority-, woman- and veteran-owned businesses. In total, 11%
of US spend was with diverse suppliers. Among them was SHI
International. SHI is both a minority-owned and woman-owned
enterprise and provider of IT products and services. Their
Diversity Business Development Initiative builds and maintains
a community of diverse suppliers and partners. They continue to
grow an effective Tier II program by accessing their Services
Partner database utilising certified HUBZone, minority-, woman-,
veteran-and small disadvantaged-owned businesses.
2018 OBJECTIVES Achievement
Increase number of
suppliers as Code
signatories
3,082 (2017: 2,937)
Continue using audits
to ensure continuous
improvement in supplier
performance and
compliance
84 audits completed, including
six 2nd tier audits
34% reduction since 2017 in open
audit findings
Continue to advance
the US Supplier D&I
programme
Proactive engagement with
diverse suppliers with a focus on
minority-, women- and
veteran-owned businesses
11% diversity spend; increases in
spend with veteran- and
minority-owned businesses
50 RELX Annual report and financial statements 2018 | Business review
2019 OBJECTIVES
Increase the number of suppliers as Code signatories
Continue using audits to ensure continuous improvement
in supplier performance and compliance
Continue to advance US Supplier D&I programme
OUR 2030 VISION
Reduce supply chain risks related to human rights, labour, the
environment and anti-bribery by ensuring adherence to our
Supplier Code of Conduct through training, auditing and
remediation; drive supply chain innovation, quality and
efficiencies through a strong, diverse network of suppliers
7. Environment
Our environmental targets reflect our environmental impacts and
were set following input from stakeholders. Targets are set using
the science-based target methodology and include a commitment
to certify 50% of the business against the ISO 14001 Environmental
Management System standard by 2020. In 2018, we purchased
81% of our electricity from renewable energy and Renewable
Energy Certificates. Full performance data can be found in the
2018 Corporate Responsibility Report (www.relx.com/go/
crreport). We attained an A in CDP’s Climate Change programme.
In 2018, RELX was one of 11 businesses which partnered with
the Mayor of London on ambitious projects to cut pollution and
emissions in excess of UK government thresholds.
Our Environmental Champions network, employee-led Green
Teams and networks, such as the Publishers’ Database for
Responsible Environmental Paper Sourcing, also provided
significant insight into managing our environmental impacts.
Our Environmental Standards programme sets benchmark
performance and inspires green competition between offices.
In 2018, 36 sites (41% of key locations) achieved five or more
standards and attained green status. The RELX CFO, our most
senior environmental champion, wrote to all staff on World
Environment Day, sharing our environmental priorities and
recognising environmental achievements across the business.
We have a positive environmental impact through our
environmental products and services, which spread good
practice, encourage debate and aid researchers and decision
makers. The most recent results from the independent Market
Analysis System show that our share of citations in environmental
science represented 42% of the total market and 63% in energy
and fuels.
The €50,000 winner of Elsevier’s 2018 Green and Sustainable
Chemistry Challenge was Prajwal Rabhindari, President of the
Research Institute for Bioscience & Biotechnology in Nepal. He
is creating a water-based leaf extract of the guava plant – which
possesses antioxidant and antibacterial properties – as a natural
alternative to fungicides and chemical preservatives to minimise
post-harvest food loss affecting smallholder farmers.
2018 OBJECTIVES Achievement
40% of locations to
achieve five or more RELX
Environmental Standards
41% achieved
Purchase renewable
electricity equal to 80% of
global consumption
Reached through purchase
of European green tariff, US
Green-e certified and Asian Gold
Power renewable energy
certificates
Achieve ISO 14001
Environmental
Management System
certification at three
additional locations
Certification achieved at
additional sites (Philadelphia,
Raleigh and Boca Raton)
Equivalent to 25% of employee
headcount
2019 OBJECTIVES
55% of locations to achieve five or more RELX Environmental
Standards
Purchase renewable electricity equal to 90% of global
consumption
Achieve ISO 14001 Environmental Management System
certification at three additional locations
OUR 2030 VISION
Further environmental knowledge and positive action through
our products and services and, accordingly, conduct our
business with the lowest environmental impact possible
2018 ENVIRONMENTAL PERFORMANCE
Absolute performance Intensity ratio
2018 Variance 2017 2018 Variance 2017
Scope 1 (direct
emissions) tCO
2
e
7,477 -9% 8,231 1.00 -11% 1.12
Scope 2
(location-based
emissions) tCO
2
e
74,279 -12% 84,590 9.91 -14% 11.50
Scope 2
(market-based
emissions) tCO
2
e
16,004 -27% 21,831 2.14 -28% 2.97
Total energy (MWh) 179,228 -4% 186,228 23.92 -6% 25.32
Water (m
3
) 332,490 -4% 344,918 44.38 -5% 46.90
Waste sent to
landfill (%)*
12% -1%pts 13% 0.09 -10% 0.10
Production
paper (t)
35,555 -3% 36,484 4.75 -4% 4.96
* From reporting locations. Intensity metric shows tonnes of waste sent to
landfill/£m revenue.
RELX Annual report and financial statements 2018 | Corporate responsibility 51
Overview Business review Financial review Governance Financial statements and other information
7. Environment (continued)
ENVIRONMENTAL TARGETS
2018
PerformanceFocus area Targets 2020
Climate change Reduce Scope 1 and 2 location-based carbon emissions by 40% against a 2010 baseline -49%
Energy Reduce energy and fuel consumption by 30% against a 2010 baseline -35%
Purchase renewable electricity equivalent to 100% of RELX’s global electricity consumption 81%
Waste Decrease total waste generated at reporting locations by 40% against a 2010 baseline -52%
90% of waste from reporting locations to be diverted from landfill 88%
Production paper*
100% of RELX production papers, graded in PREPS, to be rated as ‘known and responsible sources’
100%
Environmental
Management System
Achieve ISO 14001 certification for 50% of the business by 2020 25%
Reporting locations achieving five or more RELX Environmental Standards 41%
* All paper we graded in 2018 – 90% of total production stock – was graded 3 or 5 stars (known and responsible sources).
We have reported on all emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. We have included emissions
from all operating companies within the Group.
We have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) and the data has been assured by an independent third party, EY. Details on
methodology and the assurance statement can be viewed in the 2018 Corporate Responsibility Report at www.relx.com/go/CRReport.
2018 investor and other recognition
Constituent of the Ethibel
Sustainability Index
Included in
– Excellence Europe
– Excellence Global
CDP
– Climate programme score: A
– Forest programme score: B
– Water programme score: B-
EPA Green Power Leader
– Top 100
FTSE4Good Index
Included in
– FTSE4Good Global Index
– FTSE4Good UK Index
– FTSE4Good Europe Index
RE100
– Member
Dow Jones Sustainability
Index Europe
– Constituent
ISO 14001
– Certified
STOXX Global ESG
LeadersIndices
– Included
ECPI Indices
– Included
Forbes
– The World’s Most Innovative
Companies 2018
Oekom Corporate
Responsibility Rating
– Prime status
Philippine Quality Award
– Recipient
The full 2018 Corporate Responsibility Report is available at www.relx.com/go/CRReport
52 RELX Annual report and financial statements 2018 | Business review
5353
Business review
RELX Annual report and financial statements 2018
Financial
review
In this section
54 Chief Financial Officer’s report
60 Principal risks
Overview Governance Financial statements and other information
Financial review
54 RELX Annual report and financial statements 2018 | Financial review
Chief Financial Officer’s report
Comparative financial information in the following commentary
has been restated following the adoption of IFRS 9 – Financial
Instruments, IFRS 15 – Revenue from Contracts with Customers
and IFRS 16 – Leases. See note 1 to the consolidated financial
information on page 126 for further details.
Revenue
Underlying growth of revenue was 4%, with all four market
segments contributing to underlying growth. The underlying
growth rate reflects good growth in electronic and face-to-face
revenues, partially offset by continued print revenue declines.
Reported revenue, including the effects of exhibition cycling,
portfolio changes and currency movements, was £7,492m
(2017: £7,341m), up 2%.
Exhibition cycling effects increased revenue growth by 1%, and the
net impact of acquisitions and disposals reduced revenue growth
by 1%. The impact of currency movements was to decrease
revenue by 2%, principally due to the US dollar being weaker
against sterling on average during 2018.
Profit
Underlying adjusted operating profit grew ahead of revenue at 6%,
reflecting the benefit of tight cost control across the Group.
The net impact of acquisitions and disposals decreased adjusted
operating profit by 2%. Currency effects decreased adjusted
operating profit by 1%.
Total adjusted operating profit, including the impact of acquisitions
and disposals and currency effects, was £2,346m (2017: £2,284m),
up 3%.
Underlying operating cost growth was 4%, reflecting investment
in global technology platforms and the launch of new products
and services, partly offset by continued process innovation.
Actions continue to be taken across our businesses to improve
cost-efficiency. Total operating costs, including the impact of
acquisitions, disposals and currency effects, increased by 2%.
The overall adjusted operating margin of 31.3% was 0.2
percentage points higher than in the prior year. On an underlying
basis, including cycling effects, the margin improved by 0.4
percentage points. Acquisitions and disposals reduced the margin
by 0.5 percentage points and currency effects increased the
margin by 0.3 percentage points.
Nick Luff
Chief Financial Officer
Underlying revenue and adjusted
operating profit growth in 2018
were 4% and 6% respectively,
and adjusted earnings per share
grew at 7% at constant currency,
maintaining the financial
performance trends seen in 2017.
Our balance sheet remains strong,
with Return on Invested Capital of
13.2% and we have maintained
leverage at an appropriate level.
REVENUE
20182015 20172016
5,773
5,971
7,341
†
7,492
2014
£m
6,889
†
ADJUSTED OPERATING PROFIT
20182015 20172016
1,739
1,822
2,114
†
2,346
2,284
†
2014
£m
† Restated for adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16.
Overview Business review Financial review Governance Financial statements and other information
55RELX Annual report and financial statements 2018 | Chief Financial Officer’s report
2018
£m
Restated
2017
£m Change
Change
at constant
currencies
Change
underlying
Reported figures
Revenue 7,492 7,341 +2% +4% +4%
Operating profit 1,964 1,905 +3%
Profit before tax 1,720 1,721 0%
Net profit attributable to RELX PLC shareholders 1,422 1,648 -14%
Net margin 19.0% 22.4%
Net borrowings 6,177 5,042
Earnings per share 71.9p 81.6p -12%
Adjusted figures
Operating profit 2,346 2,284 +3% +4% +6%
Operating margin 31.3% 31.1%
Profit before tax 2,145 2,101 +2%
Net profit attributable to RELX PLC shareholders 1,674 1,620 +3%
Net margin 22.3% 22.1%
Cash flow 2,243 2,197 +2%
Cash flow conversion 96% 96%
Return on invested capital 13.2% 12.9%
Earnings per share 84.7p 80.2p +6% +7%
RELX uses adjusted and underlying figures as additional performance measures. Adjusted figures primarily exclude the amortisation of acquired intangible assets and
other items related to acquisitions and disposals, and the associated deferred tax movements. In 2018 and 2017, we also excluded exceptional tax credits, see note 9 on
page 138. Reconciliations between the reported and adjusted figures are set out on page 176. Underlying growth rates are calculated at constant currencies, excluding the
results of acquisitions until twelve months after purchase, and excluding the results of disposals and assets held for sale. Underlying revenue growth rates also exclude
exhibition cycling. Constant currency growth rates are based on 2017 full-year average and hedge exchange rates.
Reported operating profit, after amortisation of acquired
intangible assets and acquisition-related costs, was £1,964m
(2017: £1,905m).
The amortisation charge in respect of acquired intangible assets,
including the share of amortisation in joint ventures, decreased
to £288m (2017: £314m), the reduction primarily reflects certain
assets becoming fully amortised. Acquisition-related costs were
£84m (2017: £56m), higher than the prior year as a result of
increased transaction activity.
Adjusted interest expense, excluding the net pension financing
charge of £9m (2017: £15m) and including finance income in joint
ventures of £1m (2017: £1m), was £201m (2017: £183m). The
increase primarily reflects a higher level of borrowings in 2018,
partly offset by currency translation effects.
Reported net finance costs were £211m (2017: £199m).
Net pre-tax disposal losses were £33m (2017: £15m gain) arising
largely from the write down of Legal businesses classified as held
for sale and revaluation of investments held. These losses are
offset by an associated tax credit of £14m (2017: £16m charge).
Adjusted profit before tax was £2,145m (2017: £2,101m), up 2%.
The reported profit before tax was £1,720m (2017: £1,721m).
The adjusted effective tax rate on adjusted profit before tax was
21.7%, 0.8 percentage points lower than the prior year rate of
22.5%. The adjusted effective tax rate excludes movements in
deferred taxation assets and liabilities related to goodwill and
acquired intangible assets, but includes the benefit of tax
amortisation where available on those items. Adjusted operating
profits and taxation are grossed up for the equity share of taxes
in joint ventures. The application of tax law and practice is subject
to some uncertainty and amounts are provided in respect of this.
ADJUSTED OPERATING PROFIT MARGIN
20182015 20172016
30.1%
30.5%
31.1%
†
31.3%
30.7%
†
2014
ADJUSTED CASH FLOW CONVERSION
20182015 20172016
96%
94%
96%
†
96%
†
96%
2014
† Restated for adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16.
56 RELX Annual report and financial statements 2018 | Financial review
Discussions with tax authorities relating to cross-border
transactions and other matters are ongoing. Although the
outcome of open items cannot be predicted, no significant impact
on profitability is expected.
The reported tax charge was £292m (2017: £65m). The 2017 tax
charge included a one-off £346m credit in relation to the US Tax
Cuts and Jobs Act. The year-on-year impact of this credit is
partially offset by the recognition of a £112m exceptional tax credit
in 2018 as a result of the substantial resolution of certain prior year
tax matters during the year and the deferred tax effect of tax rate
reductions in the Netherlands and the US. On the basis of their size
and non-recurring nature these tax credits have been treated as
exceptional items and excluded from the adjusted tax charge.
The adjusted net profit attributable to RELX PLC shareholders of
£1,674m (2017: £1,620m) was up 3%. Adjusted earnings per share
was up 6% at 84.7p (2017: 80.2p). At constant rates of exchange,
adjusted earnings per share increased by 7%.
The reported net profit attributable to RELX PLC shareholders
was £1,422m (2017: £1,648m).
Cash flows
Adjusted cash flow was £2,243m (2017: £2,197m), up 2% compared
with the prior year and up 3% at constant currencies. As a result of
the adoption of IFRS 16, adjusted cash flow includes the principal
element of lease repayments. The rate of conversion of adjusted
operating profit to adjusted cash flow was 96% (2017: 96%).
CONVERSION OF ADJUSTED OPERATING PROFIT INTO CASH
YEAR TO 31 DECEMBER
2018
£m
Restated
2017
£m
Adjusted operating profit 2,346 2,284
Depreciation and amortisation of internally
developed intangible assets 287 268
Depreciation of right-of-use assets 77 75
Capital expenditure (362) (354)
Repayment of lease principal (net)* (81) (76)
Working capital and other items (24) –
Adjusted cash flow 2,243 2,197
Adjusted cash flow conversion 96% 96%
* Excludes repayments and receipts in respect of disposal-related vacant property
and is net of sublease receipts.
Capital expenditure was £362m (2017: £354m), including
£306m (2017: £303m) in respect of capitalised development costs.
This reflects sustained investment in new products and related
infrastructure across the business. Depreciation and the
amortisation of internally developed intangible assets was £287m
(2017: £268m). Capital expenditure was 4.8% of revenue
(2017: 4.8%). Depreciation and amortisation was 3.8% of revenue
(2017: 3.7%). These percentages exclude depreciation of leased
right-of-use assets of £77m (2017: £75m) and principal lease
repayments under IFRS 16 of £81m (2017: £76m).
Tax paid, excluding tax relief on acquisition-related costs and
disposals, of £428m (2017: £472m) decreased due to the timing of
payments and movements in exchange rates. Interest paid was
£155m (2017: £163m).
Payments made in respect of acquisition-related costs amounted
to £77m (2017: £42m).
Free cash flow before dividends was £1,593m (2017: £1,534m).
Ordinary dividends paid to shareholders in the year, being the
2017 final and 2018 interim dividends, amounted to £796m (2017:
£762m). Free cash flow after dividends was £797m (2017: £772m).
RECONCILIATION OF CASH GENERATED FROM OPERATIONS
TO ADJUSTED CASH FLOW
YEAR TO 31 DECEMBER
2018
£m
Restated
2017
£m
Cash generated from operations 2,555 2,526
Dividends received from joint ventures 30 38
Purchases of property, plant and
equipment (56) (51)
Expenditure on internally developed
intangible assets (306) (303)
Payments in relation to acquisition-
related costs/other 97 62
Repayment of lease principal (81) (76)
Proceeds from disposals of property,
plant and equipment 4 1
Adjusted cash flow
2,243 2,197
FREE CASH FLOW
YEAR TO 31 DECEMBER
2018
£m
Restated
2017
£m
Adjusted cash flow 2,243 2,197
Interest paid (net) (155) (163)
Tax paid (428) (472)
Acquisition-related costs* (67) (28)
Free cash flow before dividends 1,593 1,534
Ordinary dividends (796) (762)
Free cash flow post dividends 797 772
* Including cash tax relief.
Total consideration on acquisitions completed in the year was
£978m (2017: £123m). Cash spent on acquisitions was £960m
(2017: £141m), including deferred consideration of £16m (2017:
£13m) on past acquisitions and spend on venture capital
investments of £13m (2017: £10m).
Total consideration for the disposal of non-strategic assets
in 2018 was £45m (2017: £87m). Net cash inflow after timing
differences and separation and transaction costs was £5m
(2017: £41m inflow).
Share repurchases in 2018 were £700m (2017: £700m), with a
further £100m repurchased in 2019 as at 20 February. In addition,
the Employee Benefit Trust purchased shares of RELX PLC to
meet future obligations in respect of share based remuneration
totalling £43m (2017: £39m). Proceeds from the exercise of share
options were £21m (2017: £32m).
Overview Business review Financial review Governance Financial statements and other information
57RELX Annual report and financial statements 2018 | Chief Financial Officer’s report
RECONCILIATION OF NET DEBT YEAR-ON-YEAR
YEAR TO 31 DECEMBER
2018
£m
Restated
2017
£m
Net debt at 1 January (5,042) (5,050)
Free cash flow post dividends 797 772
Net disposal proceeds 5 41
Acquisition cash spend (including
borrowings in acquired businesses)
(960) (141)
Share repurchases (700) (700)
Purchase of shares by the Employee
Benefit Trust (43) (39)
Other* 12 34
Currency translation (246) 41
Movement in net debt (1,135) 8
Net debt at 31 December (6,177) (5,042)
* Cash tax relief on disposals, distributions to non-controlling interests, pension
deficit payments, leases and share option exercise proceeds.
Funding
Debt
Net borrowings at 31 December 2018 were £6,177m, an
increase of £1,135m since 31 December 2017. The majority of our
borrowings are denominated in US dollars and euros, and sterling
being weaker at the end of the year contributed to higher net
borrowings when translated into sterling. Excluding currency
translation effects, net borrowings increased by £889m.
Expressed in US dollars, net borrowings at 31 December 2018
were $7,874m, an increase of $1,055m.
Gross borrowings of £6,365m (31 December 2017: £5,253m) are
comprised of bank and bond borrowings of £6,005m (31 December
2017: £4,862m) and lease liabilities under IFRS 16 of £360m
(31 December 2017: £391m). The fair value of related derivative
net assets was £25m (31 December 2017: £43m), finance lease
receivables totalled £49m (31 December 2017: £57m) and cash
and cash equivalents totalled £114m (31 December 2017: £111m).
In aggregate, these give the net borrowings figure of £6,177m
(31 December 2017: £5,042m).
The effective interest rate on gross bank and bond borrowings was
3.2% in 2018, in line with the prior year. This reflects increases in
market interest rates offset by the benefit of refinancing historical
bonds that had higher rates of interest. As at 31 December 2018,
gross bank and bond borrowings had a weighted average life
remaining of 4.1 years and a total of 45% of them were at fixed
rates, after taking into account interest rate derivatives.
The ratio of net debt (including leases and pensions) to 12-month
trailing EBITDA (adjusted earnings before interest, tax, depreciation
and amortisation) was 2.4x (31 December 2017: 2.2x), calculated in
US dollars. Excluding leases and pensions, the ratio was 2.2x (31
December 2017: 1.9x).
Liquidity
During July 2018, the Group’s $2.0bn undrawn committed bank
facility, maturing in July 2020, was cancelled and replaced with a
new $3.0bn facility, consisting of a $1.75bn tranche maturing in
July 2023 and a $1.25bn tranche maturing in July 2021. This facility
provides security of funding for short-term debt.
In March 2018, $700m of dollar denominated fixed rate term debt
was issued with a coupon of 3.5% and a maturity of five years, and
€500m of euro denominated fixed rate term debt was issued with
a coupon of 1.5% and a maturity of nine years. The Group has
ample liquidity and access to debt capital markets, providing the
ability to repay or refinance borrowings as they mature and to fund
ongoing requirements.
Invested capital and returns
Net capital employed was £9,435m at 31 December 2018 (2017:
£8,241m), an increase of £1,194m. The carrying value of goodwill
and acquired intangible assets increased by £1,193m, reflecting
increased acquisition spend in 2018 and the strengthening of the
dollar against sterling from the beginning to the end of 2018. An
amount of £423m was capitalised in the year in respect of acquired
intangible assets and £626m was recorded as goodwill.
RETURN ON INVESTED CAPITAL
20182015 20172016
12.8%
12.7%
13.0%
12.9%
†
13.2%
2014
† Restated for adoption of new accounting standards IFRS 9, IFRS 15 and IFRS 16.
RELX TERM DEBT MATURITIES AT 31 DECEMBER 2018
993
850
573
819
859
773
7
783
630
573
2019 2020 2021 2022 2023 2024 2025 2026 >20272027
$m
Term debt translated at 31 December 2018 exchange rates, stated at par value
58 RELX Annual report and financial statements 2018 | Financial review
SUMMARY BALANCE SHEET
AS AT 31 DECEMBER
2018
£m
Restated
2017
£m
Goodwill and acquired intangible assets* 9,216 8,023
Internally developed intangible assets* 1,217 1,136
Property, plant and equipment*,
right-of-use assets* and investments 716 724
Net assets held for sale (3) –
Net pension obligations (433) (328)
Working capital (1,278) (1,314)
Net capital employed 9,435 8,241
* Net of accumulated depreciation and amortisation.
Development costs of £304m (2017: £304m) were capitalised
within internally developed intangible assets, most notably
investment in new products and related infrastructure in the
Legal and Scientific, Technical & Medical businesses.
Net pension obligations, i.e. pension obligations less pension
assets, increased to £433m (2017: £328m). There was a net
deficit of £203m (2017: £89m) in respect of funded schemes,
which were on average 96% funded at the end of the year on
an IFRS basis. The higher deficit mainly reflects weaker asset
performance in the UK scheme. An £11m past service cost
was recognised in the UK in relation to GMP equalisation.
The post-tax return on average invested capital in the year
was 13.2% (2017: 12.9%).
RETURN ON INVESTED CAPITAL
AS AT 31 DECEMBER
2018
£m
Restated
2017
£m
Adjusted operating profit 2,346 2,284
Tax at effective rate 509 514
Effective tax rate 21.7% 22.5%
Adjusted operating profit after tax 1,837 1,770
Average invested capital* 13,924 13,733
Return on invested capital 13.2% 12.9%
* Average of invested capital at the beginning and the end of the year, retranslated
at average exchange rates for the year. Invested capital is calculated as net capital
employed, adjusted to add back accumulated amortisation, impairment of acquired
intangible assets and goodwill and to exclude the gross up to goodwill in respect of
deferred tax.
Reported earnings per share and dividends
2018
£m
Restated
2017
£m Change
Reported earnings per share 71.9p 81.6p -12%
Ordinary dividend per share 42.1p 39.4p 7%
The reported earnings per share was 71.9p (2017: 81.6p). The
decrease year-on-year reflects the impact of the exceptional tax
credit recognised in 2017 as a result of the US Tax Cuts and Jobs Act.
The final dividend proposed by the Board is 29.7p per share, 7%
higher than the dividend for the prior year. This gives total
dividends for the year of 42.1p (2017: 39.4p).
Dividend cover, based on adjusted earnings per share and the
total interim and proposed final dividends for the year, is 2.0x.
The dividend policy is, subject to currency considerations, to grow
dividends broadly in line with adjusted earnings per share while
maintaining dividend cover (being the number of times the annual
dividend is covered by the adjusted earnings per share) of at least
two times over the longer term.
On 8 September 2018, the corporate simplification was effective
and RELX NV shareholders received one new RELX PLC share in
exchange for each RELX NV share held. During 2018 a combined
total of 44.4m of RELX PLC and RELX NV shares were
repurchased (17.5m of these were repurchased by RELX NV prior
to the corporate simplification). Total consideration for these
repurchases was £700m. A further 2.9m shares were purchased
by the Employee Benefit Trust. During 2018, 45m RELX PLC
shares held in treasury were cancelled. As at 31 December 2018,
total shares in issue, net of shares held in treasury and shares
held by the Employee Benefit Trust, amounted to 1,962m. A further
6.0m RELX PLC shares have been repurchased in 2019 as at
20 February.
Distributable reserves
As at 31 December 2018, RELX PLC had distributable reserves
of £2.7bn. In line with UK legislation, distributable reserves are
derived from the non-consolidated RELX PLC balance sheet.
The consolidated reserves reflect adjustments such as
the amortisation of acquired intangible assets that are not
taken into account when calculating distributable reserves.
Further information on the distributable reserves can be found
in the parent company financial statements on page 171.
Alternative performance measures
RELX uses adjusted figures, which are not defined by generally
accepted accounting principles (‘GAAP’) such as IFRS. Adjusted
figures and underlying growth rates are presented as additional
performance measures used by management, as they provide
relevant information in assessing the Group’s performance,
position and cash flows. We believe that these measures enable
investors to 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, and by
excluding exceptional tax credits. This provides our investors with
a clear basis for assessing our ability to raise debt and invest in
new business opportunities.
Management uses these financial measures, along with IFRS
financial measures, in evaluating the operating performance
of the Group as a whole and of the individual business segments.
Adjusted financial measures should not be considered in isolation
from, or as a substitute for, financial information presented in
compliance with IFRS. The measures may not be directly
comparable to similarly reported measures by other companies.
Please see page 176 for reconciliations of adjusted measures.
The following changes to alternative performance measures have
been made for the 2018 year end:
The definition of adjusted cash flow was updated as a result of the
adoption of IFRS 16 to include the principal element of lease
repayments. This is consistent with the inclusion of capital
Overview Business review Financial review Governance Financial statements and other information
59RELX Annual report and financial statements 2018 | Chief Financial Officer’s report
expenditure in relation to property, plant and equipment in this
adjusted measure. Prior year comparatives have been restated
on page 176.
Underlying growth rates now include the results of acquisitions
starting twelve months after completion of a transaction.
This change, which has brought us into line with comparable
companies, had no impact on the 2018 underlying revenue
growth rates at either the divisional or Group level.
Accounting policies
The consolidated financial statements are prepared in accordance
with International Financial Reporting Standards as adopted by
the European Union and as issued by the International Accounting
Standards Board following the accounting policies shown in the
notes to the financial statements on pages 126 to 167. The
accounting policies and estimates which require the most
significant judgement relate to the valuation of goodwill and
intangible assets, the capitalisation of development costs,
taxation and accounting for defined benefit pension schemes.
Further detail is provided in the accounting policies on pages 126
to 128 and in the relevant notes to the accounts.
New accounting standards
RELX adopted IFRS 9, 15 and 16 from 1 January 2018. For IFRS 16
this is one year earlier than its mandatory adoption date. Please
see note 1 to the consolidated financial statements for further
details on the impact of these new standards.
Tax principles
Taxation is an important issue for us and our stakeholders,
including our shareholders, governments, customers, suppliers,
employees and the global communities in which we operate. We
have set out our approach to tax in our global tax strategy. This
incorporates our Tax Principles along with additional disclosures
around where we pay taxes and our broader contribution to
society. This is all made publicly available on our website:
www.relx.com/go/TaxPrinciples
We maintain an open dialogue with tax authorities, and are vigilant
in ensuring that we comply with current tax legislation. We have
clear and consistent tax policies and tax matters are dealt with
by a professional tax function, supported by external advisers. We
proactively seek to agree arm’s-length pricing with tax authorities
to mitigate tax risks of significant cross-border operations. We
actively engage with policy makers, tax administrators, industry
bodies and international institutions to provide informed input on
proposed tax measures, so that we and they can understand how
those proposals would affect our businesses. In addition, we
participate in consultations with the Organisation for Economic
Co-operation and Development (‘OECD’), European bodies and the
United Nations.
Treasury policies
The Board of RELX PLC agrees policies for managing treasury
risks. The key policies address security of funding requirements,
the target fixed/floating interest rate exposure for debt and foreign
currency hedging and place limits on counterparty exposures.
A more extensive summary of these policies is provided in note 18
to the financial statements on pages 150 to 155. Financial
instruments are used to finance the RELX businesses and to
hedge transactions. The Group’s businesses do not enter into
speculative transactions.
Capital and liquidity management
The capital structure is managed to support RELX’s objective of
maximising long-term shareholder value through appropriate
security of funding, ready access to debt and capital markets,
cost-effective borrowing and flexibility to fund business and
acquisition opportunities while maintaining appropriate leverage
to ensure an efficient capital structure.
Over the long-term, RELX seeks to maintain cash flow conversion
of 90% or higher and credit rating agency metrics that are
consistent with a solid investment grade credit rating. These
metrics as defined by the rating agencies include net debt to
EBITDA, including and excluding pensions and leases, and various
measures of cash flow as a percentage of net debt.
RELX uses the cash flow it generates to fund capital expenditure
required to drive organic growth, to make selective acquisitions
and to provide a growing dividend to shareholders, while retaining
balance sheet strength to maintain access to cost-effective
sources of borrowing. Share repurchases are undertaken to
maintain an efficient balance sheet. Further detail on capital and
liquidity management is provided on pages 150 and 151.
Corporate responsibility
Achieving our 2018 environmental objectives moves us closer to
meeting our 2015-2020 environmental targets. In the year, these
included reaching 42% of our locations (by employee headcount)
achieving five or more of our Group Environmental Standards,
which set environmental performance levels, and we purchased
renewable electricity equivalent to 81% of our global consumption
through a mixture of European green tariff, and green-e certified
US and Asian Gold Power renewable energy certificates. In
addition, 35% of our locations were covered by ISO 14001
environmental certification by year-end.
Our most significant environmental impact is in the scientific
knowledge and resources we provide that inform action and
debate. In 2018, this encompassed the Journal of Environmental
Management’s special issue on sustainable waste and wastewater
management and the Oceanology International North America
exhibition and conference which covers exploring, monitoring,
developing and protecting the world’s oceans.
Alongside managing supply chain costs, we concentrate on
ensuring an ethical supply chain. In 2018, we tracked 344 key
suppliers and lowered audit non-compliance findings with our
Supplier Code of Conduct by 34%. We also increased our spend
with veteran and minority owned business as part of on going
efforts to increase supplier diversity.
Nick Luff
Chief Financial Officer
60 RELX Annual report and financial statements 2018 | Financial review
Principal risks
RELX has established risk management practices that are
embedded into the operations of the businesses, based on the
Internal Control-Integrated Framework (2013) by the Committee
of Sponsoring Organisations of the Treadway Commission
(COSO). The principal risks facing the business, which have been
assessed by the Audit Committee and Board, are described
below. The Directors confirm this process is robust and includes
consideration of risks , including emerging risks, that could
threaten RELX’s business models, future performance, solvency,
liquidity or reputation
It is not possible to identify every risk that could affect our
businesses, and the actions taken to mitigate the risks described
below cannot provide absolute assurance that a risk will not
materialise and/or adversely affect our business or financial
performance. Our risk management and internal control
processes are described in the Corporate Governance section.
A description of the business and a discussion of factors affecting
performance is set out in the Chief Executive Officer’s report and
the Business Review. Treasury risks are further discussed in the
Chief Financial Officer’s report and in note 18 to the consolidated
financial statements. Our assessment of RELX’s prospects and
viability is on page 82. The Data Resources risk has been
expanded as a Data Resources and Data Privacy risk which
combines elements previously described in the Data Resources
and Cyber Security risks. Given RELX’s reduced exposure, net
of mitigation, to Environmental risk, this is no longer classified
as a Principal Risk. Our approach to managing corporate
responsibility, environmental and other non-financial risks
is set out in the Business Review and the separate Corporate
Responsibility Report.
EXTERNAL RISKS
Risk Description and impact Mitigation
Economy
andmarket
conditions
Demand for our products and services may be adversely
impacted by factors beyond our control, such as the
economic environment in the United States, Europe and
other major economies, political uncertainties (including the
potential consequences of the United Kingdom’s withdrawal
from the European Union under Article 50 of the Treaty of
Lisbon (“Brexit”)), acts of war and civil unrest as well as
levels of government and private funding provided to
academic and research institutions.
Our businesses are focused on professional markets which
have generally been more resilient in periods of economic
downturn. We deliver information solutions, many on
a subscription and recurring revenue basis, which are
important to our customers’ effectiveness and efficiency.
We operate diversified businesses in terms of sectors,
markets, customers, geographies and products and
services. We have extended our position in long-term global
growth markets through organic new launches supported
by the selective acquisition of small content and data sets.
We continue to dispose of businesses that no longer fit
our strategy.
We continuously monitor economic and political
developments to assess their impact on our strategy which
is designed to mitigate these risks. In response to specific
uncertainties, such as Brexit, our businesses engage
in scenario planning and develop contingency plans
where relevant.
Intellectual
property
rights
Our products and services include and utilise intellectual
property. We rely on trademark, copyright, patent and other
intellectual property laws to establish and protect our
proprietary rights in this intellectual property. There is a
risk that our proprietary rights could be challenged, limited,
invalidated or circumvented, which may impact demand
for and pricing of our products and services. Copyright
laws are subject to national legislative initiatives, as
well as cross border initiatives such as those from the
European Commission and increased judicial scrutiny
in several jurisdictions in which we operate. This creates
additional challenges for us in protecting our proprietary
rights in content delivered through the internet and
electronic platforms.
We actively engage in developing and promoting the legal
protection of intellectual property rights. Our subscription
contracts with customers contain provisions regarding the
use of proprietary content. We are vigilant as to the use of our
intellectual property and, as appropriate, take legal action
to challenge illegal content distribution sources.
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Principal risks 61
EXTERNAL RISKS
Risk Description and impact Mitigation
Data
resources
and data
privacy
Our businesses rely extensively upon content and data from
external sources. Data is obtained from public records,
governmental authorities, customers and other information
companies, including competitors. The disruption or loss of
data sources, either because of data privacy laws, 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, 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.
Compromise of data privacy, through a failure of our cyber
security measures (see “Cyber security” below), other data
loss incidents or failure to comply with requirements for
proper collection, storage and transmittal of data, by
ourselves or our third-party service providers, may damage
our reputation and expose us to risk of loss, fines and
penalties, litigation and increased regulation.
We seek as far as possible to have proprietary content.
Where content is supplied to us by third parties, we aim to
have contracts which provide mutual commercial benefit.
We also maintain an active dialogue with regulatory
authorities on privacy and other data related issues,
and promote, with others, the responsible use of data.
We have established data privacy principles, governance
structures and control programmes designed to ensure data
privacy requirements are met. We have put in place and test
response plans to manage incidents where data privacy
might be compromised. We embed our data privacy
principles in agreements with third parties.
We have assurance programmes to monitor compliance
and conduct training and awareness programmes.
Paid
subscriptions
Our Scientific, Technical & Medical (“STM”) primary research
content, like that of most of our competitors, is sold largely
on a paid subscription basis. There is continued debate in
government, academic and library communities, which are
the principal customers for our STM content, regarding to
what extent such content should be funded instead through
fees charged to authors or authors’ funders and/or made
freely available in some form after a period following
publication. Some of these methods, if widely adopted, could
adversely affect our revenue from paid subscriptions.
We engage extensively with stakeholders in the STM
community to better understand their needs and deliver
value to them. We are open to serving the STM community
under any payment model that can sustainably provide
researchers with the critical information tools that they
need. In particular, the number of articles we publish on an
author pays, open access basis is growing rapidly. We focus
on the integrity and quality of research through the editorial
and peer review process; we invest in efficient editorial and
distribution platforms and in innovation in platforms and
tools to make content and data more accessible and
actionable; and we develop our research systems to provide
capabilities to manage different payment models. We ensure
vigilance on plagiarism and the long-term preservation
of research findings.
STRATEGIC RISKS
Risk Description and impact Mitigation
Customer
acceptance
ofproducts
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 are focused on the needs and economics of our
customers. We leverage user centred design and
development methods and customer analytics and invest
in new and enhanced technologies to provide content and
innovative solutions that help them achieve better outcomes
and enhance productivity.
Market
Disruption
Our businesses operate in highly competitive and dynamic
markets, and the means of delivering our products and
services, and the products and services themselves,
continue to change in response to rapid technological
innovations, legislative and regulatory changes, the entrance
of new competitors and other factors. Failure to anticipate
and quickly adapt to these changes could impact the
competitiveness of our products and services and
consequently adversely affect our revenue.
We gain insights into our markets, evolving customers’
needs, the potential application of new technologies and
business models, and the actions of competitors and
disrupters. These insights inform our market strategies
and operational priorities. We continuously invest
significant resources in our products and services,
and the infrastructure to support them.
Acquisitions 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.
Acquisitions are made within the framework of our overall
strategy, which emphasises organic development. We have
a well formulated process for reviewing and executing
acquisitions and for managing the post-acquisition
integration. This process is underpinned with clear strategic,
financial and ethical criteria. We closely monitor the
integration and performance of acquisitions.
62 RELX Annual report and financial statements 2018 | Financial review
OPERATIONAL RISKS
Risk Description and impact Mitigation
Technology
and business
resilience
Our businesses are dependent on electronic platforms and
networks, primarily the internet, for delivery of our products
and services. These could be adversely affected if our
electronic delivery platforms, networks or supporting
infrastructure experience a significant failure, interruption
or security breach.
We have established procedures for the protection of our
businesses and technology assets. These include the
development and testing of business continuity plans,
including IT disaster recovery plans and back-up delivery
systems, to reduce business disruption in the event of major
technology or infrastructure failure, terrorism or adverse
weather incidents.
Cyber
security
Our businesses maintain online databases and platforms
delivering our products and services, which we rely on,
and provide data to third parties, including customers and
service providers. These databases and information are a
target for compromise and face a risk of unauthorised access
and use by unauthorised parties.
Our cyber security measures, and the measures used
by our third-party service providers, may not detect or
prevent all attempts to compromise our systems, which
may jeopardise the security of the data we maintain or
may disrupt our systems. Failures of our cyber security
measures could result in unauthorised access to our
systems, misappropriation of our or our users’ data, deletion
or modification of stored information or other interruption
to our business operations. As techniques used to obtain
unauthorised access to or to sabotage systems change
frequently and may not be known until launched against
us or our third-party service providers, we may be unable
to anticipate or implement adequate measures to protect
against these attacks and our service providers and
customers may likewise be unable to do so.
Compromises of our or our third-party service providers’
systems, or failure to comply with applicable legislation or
regulatory or contractual requirements could adversely
affect our financial performance, damage our reputation
and expose us to risk of loss, fines and penalties, litigation
and increased regulation.
We have established security programmes with the aim of
ensuring that data is protected, our business infrastructures
continue to operate and that we comply with relevant
legislative, regulatory and contractual requirements.
We have governance mechanisms in place to design and
monitor common policies and standards across our
businesses.
We invest in appropriate technological and physical controls
which are applied across the enterprise in a risk-based
security programme which operates at the infrastructure,
application and user levels. These controls include, but are
not limited to, infrastructure vulnerability management,
application scanning and penetration testing, network
segmentation, encryption and logging and monitoring.
We provide regular training and communication initiatives
to establish and maintain awareness of risks at all levels
of our businesses. We have appropriate incident response
plans to respond to threats and attacks. We maintain
appropriate information security policies and contractual
requirements for our businesses and run programmes
monitoring the application of our data security policies by
third-party service providers. We use independent internal
and third-party auditors to test, evaluate, and help enhance
our procedures and controls.
Supply Chain
dependencies
Our organisational and operational structures depend on
outsourced and offshored functions, including use of cloud
service providers. Poor performance, failure or breach of
third parties to whom we have outsourced activities, could
adversely affect our business performance, reputation and
financial condition.
We select our vendors with care and establish contractual
service levels that we closely monitor, including through
key performance indicators and targeted supplier audits
and security assessments. We have developed business
continuity plans to reduce disruption in the event of a major
failure by a vendor.
Talent The implementation and execution of our strategies
and business plans depend on our ability to recruit,
motivate and retain skilled employees and management.
We compete globally and across business sectors for
talented management and skilled individuals, particularly
those with technology and data analytics capabilities. An
inability to recruit, motivate or retain such people could
adversely affect our business performance. Failure to
recruit and develop talent regardless of gender, race or
other characteristics could adversely affect our reputation
and business performance.
We have well established management development and
talent review programmes. We monitor capability needs and
remuneration schemes are tailored to attract and motivate
the best talent available at an appropriate level of cost. We
actively seek feedback from employees, which feeds into
plans to enhance employee engagement and motivation.
Our Diversity and Inclusion Strategy creates a diverse
workforce and environment that respects individuals
and their contributions.
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Principal risks 63
FINANCIAL RISKS
Risk Description and impact Mitigation
Pensions 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.
We have professional management of our pension schemes
and we focus on maintaining appropriate asset allocation
and plan designs. We review our funding requirements
on a regular basis with the assistance of independent
actuaries and ensure that the funding plans are appropriate.
We seek to manage pension liabilities by reviewing pension
benefits provided to staff as well as the structure of
scheme arrangements.
Tax Our businesses operate globally, and our profits are subject
to taxation in many different jurisdictions and at differing tax
rates. The Organisation for Economic Co-operation and
Development (“OECD”)’s reports on Base Erosion and Profit
Shifting, suggested 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, tax
laws that currently apply to our businesses may be amended
by the relevant authorities or interpreted differently by them,
and these changes could adversely affect our reported results.
We maintain an open dialogue with tax authorities and
are vigilant in ensuring that we comply with current tax
legislation. We have clear and consistent tax policies and
tax matters are dealt with by a professional tax function,
supported by external advisers. As outlined in the Chief
Financial Officer’s report on page 59 we engage with tax
authorities and international organisations. The principles
we adopt in our approach to tax matters can be found on our
website at www.relx.com/go/taxprinciples.
Treasury The RELX consolidated financial statements are expressed
in pounds sterling and are subject to movements in exchange
rates on the translation of the financial information of
businesses whose operational currencies are other than
sterling. The United States is our most important market
and, accordingly, significant fluctuations in the US dollar
exchange rate could significantly affect our reported results.
We also earn revenues and incur costs in a range of other
currencies, including the euro and the yen and significant
fluctuations in these exchange rates could also significantly
impact our reported results.
Macroeconomic, political and market conditions may
adversely affect the availability and terms of short and
long-term funding, volatility of interest rates, the credit
quality of our counterparties, currency exchange rates and
inflation. The majority of our outstanding debt instruments
are, and any of our future debt instruments may be, publicly
rated by independent rating agencies. Our borrowing costs
and access to capital may be adversely affected if the credit
ratings assigned to our debt are downgraded.
Our approach to capital structure and funding are described
in the Chief Financial Officer’s Report on pages 54 to 59. The
approach to the management of treasury risks is described
in note 18 to the consolidated financial statements.
REPUTATIONAL RISKS
Risk Description and impact Mitigation
Ethics As a global provider of professional information solutions
to the STM, risk & business analytics, legal and exhibitions
markets we, our employees and major suppliers are
expected to adhere to high standards of independence and
ethical conduct, including those related to anti-bribery and
anti-corruption, sanctions, promoting human rights and
principled business conduct. A breach of generally accepted
ethical business standards or applicable anti-bribery and
anti-corruption, sanctions or competition statutes could
adversely affect our business performance, reputation and
financial condition.
Our Code of Ethics and Business Conduct is provided to every
employee and is supported by training and communication.
It encompasses such topics as competing fairly, prohibiting
corrupt business practices, promoting human rights and fair
employment practices and encouraging open and principled
behaviour. We have well-established processes for
monitoring, reporting and investigating instances of
unethical conduct. Our major suppliers are required to
adhere to our Supplier Code of Conduct.
The Strategic Report, as set out on pages 2 to 63 has been approved by the Board of RELX PLC.
By order of the Board Registered Office
Henry Udow 1-3 Strand
Company Secretary London
20 February 2019 WC2N 5JR
64 RELX Annual report and financial statements 2018 | Governance
65RELX Annual report and financial statements 2018
In this section
66 Board Directors
68 RELX Business Leaders
70 Chairman’s introduction to
corporate governance
72 Corporate Governance Review
83 Report of the Nominations Committee
85 Directors’ Remuneration Report
106 Report of the Audit Committee
108 Directors’ Report
Governance
Overview Business review Financial review Governance Financial statements and other information
66
Executive Directors Non-Executive Directors
Erik Engstrom (55)
Chief Executive Officer
Appointed: Chief Executive Officer of RELX
since November 2009. Joined as Chief
Executive Officer of Elsevier in 2004.
Other appointments: Non-Executive
Director of Smith & Nephew plc.
Past appointments: Prior to joining was a
partner at General Atlantic Partners. Before
that was President and Chief Operating Officer
of Random House Inc and President and Chief
Executive Officer of Bantam Doubleday Dell,
North America. Began his career as a
consultant with McKinsey. Served as a
Non-Executive Director of Eniro AB and
Svenska Cellulosa Aktiebolaget SCA.
Education: Holds a BSc from Stockholm
School of Economics, an MSc from the Royal
Institute of Technology in Stockholm, and
gained an MBA from Harvard Business
School as a Fulbright Scholar.
Nationality: Swedish
Nick Luff (51)
Chief Financial Officer
Appointed: September 2014
Other appointments: Non-Executive
Director of Rolls-Royce Holdings plc.
Past appointments: Prior to joining the
Group was Group Finance Director of
Centrica plc from 2007. Before that was
Chief Financial Officer at The Peninsular
& Oriental Steam Navigation Company
(P&O) and its affiliated companies, having
previously held a number of senior finance
roles at P&O. Began his career as an
accountant with KPMG. Formerly a
Non-Executive Director of QinetiQ Group plc
and Lloyds Banking Group plc.
Education: Has a degree in Mathematics
from Oxford University and is a qualified
UK Chartered Accountant.
Nationality: British
Sir Anthony Habgood (72)
R
N
C
Chairman
Appointed: June 2009
Other appointments: Chairman of Preqin
Holding Limited and Deputy Chairman of RG
Carter Holdings Limited.
Past appointments: Previously was Chairman
of the Court of the Bank of England,
Whitbread plc, Bunzl plc, Mölnlycke Health
Care Limited and Norwich Research Partners
LLP and served as Chief Executive of Bunzl plc,
Chief Executive of Tootal Group plc and a Director
of The Boston Consulting Group. Formerly
Non-Executive Director of Geest plc, Marks and
Spencer plc, National Westminster Bank plc,
Powergen plc, SVG Capital plc, and Norfolk
and Norwich University Hospitals Trust.
Education: Holds an MA in Economics from
Cambridge University, an MS in Industrial
Administration from Carnegie Mellon University
and an Honorary Doctorate of Civil Law from the
University of East Anglia. He is a visiting Fellow
at Oxford University.
Nationality: British
Board Directors
Robert MacLeod (54)
R
C
Non-Executive Director
Appointed: April 2016
Other appointments: Appointed as Chief
Executive of Johnson Matthey plc in June
2014 after five years as Group Finance
Director.
Past appointments: Prior to joining Johnson
Matthey, spent five years as Group Finance
Director of WS Atkins plc, having joined as
Group Financial Controller in 2003. From
1993 to 2002, held a variety of senior finance
and M&A roles with Enterprise Oil plc in
the UK and US. Formerly a Non-Executive
Director of Aggreko plc.
Nationality: British
Wolfhart Hauser (69)
R
N
C
Non-Executive Director
Senior Independent Director
Chairman of the Remuneration Committee
Appointed: April 2013
Other appointments: Chairman of
FirstGroup plc and a Non-Executive Director
of Associated British Foods plc.
Past appointments: Chief Executive Officer
of Intertek Group plc from 2005 until 2015.
Prior to that he was Chief Executive Officer
of TÜV Sud AG between 1998 and 2002
and Chief Executive Officer of TÜV Product
Service GmbH for ten years. Formerly a
Non-Executive Director of Logica plc.
Education: Holds a master's degree in
Medicine from Ludwig-Maximilian-
University Munich and a Medical Doctorate
from Technical University Munich.
Nationality: German
Carol Mills (65)
A
C
Non-Executive Director
Appointed: April 2016
Other appointments: Independent Director
of Zynga Inc and Entertainment Partners.
Past appointments: A member of the Boards
of Adobe Systems, Alaska Communications,
Tekelec Corporation, Blue Coat Systems,
Xactly Corporation, WhiteHat Security
and Ingram Micro. From 2004 to 2006,
was Executive Vice President and General
Manager of the Infrastructure Products
Group at Juniper Networks. From 1998
to 2002 was Chief Executive Officer of
Acta Technology, and before Acta, spent
16 years at Hewlett-Packard in a number
of executive roles.
Nationality: American
RELX Annual report and financial statements 2018 | Governance
Overview Business review Financial review Governance Financial statements and other information
67
Board Committee membership key
A
Audit Committee
R
Remuneration Committee
N
Nominations Committee
C
Corporate Governance Committee
Committee Chairman
Adrian Hennah (61)
A
N
C
Non-Executive Director
Chairman of the Audit Committee
Appointed: April 2011
Other appointments: Chief Financial Officer
of Reckitt Benckiser Group plc.
Past appointments: Chief Financial Officer
of Smith & Nephew plc from 2006 to 2012.
Before that was Chief Financial Officer of
Invensys plc, having previously held various
senior finance and management positions
with GlaxoSmithKline for 18 years. Formerly,
a Non-Executive Director of Indivior PLC.
Nationality: British
Linda Sanford (66)
R
C
Non-Executive Director
Appointed: December 2012
Other appointments: An independent
Director of Consolidated Edison, Inc,
Pitney Bowes, Inc and ION Trading UK Limited.
Serves on the board of trustees of the New
York Hall of Science.
Past appointments: Senior Vice President,
Enterprise Transformation, IBM Corporation
until 2014, having joined the company in 1975.
A consultant to The Carlyle Group from 2015 to
July 2018. Formerly a Non-Executive Director
of ITT Corporation, served on the boards of
directors of The Business Council of New York
State and the Partnership for New York City,
and on the boards of trustees of the State
University of New York, St John’s University
and Rensselaer Polytechnic Institute.
Nationality: American
Marike van Lier Lels (59)
A
N
C
Non-Executive Director
Workforce Engagement Director
Appointed: July 2015
Other appointments: Member of the
Supervisory Boards of NS (Dutch Railways),
Dura Vermeer and Innovation Quarter and
a member of the Executive Committee
of Aegon Association.
Past appointments: Member of the
Supervisory Boards of TKH Group NV, Royal
Imtech NV, Maersk BV, KPN NV, USG People
NV and Eneco Holding NV, and Executive Vice
President and Chief Operating Officer of the
Schiphol Group. Prior to joining Schiphol
Group, was a member of the Executive Board
of Deutsche Post Euro Express and held
various senior positions with Nedlloyd.
Member of various Dutch governmental
advisory boards.
Nationality: Dutch
Suzanne Wood (58)
A
C
Non-Executive Director
Appointed: September 2017
Other appointments: Senior Vice President
and Chief Financial Officer of Vulcan
Materials Company.
Past appointments: Served as Group
Finance Director of Ashtead Group plc from
2012 to 2018. Chief Financial Officer of
Ashtead Group’s largest subsidiary, Sunbelt
Rentals Inc, from 2003 until 2012. Previously,
she also served as Chief Financial Officer of
two US publicly listed companies, Oakwood
Homes Corporation and Tultex Corporation.
Nationality: American
Ben van der Veer (67)
C
Non-Executive Director
Appointed: September 2009
Other appointments: Member of the
Supervisory Boards of Aegon NV, Koninklijke
FrieslandCampina NV and Royal Vopak NV.
Past appointments: Chairman of the
Executive Board of KPMG in the Netherlands
and a member of the Management
Committee of the KPMG International board
until his retirement in 2008, having joined
KPMG in 1976. Formerly a member of the
Supervisory Boards of Royal Imtech
NV, Siemens Nederland NV and Tom Tom NV.
Nationality: Dutch
RELX Annual report and financial statements 2018 | Board Directors
68 RELX Annual report and financial statements 2018 | Governance
RELX Business Leaders
Senior Business Executives
Kumsal Bayazit
Chief Executive Officer
Scientific, Technical
& Medical and Chairwoman,
RELX Technology Forum
Mark Kelsey
Chief Executive Officer
Risk & Business Analytics
Chet Burchett
Chief Executive Officer
Exhibitions
Mike Walsh
Chief Executive Officer
Legal
Joined in 2004. Appointed
to current position in 2019.
Joined in 1989. Appointed CEO
Business Information in 2010
and CEO Risk Solutions in 2012.
Joined in 2004. Appointed
to current position in 2015.
Joined in 2003. Appointed
to current position in 2011.
Previously President, Exhibitions
Europe, Chief Strategy Officer,
RELX, and Executive Vice President
of Global Strategy and Business
Development for LexisNexis. Prior
to that worked with Bain &
Company in New York, Los Angeles,
Johannesburg and Sydney. Holds
an MBA from Harvard Business
School and is a Graduate of the
University of California at Berkeley.
Has held a number of senior
positions across the Group over
the past 30 years. Previously Chief
Operating Officer and then Chief
Executive Officer of Reed Business
Information. Studied at Liverpool
University and received his MBA
from Bradford University.
Previously President of the
Americas for Reed Exhibitions.
Prior to that was President
and Chief Executive Officer,
USA, for Burson-Marsteller,
a leading global public relations
agency. Holds a degree from
Baylor University.
Previously CEO of LexisNexis US
Legal Markets and Director
of Strategic Business Development
Home Depot. Prior to that was
a practising attorney at Weil,
Gotshal and Manges in Washington
DC and served as a consultant
with The Boston Consulting Group.
Holds a Juris Doctor degree
from Harvard Law School and
is a graduate of Yale University.
Overview Business review Financial review Governance Financial statements and other information
69RELX Annual report and financial statements 2018 | RELX Business Leaders
Corporate Executives
Youngsuk “YS” Chi
Director of RELX Corporate Affairs
and Chairman Elsevier
Gunjan Aggarwal
Chief Human Resources Officer
Henry Udow
Chief Legal Officer and
Company Secretary
Andrew Matuch
Chief Strategy Officer
Joined in 2005. Appointed to current
position in 2011.
Joined in 2017. Appointed
to current position at that time.
Joined in 2011. Appointed
to current position at that time.
Joined in 2012. Appointed
to current position in 2016.
Previously was President and
Chief Operating Officer of Random
House, founding Chairman of
Random House Asia and Chief
Operating Officer for Ingram
Book Group. Holds an MBA from
Columbia University and is a
graduate of Princeton University.
Previously head of Human
Resources for Ericsson’s global
media business in California and for
Ericsson North America. Prior
Human Resources positions in
Asia, Europe and North America at
Unilever and Novartis. Holds an
MBA from Xavier School of
Management, Jamshedpur, India,
and is a graduate from JMI Institute
of Technology.
Previously Chief Legal Officer and
Company Secretary of Cadbury plc
having spent 23 years working with
the company. Prior to that worked
at Shearman & Sterling in New York
and London. Holds a Juris Doctor
degree from the University
of Michigan Law School and
a bachelor’s degree from the
University of Rochester.
Previously was Executive Vice
President Global Strategy and
Business Development for
LexisNexis Legal and Professional.
Prior to that was a partner at OC&C
Strategy Consultants. Holds an
MBA from Harvard Business
School and a bachelor’s degree
from Williams College.
70 RELX Annual report and financial statements 2018 | Governance
Chairman’s introduction to corporate governance
Role and activities of the Board
My role is to lead the Board, ensuring that it carries out its
principal functions effectively; providing leadership for the
Group, overseeing its strategy and the management of risks
to its delivery, and ultimately being accountable for delivering
appropriate financial returns to shareholders over the long-term.
This report sets out how the Board carried out its principal
functions during the year, and summarises its activities and those
of its Committees during that time. It also explains in more detail
the Group’s simplified corporate governance arrangements, and
how the Company has applied the main principles of the 2016 UK
Corporate Governance Code (the Code) during the year. The Board
continues to prioritise corporate governance across RELX, and
views this as essential in underpinning the Group’s ability to
deliver long-term success for its shareholders. I am therefore
pleased to report that the Company complied with each of the
provisions of the Code during the year.
As part of its leadership role, the Board is responsible for
developing a corporate culture across RELX which promotes
integrity and transparency, and an understanding of RELX’s
responsibilities to its stakeholders and the societies in which it
operates. In this regard, the Board sets the tone from the top
of the organisation, by establishing comprehensive systems of
corporate governance, and approving policies and procedures
which promote corporate responsibility, transparency,
accountability and ethical behaviour. Central to these policies
is the Group’s Code of Ethics and Business Conduct, which sets
out clearly the standards expected for corporate and individual
behaviour. In 2018, following a comprehensive management
review process, the Board approved an updated Code of Ethics
and Business Conduct, which applies to all Directors and
employees of the Group, is embedded into the Group’s operations
through complementary policies, procedures and training, and
is available on our website at www.relx.com.
Board changes
During the year, the Nominations Committee continued to
keep the compositions of the Board and its Committees under
review to ensure that they remained appropriate. There have
been a small number of changes to the compositions of our
Committees, and a change of chairmanship of the Audit
Committee, with Adrian Hennah succeeding Ben van der Veer
with effect from April 2018. Adrian was also appointed, alongside
Marike van Lier Lels, as a member of the Nominations Committee
from September 2018, with Ben van der Veer stepping down as a
member of the Nominations Committee and the Audit Committee
at that time. Having served on the Board for nine years, Ben van
der Veer will step down as a Non-Executive Director at the
conclusion of the Company’s Annual General Meeting in April
2019 and, on behalf of the Board, I would like to thank Ben for
his dedication and major contributions during that time. In
January, we announced that Andrew Sukawaty will join the Board
as a Non-Executive Director, subject to shareholder approval.
Andrew has considerable international experience in the
technology sector, acquired through his experience in
technology-led businesses throughout his career in both
executive and non-executive roles. He will be a valuable addition
to our Board.
Biographical details of each of the Directors are set out on
pages 66 and 67.
‘Our corporate governance focus
in 2018 has been based around
removing complexity and
increasing transparency for
our stakeholders through the
completion of the Corporate
Simplification, and reviewing the
requirements of the new
Corporate Governance Code
which apply to RELX in 2019.’
Simplification of our governance framework
2018 was a significant year for RELX in respect of its corporate
governance arrangements. After receiving overwhelming
support at both shareholder meetings held in June, the Group
simplified its corporate structure by way of a cross-border
merger of RELX NV into RELX PLC. As a result, the Group moved
from a dual parent holding company structure to a single parent
company, with RELX PLC as the sole parent company of the
Group (the Simplification). This Simplification has removed
complexity and increased transparency for our stakeholders,
and followed the significant measures completed in 2015. It was
the natural next step in the evolution of our corporate governance
arrangements. This has resulted in a simpler structure, with
one Board of Directors, one market capitalisation, one class
of shares and a single tax residence, whilst maintaining a
robust, effective governance framework vital for delivering
our long-term strategy.
Following the full harmonisation of the RELX PLC and RELX NV
Boards in 2015, the Simplification did not change our Board
composition or governance framework, and the Board delegates a
number of its responsibilities to four principal Committees so that
it may continue to dedicate adequate time to fulfilling its remaining
responsibilities within its scheduled annual Board programme.
The Board’s Committee structure is set out on page 73.
Following the completion of the Simplification, the Company’s
securities are listed in the UK, US and the Netherlands, and
therefore the Company is subject to applicable corporate
governance and regulatory requirements of those jurisdictions.
These requirements, which are continually evolving, are reviewed
and monitored by the Corporate Governance Committee.
Overview Business review Financial review Governance Financial statements and other information
71RELX Annual report and financial statements 2018 | Chairman’s introduction to Corporate Governance
The New Code
The Board has noted the changes made by the new UK Corporate
Governance Code (the New Code), published by the Financial
Reporting Council in July 2018, and particularly its increased
emphasis on relationships between a company and a wide range
of its stakeholders. The Board has historically recognised and
acknowledged that stakeholder relationships, such as those with
suppliers, customers and our employees, are an important
consideration at all levels of business interaction, and this has
consistently been reflected in the Board’s decision-making.
In light of the new requirements, with effect from 1 January 2019,
Marike van Lier Lels has been appointed by the Board as a
designated Non-Executive Director to facilitate engagement
with the RELX workforce. In her role, Marike will provide an open
channel of communication with representatives of our workforce,
through which issues can be raised directly with the Board, and
discussed and considered in the Board’s decision-making process.
All requirements under the New Code will apply to RELX from
1 January 2019, and therefore the Company will report on these
in its 2019 Annual Report.
Sir Anthony Habgood
Chairman
20 February 2019
Succession planning
The Nominations Committee will continue to monitor Board
and Committee composition and review succession planning
arrangements on an ongoing basis, ensuring that appointments
continue to be based principally on merit, with due regard for the
benefits of diversity. It will be led by the Senior Independent
Director with respect to succession planning as it relates to the
role of the Chairman. It will also ensure that an appropriate
balance between continuity of service and the need for progressive
refreshing of the Board, in a controlled and structured manner,
is maintained.
Board evaluation and effectiveness
As Chairman, I am also responsible for ensuring that the
effectiveness of the Board, its Committees and each individual
Director is evaluated annually. An externally facilitated evaluation
was completed last year and therefore for 2018/19, an internally
conducted evaluation process has been carried out, overseen
by the Corporate Governance Committee. The outcome of the
evaluation confirmed that the Board and its Committees continue
to function effectively, and that all of our Directors continue to be
effective and demonstrate commitment to their role. The results
of the evaluation are set out on page 79.
Having considered the results of the review, and taking into account
the changes made to the Board and Committees during the year,
I believe that the Board and its Committees continue to operate
effectively, and have an appropriate balance of skills, experience,
independence, knowledge of the Group and diversity to ensure that
they continue to do so. I remain satisfied that the Non-Executive
Directors have sufficient time to undertake their roles.
72 RELX Annual report and financial statements 2018 | Governance
Corporate Governance Review
Overview
Corporate simplification and structure
On 8 September 2018, the structure of RELX was further
simplified from a dual parent structure to a single parent
structure by way of a merger of RELX PLC (the Company) and
RELX NV (the Simplification). Under the terms of the
Simplification, RELX NV shareholders received one share in the
Company in exchange for each RELX NV share owned. As a result
of the Simplification, the Company is now the sole parent company
of the Group, and its shares are traded through its primary
listing on the London Stock Exchange and its secondary listing
on Euronext Amsterdam, with its securities also traded on the
New York Stock Exchange under its American Depositary
Share Programme.
The Board of the Company has implemented standards of
corporate governance and disclosure policies applicable to a UK
incorporated company, with listings in London, Amsterdam and
New York. The Company has already elected the United Kingdom
as its EU home member state, and therefore, following the
Simplification, most of its regulatory and corporate governance-
related obligations arise in the UK and in the US.
Corporate governance compliance and statements
The 2016 UK Corporate Governance Code (the UK Code)
applied to the Company during the year. The Board supports
the principles of corporate governance set out in the UK Code.
A revised version of the UK Corporate Governance Code
(the New Code) was published by the Financial Reporting
Council in July 2018, which applied to the Company from
1 January 2019.
The Company, which has its primary listing on the main
market of the London Stock Exchange, has complied with
the provisions of the UK Code throughout the year ended
31 December 2018.
A description of how the Company has applied the main
principles of the UK Code is set out on pages 73 to 82.
A copy of the UK Code can be found on the FRC website at
www.frc.org.uk
The Directors of the Company are required by the UK Code to
make certain statements in relation to provisions contained in
the UK Code. The locations of those statements are as follows:
Page 2 to 63 for the Strategic Report explaining the Group’s
business model and the strategy for delivering the objectives
of the Group
Page 60 for confirmation that the Directors have carried out
a robust assessment of the principal risks facing the Group,
including those that would threaten its business model, future
performance, solvency or liquidity
Page 80 for confirmation that the Annual Report and Accounts
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy
Page 82 for an explanation of how the Directors have assessed
the prospects of the Group, taking into account the Group’s
current position and its principal risks
Page 80 for the statement on the status of the Group as a
going concern
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate Governance Review 73
Application of UK Corporate Governance
Code Principles
Leadership
Role of the Board and its Committees
The Board is responsible for providing leadership and
stewardship of the Group within a framework of appropriate
and effective controls that enable risk to be assessed, and then
managed in a manner which promotes the success of the Group.
The Board is also responsible for overseeing the Group’s strategy
and performance, financial reporting, internal control and
risk management framework, and corporate governance
processes. It is also ultimately accountable to shareholders for
the long-term performance of the business and the delivery
of shareholder returns.
In order to facilitate the oversight role that it provides in these
areas, and to ensure that it retains decision-making power in
respect of matters which are deemed to be material to the current
or future financial performance of the Group, the Board has put in
place a clear and robust corporate governance framework. This
includes a schedule of matters reserved for the approval of the
Board, such as the approval of material acquisitions, major capital
expenditure, Group strategy and budgets, the Group’s financial
statements and its dividend policy. In order to allow the Board
appropriate time to focus on these key matters within the
constraints of its annual programme, a number of its other
responsibilities have been delegated to four principal committees.
These are set out within the Terms of Reference for each
Committee, which were updated during the year, to reflect that,
from the time of completion of the Simplification, the former Dutch
entity RELX NV ceased to exist, and to reflect the increased remit
of the Remuneration and Nominations Committees, as prescribed
by the 2018 UK Corporate Governance Code (the New Code). The
current Terms of Reference for each Committee can be found on
our website at
www.relx. com. The membership and activities
of these Committees are described on pages 83, 85 and 106.
There are additionally a number of approved delegated authorities
in place from the Board to the Chief Executive Officer and other
senior executives which relate principally to the day-to-day
management of the business.
The executive leadership team supports the Chief Executive
Officer in the performance of his duties.
Chairman and Chief Executive – division of responsibilities
There is a clear separation of the roles of the Chairman, who
leads the Board, and the Chief Executive Officer, who is
responsible for the day-to-day management of the Group, which
are set out in writing and included on page 74. The table on page
74 also illustrates the key responsibilities of the other Directors.
This division of responsibilities, in addition to the Schedule of
Matters Reserved for the Board and Terms of Reference for each
Committee, ensures that there are appropriate controls in place to
prevent any individual from having unfettered powers of decision.
Audit Committee
Responsible for the oversight
of financial reporting, risk
management and internal
control policies, and the
effectiveness of the internal
and external audit processes.
The Committee comprises only
independent Non-Executive
Directors.
Report of the Audit
Committee page 106
Nominations Committee
Responsible for keeping under
review the composition of the
Board and the Board
Committees, and the
recruitment of new Directors.
The Committee comprises only
Non-Executive Directors.
Report of the Nominations
Committee page 83
Remuneration Committee
Responsible for approving the
remuneration of the Group’s
Executive Directors, the
Chairman, and senior
executives below Board level.
The Committee comprises only
Non-Executive Directors.
Directors’ Remuneration
Re
port page 85
Corporate Governance
Committee
Responsible for reviewing
ongoing developments and
best practice in corporate
governance, assessing the
performance of the Directors,
and monitoring the structure
and operation of the Board
Committees. The Committee
comprises only Non-Executive
Directors.
The Board
Board Committees
The Board has established a number of Committees, to which it has delegated certain powers, and which focus on particular
matters. The structure of these Committees and a summary of their key responsibilities are set out below. Each Committee
has its own Chairman who reports back to the Board on its activities. Details on how these Committees have addressed these
responsibilities are set out in pages 83 to 107. All the Committees have written Terms of Reference, which are available on our
website,
www.relx. com. Board Committees are principally supported by the Chief Executive Officer, Chief Financial Officer,
Chief Legal Officer and Company Secretary, and the Chief Human Resources Officer, although senior managers within the Group
are invited to attend meetings where appropriate. The Board’s annual programme and the agendas for the Committees are
prepared by their respective Chairs with support from the Company Secretary.
74 RELX Annual report and financial statements 2018 | Governance
Key roles of the Directors
Chairman
Provides leadership of the Board, ensuring that it
functions effectively
Ensures that all Directors are sufficiently apprised of
matters to make informed judgements, through the
provision of accurate, timely and clear information
Promotes high standards of corporate governance
and a Board culture of openness and debate
Sets the agenda and chairs meetings of the Board
Chairs the Nominations and Corporate Governance
Committees
Facilitates the effective contribution of all of the Directors
Ensures effective dialogue with shareholders
Ensures the performance of the Board, its Committees
and individual Directors is assessed annually
Ensures effective induction and development of Directors
Chief Executive Officer
Day-to-day management of the Group, within the delegated
authority limits set by the Board
Develops the Group’s strategy for consideration and
approval by the Board
Ensures that the decisions of the Board are implemented
Informs and advises the Chairman and Nominations
Committee on executive succession planning
Leads communication with shareholders
Promotes and conducts the affairs of the Company with the
highest standards of integrity, probity and corporate
governance
Chief Financial Officer
Day-to-day management of the Group’s financial affairs
Responsible for the Group’s financial planning, reporting
and analysis
Ensures that a robust system of internal control and risk
management is in place
Maintains high-quality reporting of financial and
environmental performance internally and externally
Supports the Chief Executive Officer in developing and
implementing strategy
Senior Independent Director
Leads the Board’s annual assessment of the performance
of the Chairman
Available to meet with shareholders on matters where
usual channels are deemed inappropriate
Deputises for the Chairman, as necessary
Serves as a sounding board for the Chairman and acts as an
intermediary between the other Directors, when necessary
Non-Executive Directors
Bring an external perspective and constructively challenge
and provide advice to the Executive Directors
Effectively contribute to the development of strategy
Scrutinise the performance of management in meeting
agreed goals and monitor the delivery of the Group’s
strategy
Serve as members of Board Committees and chair the
Audit and Remuneration Committees
Effectiveness
Board composition
The membership of the Board remained unchanged throughout
the year, and as at the date of the Annual Report was made up
of the Chairman, two Executive Directors and eight other
Non-Executive Directors, who bring a wide range of skills,
experience, industry expertise and professional knowledge to
their roles. A summary of the balance and diversity of the skills,
gender, length of tenure and nationality of the Board of Directors,
which the Nominations Committee and Board considered as
important factors when reviewing the composition of the Board,
can be found on page 75. The Nominations Committee reviews,
on an ongoing basis, the composition of the Board and its
Committees to ensure that this balance and diversity remains
appropriate, and has concluded that the current composition of
the Board allows it to discharge its duties to the Company and
govern the Group effectively.
Currently, 36% of the Board is made up of women, compared to the
Group’s target of at least 30%.
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate Governance Review 75
Knowledge of corporate governance issues for listed companies
Corporate strategy and organisation
Human resource management and executive remuneration
Operational experience in the Group’s product markets
Operational experience in the Group’s main geographical markets
Marketing and customer relations
Corporate responsibility
Financial and organisational audit
Banking, tax and corporate finance
Areas of significant skills and expertise of
the Non-Executive Directors on the Board
Percentage of the
Non-Executive Directors
Executive board experience in a large international listed company
Operational experience in the telecommunications and information technology sectors
Legal matters
BALANCE OF EXECUTIVE/NON-EXECUTIVE DIRECTORS
Non-Executive: 8
Executive: 2
Chairman: 1
GENDER DIVERSITY
Male: 7
Female: 4
LENGTH OF TENURE OF NON-EXECUTIVE DIRECTORS
Seven to nine years: 1
More than
nine years: 2
Less than three years: 3
Three to six years: 3
NATIONALITY OF DIRECTORS
American: 3
Dutch: 2
Swedish: 1
British: 4
German: 1
100%
100%
100%
100%
100%
78%
56%
33%
78%
78%
67%
67%
Balance of our Board
76 RELX Annual report and financial statements 2018 | Governance
Key activities of the Board
The Board met regularly through the year and, in 2018, held seven scheduled meetings. There was also one additional meeting held in
February 2018, to deal with matters solely related to the Simplification. The Board’s programme ensures that all relevant matters are
considered during scheduled meetings. Additionally, throughout the year, the Non-Executive Directors meet without the Executive
Directors present on a regular basis.
In 2018, the Board considered the following:
Business and financial
performance
Reports from the Chief
Executive Officer and
Chief Financial Officer on
the Group’s actual and
forecast operational and
financial performance
Annual and interim
financial results
Annual review of invested
capital
Strategy, business and
functional reviews
Strategy and business
presentations, including
two full-day strategy
reviews
Budgets and Annual
Strategy Plan 2018-2021
Updates on major
acquisitions, investments
and disposals
Capital structure and
funding requirements
Group tax strategy review
Prospects of the Group
and Viability Statement
Risk, legal, governance
andregulatory matters
The Group’s principal
risks and ongoing
monitoring of risk
management and
internal control
The Group’s operating and
governance principles
Board succession and
executive talent
management
Appointments and
re-appointments to the
Board and appointments
to Board Committees
Litigation update
Reports from the
Committee Chairmen on
the key activities of the
Board’s Committees
Matters Reserved for the
Board and the Terms of
Reference for each Board
Committee
Corporate structure
simplification
Modern Slavery Act
Statement/Gender Pay
Gap Report/General Data
Protection Regulation
readiness and compliance
with data privacy
legislation
Cyber security
Approve updated Group
Ethics and Business
Conduct Policy
The requirements of the
New Code and associated
action for the Group
Stakeholders
Investor relations
activities including
feedback from investors
Dividend declarations
and policy
Share buyback
programme
Approval of shareholder
communications, such as
the Annual Report,
Notices of Meetings, and
the Corporate
Simplification
Prospectus and Circular
Review of Corporate
Responsibility
Programme
Updates on media
relations
Assessing customer
satisfaction
Reviewing the Group’s
Supply Chain
Review of the results of
2018 group-wide
employee engagement
survey
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate Governance Review 77
Independence of the Non-Executive Directors
The Non-Executive Directors play an important role in our
corporate governance framework, especially given their
responsibility to constructively challenge the Executive Directors
and monitor the performance of management in meeting agreed
goals and objectives. In order to perform their role effectively,
their independence and objectivity are vital. Through their
membership of the Board and Committees, they also have a
significant role to play in ensuring the interests of the Executive
Directors are aligned with those of the Company’s shareholders.
The Board and each of its Committees complies with the
independence requirements set out in the UK Code. The Board
reviews the independence of the Non-Executive Directors every
year, based on the criteria as set out in the UK Code. In accordance
with the UK Code, the independence criteria are not applied in
respect of the Chairman after his appointment. Sir Anthony
Habgood met the independence criteria contained in the UK
Corporate Governance Code when he was appointed Chairman
in 2009.
The Board considers all Non-Executive Directors (other than
the Chairman whose independence was not assessed) to be
independent of management and free from any business or other
relationship which could materially interfere with their ability to
exercise independent judgement. Although Ben van der Veer has
served as a Non-Executive Director for over nine years, and will
not be seeking re-election at the 2019 AGM, the Board does not
believe that his independence has been compromised by the
length of his tenure.
Following a review by the Nominations Committee, the Board
has also noted the changes in external appointments of the
Non-Executive Directors during the year and does not perceive
these to have any impact on their independence or responsibilities
to the Company.
The Company’s Articles of Association allow the Board to review
and authorise situations where a Director has an interest that
conflicts, or may possibly conflict, with those of the Group, and
further to impose any conditions on that authorisation. The Board
has in place formal procedures for managing and authorising
actual or potential conflicts of interest.
Succession planning
The Nominations Committee regularly reviews the composition
of the Board and the status of succession plans. The Board is
updated annually on senior management succession planning,
and during the year, it received a detailed presentation from
the Chief Human Resources Officer on the first three tiers of
management below the Chief Executive Officer. Directors also
have regular contact with succession candidates for senior
and executive management positions.
Board appointments
The Board may also appoint Directors (subject to a maximum
upper limit) to fill a vacancy at any time, although any Director so
appointed shall only hold office until the following Annual General
Meeting of the Company, at which his or her re-election shall be
voted upon by shareholders. Directors are then required to seek
re-election by shareholders at each Annual General Meeting of
the Company, in accordance with the UK Code. The notice of
meeting for the 2019 AGM will set out information on the Directors
standing for election or re-election, including their biographies.
As a general rule, letters of appointment for Non-Executive
Directors provide that, subject to annual re-election by
shareholders, individuals will serve for an initial period of three
years, and are typically expected to be available to serve for a
second three-year period. If invited to do so, they may also serve
for a third period of three years. The Non-Executive Directors’
letters of appointment set out the expected time commitment
required by the Company to fulfil their duties. The notice period
applicable to the Non-Executive Directors is one month. The
notice period applicable to the Executive Directors is 12 months.
Details of the terms of appointment and the remuneration of both
Executive and Non-Executive Directors are set out in the
Directors’ Remuneration Report, on pages 85 to 105.
The Company has in place a rigorous procedure for the
appointment of new Directors to the Board. This involves the
preparation of a search specification by the Nominations
Committee and the engagement of an external search firm to
identify and propose candidates based on that specification.
Any candidates will initially be interviewed by a number of Board
members, including the Chairman and Chief Executive Officer,
and additionally the Chief Legal Officer and Company Secretary.
The candidates are considered in detail by the Nominations
Committee, and a recommendation made to the Board regarding
any Director appointment. The Board then has a further
opportunity to discuss and approve the recommended
appointment of any Director.
Board and Committee changes
There were no changes in Board membership during 2018.
The changes in the composition of Board Committee membership
are set out in the table on page 78.
In anticipation of Ben van der Veer having served nine years on
the Board as of September 2018, a review of the composition of
the Board’s Committees was completed by the Nominations
Committee. Following this, the Board accepted a recommendation
from the Nominations Committee that with effect from 19 April
2018, Adrian Hennah succeed Ben van der Veer as the Chairman of
the Audit Committee and also with effect from 1 September 2018:
(i) Adrian Hennah and Marike van Lier Lels join the Nominations
Committee; and (ii) Ben van der Veer step down from the Audit
Committee and the Nominations Committee.
78 RELX Annual report and financial statements 2018 | Governance
Board induction and development
The Chairman and the Company Secretary are responsible for
ensuring that an effective induction programme takes place for
all new Directors. Following appointment and as required, all
Directors receive a full, formal and tailored induction, which is
designed to meet their individual needs based on their knowledge
and experience. It includes meetings with members of the Group’s
Executive and Senior Management teams, and visits to the offices
of the Group’s main business areas in order to understand how
they operate. It also includes the provision of a comprehensive
briefing pack which contains information on the Group’s
businesses, as well as other information to assist that Director
in performing their duties.
To ensure that the Directors continually update their skills,
knowledge and familiarity with the Group, they attend meetings
in addition to scheduled Board and Committee meetings and
participate in site visits. Additionally, Non-Executive Directors
also have opportunities to meet RELX Business Leaders and
other senior executives. As part of the annual Board evaluation,
Directors are invited to discuss with the Chairman their training
and development needs.
Board information and support
All Directors have complete and timely access to the information
required to discharge their responsibilities fully and effectively.
They have access to the services of the Company Secretary, who
is responsible for the accurate and timely flow of information to
the Board and advising the Board on all corporate governance
matters, and ensuring that all Board procedures are followed
correctly. The Company Secretary attends all of the Board and
Committee meetings.
The Directors also have access to other members of the Group’s
management, staff and external advisers, and may take
independent professional advice in the furtherance of their duties,
at the Company’s expense. Each of the Directors is expected to
attend all meetings of the Board and Committees of which they are
a member.
The Nominations Committee assesses the external commitments
of each Board member to ensure that they have the time to
properly fulfil the responsibilities to RELX which come with that
position. Where a Director is unable to attend a Board or
Committee meeting, they are provided with the papers relating to
that meeting and are able to discuss issues arising with the
respective Chairman and other Board and Committee members.
They are also provided with a copy of the meeting minutes.
Attendance at meetings of the Board and Board Committees
The table below shows the attendance of Directors at meetings of the Board and the Board Committees during the year.
Attendance is expressed as the number of meetings attended out of the number eligible to be attended.
Director
Committee
appointments Board
(1)
Audit Remuneration Nominations
Corporate
Governance
Anthony Habgood (Chairman)
R
N
C
8/8 – 4/4 4/4 4/4
Board Committee
membership key
A
Audit
R
Remuneration
N
Nominations
C
Corporate Governance
Committee Chairman
Erik Engstrom – 8/8 – – – –
Nick Luff – 8/8 – – – –
Wolfhart Hauser
R
N
C
8/8 – 4/4 4/4 4/4
Adrian Hennah
(2)
A N
C
8/8 4/4 – 1/1 4/4
Marike van Lier Lels
(3)
A N
C
8/8 4/4 – 1/1 4/4
Robert MacLeod
R
C
8/8 – 4/4 – 4/4
Carol Mills
(4)
A
C
7/8 4/4 – – 4/4
Linda Sanford
R
C
8/8 – 4/4 – 4/4
Ben van der Veer
(5)
A
N
C
8/8 2/3 – 3/3 4/4
Suzanne Wood
A
C
8/8 4/4 – – 4/4
(1) In addition to the seven scheduled meetings , there was an additional meeting to discuss matters related to the Simplification. Serving Directors also attended two full-day
strategy and business review meetings.
(2) Mr Hennah was appointed as Chairman of the Audit Committee with effect from 19 April 2018, and a member of the Nominations Committee with effect from 1 September 2018.
(3) Ms van Lier Lels was appointed as a member of the Nominations Committee with effect from 1 September 2018.
(4) Ms Mills was unable to attend the unscheduled February meeting of the Board, held at short notice to discuss matters related to the Simplification. She was provided with
the papers in advance of the meeting for her review and comment (which was provided to the Chairman), and subsequent to the meeting taking place was provided with a
copy of the minutes.
(5) Mr van der Veer stepped down as Chairman of the Audit Committee on 19 April 2018, and as a member of the Audit and Nominations Committees with effect from
1 September 2018.
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate Governance Review 79
Board evaluation
The Directors consider the evaluation of the Board, its Committees
and members to be an important aspect of corporate governance.
The Board undertakes an annual evaluation of its own effectiveness
and performance, and that of its Committees and individual
Directors. In 2018, the Board undertook an internal evaluation,
overseen by the Corporate Governance Committee and supported
by the Company Secretary. Using questionnaires completed by
all Directors, the Committee explored key areas including: the
performance of the Board; Board composition and succession
planning; talent management and executive leadership succession;
risk management, corporate governance and compliance; quality
of information provided by management; Board Committee
effectiveness; and Board understanding and visibility of the views of
the Group’s stakeholders, and incorporation of them into the Board’s
decision-making process. The Chairman conducted interviews with
each of the Directors. The review of the performance of the Chairman
was led by the Senior Independent Director. The Chairman was not
present during the discussion among the Non-Executive Directors
relating to his performance. The conclusions of the review were
presented and considered at the February 2019 meeting of the Board.
Conclusions of the 2018 Evaluation
The evaluation confirmed that, overall, the Directors believe
that the Board and each of its Committees continue to function
effectively, are well chaired and receive appropriate levels of
administrative and advisory support. The Board is involved in
key decisions. It is also adequately engaged in the development
and approval of the Group’s strategic, financial and business
objectives. The evaluation further confirmed that the Board
believes it is appropriately involved in assessing performance
against these objectives. Directors believe that the Board has
the right blend of experience, skills and diversity in the context
of the challenges currently facing the Group, although they
noted that the evolution of the Board and the skills that
individual Directors bring warrant continuing regular review.
The evaluation also focused on the Board’s view of how the
Group is positioned to address the requirements of the New
Code, which apply from 1 January 2019. Directors expressed
their support for a designated Non-Executive Director to
serve as the mechanism for the Board’s engagement with the
Group’s employees, and the appointment of Marike van Lier
Lels to this role, drawing on her experience fulfilling a similar
role previously for RELX NV. The evaluation process confirmed
that the Board believes it has adequate visibility of the views of
its material stakeholders, such as employees, shareholders,
customers and suppliers and appropriately applies its
understanding of these in its decision making. An area of focus
for the Board in 2019 will be further discussion around its role
in setting and ensuring the maintenance of the Group’s culture.
All Directors commended the Chairman on his effective
leadership of the Board, noting amongst other things that he
facilitates: (i) the effective contribution of each NED; and (ii)
the development of constructive relationships and
communications within the Board.
Based on the findings of the review, the Corporate Governance
Committee concluded that the Board and its Committees
function effectively and collaboratively and with an appropriate
level of engagement with management. The Committee also
concluded that the performance of each Director continues to
be effective and that they demonstrate commitment to their
respective roles.
Accountability
Internal control and risk management
RELX has established internal controls and risk management
practices that are embedded into the operations of the businesses,
based on the Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organisations of the
Treadway Commission. Details of the principal risks facing the
Group and how these are mitigated are set out on pages 60 to 63.
Additionally, in order to provide reasonable assurance against
material inaccuracies or loss, and on the effectiveness of the
systems of internal control and risk management, the Group has
adopted the three lines of defence assurance model shown below.
System of Internal Control
1st line of defence
Group businesses maintain systems of internal
control which are appropriate to the nature and
scale of their activities and address all significant
strategic, operational, financial and legal
compliance risks that they face
2nd line of defence
Central functions that are responsible for
1) designing policies, 2) introducing and sharing best
practice, 3) monitoring and evaluating compliance
with RELX policies and relevant legislation and
regulation and appropriate remediation
RELX Operating and Governance Principles
3rd line of defence
Internal audit provides independent assurance on
the effectiveness of the 1st and 2nd lines of defence
The Board and Audit Committee
Note: In addition to the Group’s internal controls, the Group is also audited externally.
The report of the external auditor has been included from pages 113 to 120.
The Board has adopted a schedule of matters which are required
to be brought to it for decision. The Board is responsible for the
system of risk management and internal control of the Group and
has implemented an ongoing process for identifying, assessing,
monitoring and managing the principal risks faced by its
businesses. This process was in place throughout the year ended
31 December 2018, and up to the date of the approval of the Annual
Report and Financial Statements 2018. The Board monitors these
systems of internal control and risk management and annually
carries out a review of their effectiveness.
RELX has an established framework of procedures and internal
control, with which the management of each business is required
to comply. The Group operates authorisation and approval
processes throughout all of its operations. Access controls exist
where processes have been automated to ensure the security of
data. Management information systems have been developed to
identify risks and to enable assessment of the effectiveness of the
systems of internal control.
80 RELX Annual report and financial statements 2018 | Governance
RELX has a Code of Ethics and Business Conduct that provides a
guide for achieving its business goals and requires officers and
employees to behave in an open, honest, ethical and principled
manner. The Code also outlines confidential procedures enabling
employees to report any concerns about compliance, or about the
Group’s financial reporting practice. The Code is available on our
website at
www.relx.com .
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 facing RELX businesses are regularly reported
to and assessed by the Board and Audit Committee. With the close
involvement of business management and central functions, the
risk management and control procedures ensure that the Group
is managing its business risks effectively and in a coordinated
manner across the businesses with clarity on the respective
responsibilities and interdependencies. Litigation, and other
legal and regulatory matters, are managed by legal directors in
the businesses.
The Audit Committee also receives regular reports from both
internal and external auditors on internal control and risk
management matters. In addition, each business area is required,
at the end of the financial year, to review the effectiveness of
internal controls and risk management and report its findings
on a detailed basis to the management of RELX. These reports
are summarised and, as part of the annual review of effectiveness,
submitted to the Audit Committee. The Chairman of the Audit
Committee reports to the Board on any significant internal control
matters arising.
Annual review
As part of the year-end procedures, the Audit Committee and
Board reviewed the effectiveness of the systems of internal
control and risk management during the 2018 financial year.
This included consideration of risk appetite (defined as the Group’s
willingness to take on risk) for each principal risk. Risk appetite
is based on an assessment of the level of residual risk, taking
account of inherent risk and mitigation efforts. The assessment is
rated, in relation to the Group’s objectives for the current level of
residual risk, in three broad categories: reduce, accept and willing
to extend. The level of residual risk which the Group is prepared
to accept will vary, with a high level of mitigation effort over
operational, financial and compliance risks. The residual risk level
for external and strategic risks may be extended if doing so is in
line with the Group’s strategic objectives, values and stakeholder
interests and if shareholder returns could be increased. As part
of the annual review, the Board considered the Group’s culture.
The objective of these systems of internal control and risk
management is to manage, rather than eliminate, the risk of
failure to achieve business objectives. Accordingly, they can only
provide reasonable, but not absolute, assurance against material
mis-statement or loss. The Board has confirmed, subject to the
above, that as regards financial reporting risks, the respective risk
management and control systems provide reasonable assurance
against material inaccuracies or loss and have functioned
properly during the year. In accordance with the Code, the Board
has also considered the Group’s long-term viability, following
a robust and thorough assessment of its principal risks.
The resulting Viability Statement is set out on page 82.
Responsibilities in respect of financial
statements
The Directors are required to prepare financial statements as at
the end of each financial period, in accordance with applicable
laws and regulations, which give a true and fair view of the state
of affairs, and of the profit or loss, of the Company and its
subsidiaries, joint ventures and associates. They are responsible
for maintaining proper accounting records, for safeguarding
assets and for taking reasonable steps to prevent and detect
fraud and other irregularities.
The Directors are also responsible for selecting suitable
accounting policies and applying them on a consistent basis,
and making judgements and estimates that are prudent and
reasonable. Applicable accounting standards have been followed
and the RELX consolidated financial statements, which are the
responsibility of the Directors of the Company, are prepared using
accounting policies which comply with International Financial
Reporting Standards as issued by the International Accounting
Standards Board and as adopted by the European Union. Having
taken into account all of the matters considered by the Board and
brought to the attention of the Board, the Directors are satisfied
that the Annual Report and Financial Statements, taken as a
whole, is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
Going concern
The Directors, having made appropriate enquiries, consider that
adequate resources exist for the Group to continue in operational
existence for the foreseeable future and that, therefore, it is
appropriate to adopt the going concern basis in preparing the 2018
financial statements. In reaching these conclusions, the Directors
have had due regard to the Group’s financial position as at
31 December 2018, the strong free cash flow of the Group, the
Group’s ability to access capital markets and the principal risks
facing the Group.
A commentary on the Group’s cash flows, financial position and
liquidity for the year ended 31 December 2018 is set out in the Chief
Financial Officer’s report on pages 54 to 59. This shows that after
taking account of available cash resources and committed bank
facilities that back up short-term borrowings, all of the Group’s
borrowings that mature within the next two years can be covered.
The Group’s policies on liquidity, capital management and
management of risks relating to interest rate, foreign exchange
and credit exposures are set out on pages 150 to 155. The principal
risks facing the Group are set out on pages 60 to 63.
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Corporate Governance Review 81
US certificates
As required by Section 302 of the US Sarbanes-Oxley Act 2002
and by related rules issued by the US Securities and Exchange
Commission (the Commission), the Chief Executive Officer and
Chief Financial Officer of the Company certify in the Annual Report
2018 on Form 20-F to be filed with the Commission that they are
responsible for establishing and maintaining disclosure controls
and procedures and that they have:
designed such disclosure controls and procedures to ensure
that material information relating to the Group is made known
to them
evaluated the effectiveness of the Group’s disclosure controls
and procedures
based on their evaluation, disclosed to the Audit Committee
and the external auditors all significant deficiencies in the
design or operation of disclosure controls and procedures and
any frauds, whether or not material, that involve management
or other employees who have a significant role in the Group’s
internal controls
presented in the Annual Report 2018 on Form 20-F their
conclusions about the effectiveness of the disclosure controls
and procedures
A Disclosure Committee, comprising the Company Secretary and
other senior managers of the Group, provides assurance to the
Chief Executive Officer and Chief Financial Officer regarding their
Section 302 certifications.
Section 404 of the US Sarbanes-Oxley Act 2002 requires the
Chief Executive Officer and Chief Financial Officer of the Company
to certify in the Annual Report 2018 on Form 20-F that they are
responsible for maintaining adequate internal control structures
and procedures for financial reporting and to conduct an
assessment of their effectiveness. The conclusions of the
assessment of internal control structures and financial reporting
procedures, which are unqualified, are presented in the Annual
Report 2018 on Form 20-F.
Shareholder engagement
The Board values regular dialogue with the Company’s
shareholders. The Company reports to its shareholders through
the publication of the interim and full-year reports, following
which presentations are made by the Chairman, Chief Executive
Officer and Chief Financial Officer on the Group’s business, and
these are simultaneously webcast. In addition, quarterly trading
updates are provided ahead of the Annual General Meeting and
towards the end of the financial year, and a conference call with
investors was held following the third-quarter trading update
for 2018.
In addition, a teach-in focused on developments in the Risk &
Business Analytics business was held for analysts and investors in
November 2018, which was also made available on our website at
www.relx.com .
The Chief Executive Officer, the Chief Financial Officer and the
investor relations team meet institutional shareholders on a
regular basis and the Chairman also makes himself available to
major institutions as appropriate. The interim and annual results
announcements and presentations, together with the trading
updates, other important announcements and corporate governance
documents concerning the Group, are available on our website.
The Board commissions periodic reports on the attitudes and
views of the Company’s institutional shareholders and the results
are presented to the Board. The Board also receives regular
updates from the Head of Investor Relations on the views of
shareholders through a briefing which is a standing agenda item
for all meetings of the Board.
Annual General Meeting
All holders of RELX PLC ordinary shares may attend the
Company’s Annual General Meeting (AGM) in April 2019. The AGM
provides an opportunity for the Board to communicate with
individual shareholders, and for shareholders to provide their
views on the performance and progress of the Group. The
Chairman, the Chief Executive Officer, the Chief Financial Officer,
the Chairmen of the Board Committees, other Directors and a
representative of the external auditors are available to answer
questions from shareholders. The Chief Executive also presents
a review of the key business developments during the year. The
Company offers electronic voting facilities in relation to proxy
voting at shareholder meetings. In line with the UK Code, details of
proxy voting by shareholders, including votes withheld, are given
at the AGM and are posted on our website following the AGM.
The notice of meeting for the 2019 AGM will set out in full the
resolutions for consideration by shareholders, together with
explanatory notes and information on the Directors standing
for election or re-election.
82 RELX Annual report and financial statements 2018 | Governance
The UK Corporate Governance Code requires Directors to
assess the prospects of the Group over a period significantly
longer than twelve months and to state whether they have a
reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over the period
of their assessment.
Assessing the Group’s Prospects
The Group develops information-based analytics and decision
tools for professional and business customers in the Scientific,
Technical &Medical, Risk and Business Analytics, Legal and
Exhibitions sectors. The Group has leading positions in long-term
growth markets, deep customer understanding and has
developed innovative solutions that often account for about 1% of
our customers’ cost base but can have a significant and positive
impact on the economics of the remaining 99%. Having effectively
transitioned the business from print to digital, the Group is
systematically migrating its information solutions toward higher
value-add decision tools, adding broader data sets, embedding
more sophisticated analytics and leveraging more powerful
technology. We believe this evolution is improving our business
profile and positions the Group for future business success.
The Group’s prospects are assessed through the annual strategy
planning process. This process includes a review of assumptions
made and assesses each business area’s longer-term plan. The
resulting three-year strategy plan forms the basis for Group and
divisional targets and in-year budgets. Objectives are set with
consideration given to the economic and regulatory environment,
and to customer trends, as well as incorporating risks and
opportunities. The most recent three-year strategy business plan
was agreed by the Directors in September 2018.
In assessing the Group’s prospects, our current position and
principal risks are considered as follows:
Current position and business model
Diversified business in terms of sectors, markets, customers,
geographies and products and services so that we are not
dependent on any one business, customer, region or product
High percentage of subscription and recurring revenue
streams
Leading positions in long-term global growth markets
Low working capital and capital investment requirements
leading to high levels of cash generation
Clear strategy focused on organic growth supplemented by
selective acquisitions in higher growth areas
Continued development of increasingly sophisticated
information-based analytics and decision tools
Expansion into higher growth adjacencies and geographies
primarily through organic investment augmented with
selective acquisitions
Further details on our strategy and 2018 progress are on pages 4
and 5.
Principal risks related to our business model
Challenges to the intellectual property rights of content
embedded in our products and services
Disruption or loss of data sources that our businesses rely on
due to regulation or other reasons
Changes to the paid subscription model for our primary
research business within Scientific, Technical & Medical
Technological failure of our electronic platforms and networks
Failure of our cyber security measures resulting in
unauthorised access to our systems and breach of data privacy
Detailed descriptions of all principal risks and mitigations are on
pages 60 to 63.
Assessing the Group’s Viability
The three-year strategy plan for our businesses includes
management’s assessment of the anticipated operational risks
affecting the business and assumes that current economic
conditions broadly persist, financing will be available on similar
terms to those negotiated recently and interest rates will follow
market expectations. Management then considers the viability
of the business should unexpected events, linked to the principal
risks, occur. To first make the assessment, the financial impact
of each principal risk on revenue and cashflow is estimated.
Owing to the diversified nature of the Group, no individual risk
was estimated to have an impact close to the amount, broadly
estimated at one third of total Group cashflow, necessary for
a breach of the covenant in the Group’s $3.0bn committed
bank facility.
The assessment then considers various stress-test scenarios
under which multiple risks occur simultaneously accompanied
by an inability to access the debt capital markets to refinance
scheduled liabilities as they become due, together with an increase
in interest rates much faster than currently expected. The
resulting analysis, which assumes share buybacks are suspended
but dividends continue uninterrupted, then considers the impact
on available headroom and whether any scenario results in
breaching the covenant in the committed bank facility.
The worst-case stress case modelled a combination of the
following risks: (a) the inability to use certain third-party data
resources; (b) an adverse impact on revenue from a shift away
from the paid subscription model; and (c) having our systems
disrupted by a cyber security event. The analysis concluded that
even with the simultaneous occurrence of these three risks, no
access to the debt capital markets and a sharply rising interest
rate environment, the Group would still have sufficient funds to
trade, settle its liabilities as they come due and remain compliant
with the covenant in its committed bank facility, whilst still paying
forecast dividends.
In addition to scenario modelling, the Directors bi-annually review
the Group’s principal risks, assess the likelihood and impact of
each risk together with the effectiveness of mitigating controls,
and consider emerging risks. The Directors also receive regular
updates from management on treasury, tax, acquisitions and
divestments, and significant risk areas including information
security, technology and legal and regulatory matters. Finally,
separate from the annual strategy plan, the Directors periodically
receive updates from business area management on their
operations, prospects and risks. Whilst these reviews and
discussions naturally focus more closely on the quantifiable risks
facing the business within the three-year planning period, they
also cover longer-term risks.
As a result of stress-testing the three-year strategy plan,
supported by regular reviews of risk during the year, the Directors
confirm that they have a reasonable expectation that the Group will
be able to continue its operations and meet its liabilities as they fall
due over the next three years and are not aware of any longer-term
operational or strategic risks that would result in a different
outcome from the three-year review.
Viability statement
Overview Business review Financial review Governance Financial statements and other information
83RELX Annual report and financial statements 2018
This report has been prepared by the Nominations Committee and
has been approved by the Board.
Membership
The Committee comprises only Non-Executive Directors. The
members of the Committee who served during the year were:
Sir Anthony Habgood (Committee Chairman)
Wolfhart Hauser
Ben van der Veer (until 1 September 2018)
Adrian Hennah (from 1 September 2018)
Marike van Lier Lels (from 1 September 2018)
Responsibilities
The principal role and responsibilities of the Committee are
to provide assistance to the Board by identifying individuals
qualified to become Directors and recommending to the Board
the appointment of such individuals. The responsibilities of the
Committee are set out in written Terms of Reference (available
at
www.relx.com) and include:
to keep under review the size and composition of the Board
to develop and agree the specification for the recruitment
of new Directors
to procure the recruitment of new Directors
to recommend to the Board the appointment of candidates
as RELX PLC Directors
to recommend Directors to serve on the Committees of
the Board, having regard to the criteria for service on each
Committee as set out in the Terms of Reference for such
Committees and to recommend members to serve as the
Chair of those Committees
to make recommendations to the Board in relation to
the re-appointment of any Non-Executive Director at the
conclusion of his/her specified term of office and the election
or re-election of Directors at the AGM
to review and make recommendations to the Board in
relation to any Directors’ actual or potential conflicts
of interest
Activities of the Committee
During the year, the Committee met four times and its main areas
of focus were:
the re-appointment of Sir Anthony Habgood as Chairman at the
conclusion of his specified term of office
the re-appointments of Marike van Lier Lels, Linda Sanford and
Ben van der Veer as Non-Executive Directors at the conclusion
of their specified terms of office
the continued independence of Ben van der Veer as a Director
following his nine years of service, with reference to guidance
provided under the UK Corporate Governance Code
a review of the composition of the Audit and Nomination
Committees resulting in the following changes: Ben van der
Veer stepped down as Chairman and member of the Audit
Committee and stepped down as a member of the Nomination
Committee; Adrian Hennah was appointed as the Chairman
of the Audit Committee and a member of the Nominations
Committee; and Marike van Lier Lels was appointed as
a member of the Nominations Committee
a review of the Committee’s Terms of Reference to reflect the
corporate simplification carried out by the Group during the
year, and the increased remit of the Committee proposed by
the 2018 UK Corporate Governance Code (New Code)
succession planning for Non-Executive Directors
the recommendation to the Board of the suitability of Directors’
external non-executive director appointments
a review of the provisions of the New Code impacting
Board appointments and diversity
Report of the Nominations Committee
84 RELX Annual report and financial statements 2018 | Governance
Composition and diversity of the Board
The Committee seeks to ensure that the Board and its
Committees comprise an appropriate balance of skills,
experience, independence, knowledge of the Group’s businesses,
and diversity, including gender, that enable them to execute their
responsibilities. In light of Ben van der Veer stepping down as a
Non-Executive Director at the 2019 AGM, the Committee
considered succession planning for the Board. As part of the
ongoing evolution of the composition of the Board, the Committee
deemed that it would be desirable to appoint to the Board an
additional Non-Executive Director with significant executive and
public company experience.
The Committee put together a specification for candidates, and
engaged the independent global search and leadership advisory
firm, Russell Reynolds (which has no other connection to RELX),
to carry out the search for a new Non-Executive Director.
Following a rigorous process of assessments and interviews, the
Committee recommended to the Board that Andrew Sukawaty be
appointed as a Non-Executive Director. The Board accepted this
recommendation and therefore he will be put forward for election
by shareholders as a Director with effect from the 2019 AGM.
The policy applied by the Board in respect of its diversity replicates
that applied across RELX. The Board, and the Group more widely,
are committed to a diverse workforce and an environment that
respects individuals and their contributions, regardless of gender,
race or other characteristics, and to ensure the implementation of
that commitment. The Committee takes the policy into
consideration when discussing the composition of the Board and
its Committees, and any appointments or changes to them, and
this helps the Committee ensure that there is an appropriate
balance of skills, experience, independence, knowledge of the
Group, and diversity including gender, background and nationality.
The results of the application of the policy can be found within the
‘Balance of our Board’ section set out on page 75.
The Committee recognises the benefits that diversity on the Board
can bring and will continue to monitor developments in relation to
Board diversity. Details of the Group’s approach to diversity and
inclusion more generally in its workforce can be found on page 47.
The Committee also considered the continued appointment of the
Chairman, in light of the New Code provision applicable from 2019
relating to length of tenure for that position, and noting that Sir
Anthony Habgood had served as a Non-Executive Director since
1 June 2009. In its deliberations the Committee noted that the
corporate simplification involving the cross-border merger of
RELX NV into RELX PLC, with the Company becoming the sole
parent company of the Group, had completed in the third quarter of
2018. The Committee felt that continuity of Board leadership under
our current experienced Chairman is important for a period of
time following the merger while the new single parent company
governance structure is established and embedded. Having been
deeply involved in all aspects of the merger the Committee felt that
the Chairman brings a unique ability to oversee its implementation.
The Committee further took into account the Chairman’s strong
leadership of the Board highlighted in recent Board evaluations,
and also the respect and support that he had from the Company’s
shareholders.
Given these circumstances, the Committee recommended to the
Board that it would not be in the best interests of the Company or
its shareholders for there to be a change in Chairman at this time
(notwithstanding the New Code provision), provided no
unforeseen circumstances arose, and that the position would be
reviewed after 2019 by the Committee. The Board supported and
approved the Committee’s recommendation.
The charts on page 75 illustrate in more detail the composition
of the Board.
Succession planning
In light of the New Code, the Committee recommended to the
Board that its remit should be widened to include monitoring and
reviewing succession planning for senior management positions
within the Group. This was previously undertaken by the Board,
but will now be undertaken principally by the Committee, with
detailed reports being provided to the Board from time to time to
enable it to maintain appropriate levels of oversight in this area.
Conflicts of interest
During the year, the Committee monitored Directors’ conflicts of
interest in respect of their external appointments, and undertook
an annual review of these. No actual conflicts were identified.
However, situations were identified which could potentially give
rise to a conflict of interest, and the Board authorised those
situations and put in place appropriate procedures to manage any
potential conflicts at the recommendation of the Committee. More
information on conflicts of interest can be found in the Directors’
Report on page 110.
Board and Committees Evaluation
The Committee reviewed the results of the evaluation of the
effectiveness and performance of the Board, their Committees
and the individual Directors, which had been overseen by the
Corporate Governance Committee. Details of the 2018 Board
evaluation can be found on page 79.
85
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018
Directors’ Remuneration Report
The Directors’ Remuneration Report (the Report) has been prepared by the Remuneration Committee (the Committee) in
accordance with the UK Corporate Governance Code, the UK Listing Rules and the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 (the UK Regulations).
The Report was approved by the Board.
Introduction from the Remuneration Committee Chairman
The attached Report reflects the 2018 annual incentives earned and the vesting outcomes for multi-year incentives granted under the
remuneration policy applicable to the 2016–2018 cycle of the multi-year plans.
As you will have read in the Annual Report, the Company’s strategic priority is the organic development of increasingly sophisticated
information-based analytics and decision tools that deliver enhanced value to professional and business customers across industries.
During 2018, RELX continued to successfully execute this strategy, which is aimed at achieving more predictable revenues, a higher
growth profile and improving returns. As a result, underlying revenue growth was 4%, underlying operating profits grew 6% and
adjusted earnings per share (EPS) at constant currencies grew 7%.
The performance measures in the incentive plans align with and support the strategy by focussing on sustained earnings growth, return
on invested capital and shareholder returns. The performance measures are based on adjusted figures as they provide relevant
information in assessing the Company’s performance, position and cash flows and we believe they track the core operational
performance of RELX and how it contributes to shareholder value creation. The Committee has confirmed that the adoption of new
accounting standards in 2018 has had no impact on payouts under the annual or multi-year incentives. The Annual Report includes a
reconciliation of adjusted measures to IFRS measures.
2018 Outcomes
The strong financial performance of the business is reflected in the 2018 annual incentive achievement for Executive Directors of
marginally above the target level. Two-thirds of the amount earned will be paid in cash to the Executive Directors in March 2019 and the
remaining one-third is deferred into RELX shares which will be released in Q1 2022.
The 2016–18 cycle of the Long Term Incentive Plan (LTIP) vested at 68.6%, with similar vesting levels achieved under both the EPS and
total shareholder return (TSR) measures and return on invested capital (ROIC) in 2018 of 13.2%. With respect to the 2016-18 cycle of the
discontinued Bonus Investment Plan (BIP) and the Executive Share Option Scheme (ESOS), ROIC and EPS performance resulted in
vesting percentages of 87.5% and 90.0% respectively. These outcomes reflect strong returns and earnings growth achieved by the
business and how the challenging targets set by the Committee have been perceived by the market. In determining the level of payout
under the annual incentive and the multi-year incentives, the Committee took into account RELX’s overall business performance and
value created for shareholders over the period in review and other relevant factors.
2018 Implementation of simplified Remuneration Policy
The simplified remuneration policy for Executive Directors, which was approved by shareholders in April 2017 by a vote of 95% of the
shares voted, was fully implemented in 2018.
For the 2018 annual incentive, it was decided that the KPOs for the Executive Directors would reflect solely non-financial targets. As a
result, the Committee increased the overall weighting of financial measures from 70% to 85% at target achievement and reduced the
weighting of the individual KPOs from 30% to 15%. This was in accordance with our approved remuneration policy which contains
flexibility to change the weightings, provided the financial targets have a weighting of at least 70%. Recognising the desire on the part
of some shareholders for additional disclosures, you will see that we have provided expanded disclosures this year in connection with
the KPOs.
A description of the Remuneration Policy, as approved by shareholders at the April 2017 Annual General Meetings, is included on pages
99 to 105 of this Report.
Corporate simplification
As a result of the corporate simplification to merge RELX NV into RELX PLC, which took effect on 8 September 2018, all awards and
options over shares in RELX NV were exchanged for awards and options over shares in RELX PLC on a one-for-one basis. In respect
of the euro TSR comparator group for LTIP awards (including the 2016–18 cycle), RELX NV shares were, subsequent to the merger,
replaced with RELX PLC shares priced in euros and listed on Euronext Amsterdam. In respect of the US dollar TSR comparator group,
RELX NV ADRs were, subsequent to the merger, replaced with RELX PLC ADRs. No other adjustments were made to the performance
conditions attached to outstanding awards and options.
86 RELX Annual report and financial statements 2018 | Governance
2018 Corporate Governance Code
Following the publication by the FRC of the new Corporate Governance Code in July 2018, the Committee has reviewed the updated
provisions relating to remuneration matters. The Committee will report on how these have been implemented in next year’s Report.
You will see that with respect to workforce engagement, we have decided to designate a non-executive director to take on responsibility
for this and have introduced a fee for this activity.
2019 Implementation of Remuneration Policy
In line with increases for the wider employee population, and consistent with the 2019 salary increase guidelines for UK based
employees, the Committee has approved 2019 salary increases for the Executive Directors of 2.5%. As the CEO pays pension
contributions and a participation fee which increase each year, after taking into account these increasing fees, his 2019 salary after these
increasing deductions will decrease again in 2019 compared to 2018.
Following a review in 2019, we will propose a directors’ remuneration policy for approval by shareholders at the AGM in April 2020.
The audited sections of the Report are clearly marked.
Wolfhart Hauser
Chairman, Remuneration Committee
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 87
Overview Business review Financial review Governance Financial statements and other information
Annual Remuneration Report
Single Total Figure of Remuneration – Executive Directors (audited)
(a) (b) (c) (d) (e) (f)
Annual incentive
Share based
awards
(3)
Pension
(4)
Total£’000 Salary Benefits
(1)
Cash
Deferred
Shares
(2)
Erik Engstrom 2018 1,218 85 1,269 635 4,662 545 8,414
2017 1,189 84 1,238 n/a 5,458 779 8,748
Nick Luff 2018 717 14 753 376 2,341 196 4,398
2017 700 17 726 n/a 2,747 204 4,394
(1) Benefits are typically comprised for each Executive Director of a car allowance and private medical/dental insurance and the
company meets the cost of tax return preparation.
(2) Deferred shares earned under the Annual Incentive Plan are deferred for three years and not released to the Executive Directors
until Q1 2022. They carry the right to payment of dividend equivalents when released.
(3) The figures for share based awards are calculated in accordance with the methodology set out in the UK Regulations. The figure for
performance-related share based awards includes share price appreciation since the date the award was granted. In the case of
Erik Engstrom’s figures, the amount included that directly reflects share price appreciation is £1.7m for 2017 and £1.5m for 2018 (of
which £0.6m relates to the LTIP, £0.3m relates to the BIP and £0.6m relates to the ESOS). For Nick Luff, the amount included that
relates to share price appreciation is £0.8m for 2017 and £0.7m for 2018 (of which £0.3m relates to the LTIP, £0.2m relates to the BIP
and £0.3m relates to the ESOS). Please note that these figures add up to £0.8m instead of £0.7m solely due to rounding.
The shared based awards figures for 2017 disclosed in last year’s Report were, as required by the UK Regulations, based on an
estimate using prescribed average share prices and exchange rates and have been restated in this Report to reflect the actual
amount vested and the actual share prices and exchange rates on the vesting dates of the 2015–17 cycle of BIP, LTIP and ESOS. The
vesting percentages under these plans were determined on 16 February 2018 and were in line with those disclosed on page 86 in the
2017 Remuneration Report. Using the share prices and exchange rates on the vesting dates and the actual dividend equivalents paid
in respect of this cycle decreased the 2017 disclosed figure by £1,172k for Erik Engstrom and by £578k for Nick Luff.
The 2018 figures reflect the vesting of the 2016–18 cycle of BIP, LTIP and ESOS. As the BIP, LTIP and ESOS vest after the approval
date of this Report, the average share prices and exchange rates for the last quarter of 2018 have been used to arrive at an estimated
figure in respect of these awards.
The exchange rates used to convert share based awards to pounds sterling are (i) those that applied at the vesting dates or, if vesting
has not occurred at the time of sign off of this Report, the average exchange rates for the last quarter of 2018; (ii) for dividend
equivalents, the actual gross pounds sterling payment; and (iii) for estimated dividend equivalents in respect of awards for which
vesting has not occurred at the time of sign off of this Report and which are yet to be paid, the average exchange rates for the last
quarter of 2018.
(4) Erik Engstrom participates in the UK legacy defined benefit pension plan on the same basis as other UK executives who are
participants in this legacy plan and accrues 1/30th of final year pensionable earnings for every year of service up to his 60th
birthday, at which time benefits cease accruing. His annual increase in pensionable earnings is capped at 2%.
The pension figure disclosed in the table has been calculated in accordance with the prescribed methodology set out in the UK
Regulations. This figure does not represent a contribution by the Company to Mr Engstrom’s pension.
In 2018, the Company contributed £42,338 to the funded portion of Mr Engstrom’s defined benefit pension plan. The remainder of his
accrued pension is an unfunded liability of the Company. In 2018, Mr Engstrom contributed a total of £151,306 by way of contributions
and a participation fee as part of his ongoing membership of this plan. In line with all participants, his contributions and participation
fee are increasing each year. The pension figure in the table is reduced by these contributions (11% of pensionable base salary up to
the scheme earnings cap until 28 February 2018 and 13% from 1 March 2018) and the participation fee (10% of pensionable base
salary in excess of the scheme earnings cap until 28 February 2018 and 13% from 1 March 2018).
For details of Mr Engstrom’s accrued pension as at 31 December 2018, see page 92.
Nick Luff receives a cash allowance in lieu of pension which reduced from 29% of salary to 27% of salary effective 1 March 2018.
The total remuneration for Directors is set out in note 27 to the consolidated financial statements on page 162.
88 RELX Annual report and financial statements 2018 | Governance
2018 Annual Incentive
Set out below is a summary of performance against each financial measure and Key Performance Objective and the resulting annual
incentive payout for 2018:
Erik Engstrom Nick Luff
Performance
measure
Relative
weighting
% at target Achievement vs target
Payout %
of target
Payout %
of target
Revenue 35% Revenue was £7,492m versus a target
(1)
of £7,499m, resulting in
achievement versus target of 99.9% and a payout
(2)
of 98.5% of 35%.
34.5% 34.5%
Adjusted net
profit after tax
35% Adjusted net profit after tax was £1,674m versus a target
(1)
of £1,665m,
resulting in achievement versus target of 100.5% and a payout
(2)
of
105.0% of 35%.
36.8% 36.8%
Cash conversion 15% Cash flow was £2,243m (96% conversion) versus a target
(1)
of £2,182m,
resulting in achievement versus target of 102.8% and a payout
(2)
of
128.0% of 15%.
19.2% 19.2%
Key Performance
Objectives (KPOs)
(3)
15% A detailed description of the KPOs and achievement against those KPOs
for each Executive Director is set out below.
13.75% 14.5%
Total 100% 104.2% 104.9%
Total AIP payout as % of salary
Cash 100% 104.2% 104.9%
Deferred Shares 50% 52.1% 52.5%
Total 150% 156.3% 157.4%
The Cash AIP (£1,269,277 for the CEO and £752,818 for the CFO) will be paid in Q1 2019 and the Deferred Shares (with a current value of
£634,639 in the case of the CEO and £376,409 in the case of the CFO) will be released in Q1 2022. The release of Deferred Shares is not
subject to any further performance conditions, but is subject to malus and claw-back.
(1) On an equivalent basis (at actual exchange rates and after the net impact of acquisitions and disposals completed during the year).
(2) For achievement above target, each 0.1% of overachievement increased the payout ratio for that component by 1 percentage point up to a maximum payout ratio
of 150% at 105% achievement vs target. For achievement below target, each 0.1% of underachievement reduced the payout ratio by 1.5 percentage points down
to a threshold payout ratio of 10% at 94% achievement vs target.
KPOs – Erik Engstrom
KPO
Relative
weighting
% at target Achievement vs KPO
Payout %
of target
Risk Mitigation 3% This KPO was almost fully achieved.
Cyber security training provided to 100% of employees, social engineering testing (e.g.
phishing simulations) covering RELX globally completed and requirement to continue
re-training and re-testing of employees introduced. Met target.
Three cyber security incident response simulations completed at senior levels within
the business divisions; six security awareness training sessions delivered; four
penetration tests of financial integrity processes performed; lessons learned
incorporated into Incident Response Plan. Met target.
Five out of six elements of the Compliance Testing and Monitoring Plan were
completed and an In-Person Training Assessment was completed and
recommendations for implementation were agreed. Target almost fully met.
2.5%
Customers 3% This KPO was almost fully achieved.
Expanded use of customer satisfaction and loyalty metrics in business reviews and in
some of the business areas’ annual incentive plans. Target almost fully met.
RELX Accessibility awards introduced to recognise exceptional employee efforts to
advance accessibility. Met target.
Increased the number and reach of our business community working groups and
projects which focus on the advancement of the rule of law. Met target.
2.5%
People 3% This KPO was fully achieved.
Assessed and reported on employee engagement via employee opinion surveys, with
the highest employee participation rates and employee satisfaction scores in the last
15 years. Exceeded target.
Employee alignment with company strategy and values measured via employee
opinion survey and workshops held throughout the business to further drive alignment.
Met target.
New diversity and inclusion (D&I) initiatives launched/existing initiatives expanded and
indicators to track D&I progress established. Met target.
3.0%
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 89
Overview Business review Financial review Governance Financial statements and other information
KPOs – Erik Engstrom
KPO
Relative
weighting
% at target Achievement vs KPO
Payout %
of target
Process 3% This KPO was almost fully achieved.
Number of key suppliers signed up to the RELX Supplier Code of Conduct increased by 4.9%; number of
supplier audits completed remained stable; number of significant audit findings reduced; spend with
veteran and minority-owned businesses under the US Supplier D&I programme increased, with overall
spend with diverse suppliers remaining relatively flat compared to previous year. Target almost fully
met.
Continued product migration to electronic decision tools, continued addition of broader data sets and
expanded use of high performance computing cluster across all business areas. Met target.
Expanded scale of company-owned shared services by 12%. Met target.
2.75%
Environment 3% This KPO was fully achieved.
Renewable energy purchased as a percentage of total electricity consumption increased to
81%. Met target.
Over 40% of locations achieved five or more Group Environmental Standards. Exceeded target.
ISO 14001 Environmental Management System certifications achieved at three additional locations. Met
target.
3.0%
Total 15% Payout as % of salary 13.75%
KPOs – Nick Luff
KPO
Relative
weighting
% at target Achievement vs KPO
Payout %
of target
Risk
Mitigation
3% This KPO was almost fully achieved.
Cyber security training provided to 100% of employees, social engineering testing (eg phishing
simulations) covering RELX globally completed and requirement to continue re-training and re-testing
of employees introduced. Met target.
Three cyber security incident response simulations completed at senior levels within the business
divisions; six security awareness training sessions delivered; four penetration tests of financial integrity
processes performed; lessons learned incorporated into Incident Response Plan. Met target.
Five out of six elements of the Compliance Testing and Monitoring Plan were completed and In-Person
Training Assessment was completed and recommendations for implementation were agreed. Target
almost fully met.
2.5%
Corporate
Structure
Simplification
3% This KPO was exceeded.
A proposal for simplification of the Group’s corporate structure (moving from a dual to a single parent
holding company structure) was developed and proposed to shareholders for approval. The proposal
was approved by over 99.9% of shareholders of both parent companies. Significantly exceeded target.
Simplification of corporate structure completed successfully in September 2018. Met target.
Resulting new single parent company structure embedded, reducing complexity and increasing
transparency. Met target.
3.5%
Finance
Function
3% This KPO was almost fully achieved.
D&I actively promoted within the finance function resulting in increased employee diversity within the
finance function. Target almost fully met.
Gender pay equity review of the finance function completed . Met target.
Further organisational and process improvements completed within Treasury and Tax. Met target.
2.5%
Process 3% This KPO was fully achieved.
Number of key suppliers signed up to the RELX Supplier Code of Conduct increased by 4.9%; number of
supplier audits completed remained stable; number of significant audit findings reduced; spend with
veteran and minority-owned businesses under the US Supplier D&I programme increased, with overall
spend with diverse suppliers remaining relatively flat compared to previous year. Target almost fully
met.
Structure of finance function reorganised to maximise effectiveness, process simplifications completed
in several areas of finance and finance function costs reduced. Exceeded target.
Expanded scale of company-owned shared services by 12%. Met target.
3.0%
Environment 3% This KPO was fully achieved.
Renewable energy purchased as a percentage of total electricity consumption increased to 81%. Met
target.
Over 40% of locations achieved five or more Group Environmental Standards. Exceeded target.
ISO 14001 Environmental Management System certifications achieved at three additional locations. Met
target.
3.0%
Total 15% Payout as % of salary 14.5%
90 RELX Annual report and financial statements 2018 | Governance
Multi-year incentives (granted under the Remuneration Policy in effect prior to the approval by shareholders of the current
Remuneration Policy at the Annual General Meetings in April 2017)
Multi-year incentives with a performance period ended 31 December 2018 were the 2016–2018 cycles of BIP, LTIP and ESOS granted to
Executive Directors.
The Committee assessed the performance measures for these awards and made an overall assessment of underlying business
performance and other relevant factors. The vesting outcome resulting from this review is summarised below.
LTIP: 2016–18 cycle performance outcome
Performance
measure Weighting
Performance range and
vesting levels set at grant
(1)
Achievement against the
performance range
Resulting vesting
percentage
TSR over the three-year
performance period
(2)
1/3
rd
below median
median
upper quartile
0%
30%
100%
Near the upper
quartile of sterling
and euro comparator
groups and below
median of US dollar
comparator group
59.8%
Average growth in adjusted EPS over
the three-year performance period
(3)
1/3
rd
below 5% p.a.
5% p.a.
6% p.a.
7% p.a.
8% p.a.
9% p.a.
10% p.a.
11% p.a. and above
0%
33%
52.5%
65%
75%
85%
92.5%
100%
7.0% p.a. 65.0%
ROIC in the third year of the
performance period
(3)
1/3
rd
below 12.3%
12.3%
12.55%
12.8%
13.05%
13.3%
13.55%
13.8% and above
0%
33%
52.5%
65%
75%
85%
92.5%
100%
13.2%
(4)
81.0%
Total vesting percentage: 68.6%
(1) Calculated on a straight-line basis for performance between the points.
(2) In respect of the euro TSR comparator group, RELX NV shares were, subsequent to the merger of RELX NV into RELX PLC, replaced with Euronext Amsterdam
listed RELX PLC shares priced in euros and, in respect of the US dollar TSR comparator group, RELX NV ADRs were, subsequent to the merger, replaced with
RELX PLC ADRs.
(3) Growth in adjusted EPS at constant currencies and ROIC are calculated as set out in the Chief Financial Officer’s report on pages 54 to 59 and note 10 to the
consolidated financial statements on page 141, with adjustments made to remove the effect on ROIC of changes in exchange rates, pension deficits and
accounting standards over the three-year performance period.
(4) For 2018, ROIC on pages 57 to 58 of the Chief Financial Officer’s report of 13.2% is the same as ROIC under the plan methodology after adjustments for changes
in exchange rates, pension deficits and accounting standards.
BIP: 2016–18 cycle performance outcome
Performance
measure Weighting
Performance range and
vesting levels set at grant
(1)
Achievement against the
performance range
Resulting vesting
percentage
Average growth in adjusted EPS over
the three-year performance period
(2)
50% below 4% p.a.
4% p.a.
6.5% p.a.
9% p.a. or above
0%
50%
75%
100%
7.0% p.a. 80.0%
ROIC in the third year of the
performance period
(2)
50% below 12.3%
12.3%
12.8%
13.3% or above
0%
50%
75%
100%
13.2%
(3)
95.0%
Total vesting percentage: 87.5%
(1) Calculated on a straight-line basis for performance between the points.
(2) Growth in adjusted EPS at constant currencies and ROIC are calculated as set out in the Chief Financial Officer’s report on pages 54 to 59 and note 10 to the
consolidated financial statements on page 141, with adjustments made to remove the effect on ROIC of changes in exchange rates, pension deficits and
accounting standards over the three-year performance period.
(3) For 2018, ROIC on pages 57 to 58 of the Chief Financial Officer’s report of 13.2% is the same as ROIC under the plan methodology after adjustments for changes
in exchange rates, pension deficits and accounting standards.
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 91
Overview Business review Financial review Governance Financial statements and other information
ESOS: 2016–18 cycle performance outcome
Performance
measure Weighting
Performance range and
vesting levels set at grant
(1)
Achievement against the
performance range
Resulting vesting
percentage
Average growth in adjusted EPS over
the three-year performance period
(2)
100% below 4% p.a.
4% p.a.
6% p.a.
8% p.a. or above
0%
33%
80%
100%
7.0% p.a. 90.0%
(1) Calculated on a straight-line basis for performance between the stated average adjusted EPS growth percentages.
(2) Growth in adjusted EPS at constant currencies is calculated as set out in the Chief Financial Officer’s report on pages 54 to 59 and note 10 to the consolidated
financial statements on page 141.
Single Total Figure of Remuneration – Non-Executive Directors (audited)
Total fee Benefits
(1)
Total
2018 2017 2018 2017 2018 2017
Anthony Habgood £650,000 £625,000 £2,360 £2,381 £652,360 £627,381
Wolfhart Hauser £159,500 £140,000 £780 £780 £160,280 £140,780
Adrian Hennah £118,990 £90,000 £780 £780 £119,770 £90,780
Marike van Lier Lels
(2)
€126,651 €115,000 €949 €958 €127,600 €115,958
Robert MacLeod £107,000 £90,000 £780 £780 £107,780 £90,780
Carol Mills £125,000 £101,000 £1,620 £1,620 £126,620 £102,620
Linda Sanford £125,000 £90,000 £1,620 £1,620 £126,620 £91,620
Ben van der Veer
(2)
€124,696 €142,500 €949 €958 €125,645 €143,458
Suzanne Wood
(3)
£116,000 £24,000 £116,000 £24,000
(1) Benefits comprise the notional benefit of tax filing support provided to Non-Executive Directors for filings outside their home country resulting from their
directorships with RELX. The incremental assessable benefit charge per tax return for 2018 was £840 (unchanged from 2017) for a UK tax return and £780
(unchanged from 2017) for a Netherlands tax return. Anthony Habgood’s benefits also include £1,580 (£1,601 in 2017) in respect of private medical insurance.
Further, the Company meets all reasonable travel, subsistence, accommodation and other expenses, including any tax where such expenses are deemed
taxable, incurred by the Non-Executive Directors and the Chairman in the course of performing their duties.
(2) The pound sterling equivalent of the total fees and benefits for Marike van Lier Lels and Ben van der Veer (converted at the average exchange rate applicable to
the years of reporting) were £112,920 (£101,717 in 2017) and £111,190 (£125,840 in 2017) respectively for 2018. For the purposes of reporting the total fees and
benefits for these two Directors, the pound sterling benefit relating to the UK tax return preparation has been converted into euros at the average exchange rate
for the relevant year.
(3) Appointed on 26 September 2017.
(4) The total remuneration for Directors is set out in note 27 to the consolidated financial statements on page 162.
Non-Executive Directors’ fees
The fees in the Single Total Figure table for Non-Executive Directors reflect the following fees in 2018:
Annual fee 2019 Annual fee 2018
Chairman £650,000 £650,000
Non-Executive Directors £85,000 £85,000/€97,500
Senior Independent Director £30,000 £30,000
Chairman of:
– Audit Committee £30,000 £30,000/€37,500
– Remuneration Committee
Workforce engagement fee
£30,000
£17,500
£30,000
Committee membership fee:
– Audit Committee £17,500 £17,500/€20,000
– Remuneration Committee £17,500 £17,500
– Nominations Committee £10,000 £10,000/€12,500
In addition, an intercontinental travel fee of £4,500/€5,000 was payable to any Non-Executive Director (excluding the Chairman) in
respect of each transatlantic journey made in order to attend a RELX Board or Committee meeting. In 2019, this fee will be £4,500.
From 2019, we have introduced a workforce engagement fee which is payable to the Non-Executive Director who undertakes the UK
Corporate Governance Code responsibility to engage with the workforce across RELX and report back to the Board.
Fees may be reviewed annually, although in practice they have changed on a less frequent basis. There are no changes to Non-Executive
Director and Chairman fees for 2019. The last review took place at the end of 2017, as a result of which a number of changes were
approved which took effect on 1 January 2018 as set out above.
92 RELX Annual report and financial statements 2018 | Governance
Total pension entitlements (audited)
Erik Engstrom is a member of the legacy UK defined benefit
pension plan. Mr Engstrom pays contributions on the amount of
his pensionable base salary up to the scheme earnings cap, which
were 11% until 28 February 2018, 13% from 1 March 2018 and will
be 15% from 1 March 2019. He also pays a participation fee on the
amount of his pensionable base salary which exceeds the scheme
earnings cap. This fee was 10% until 28 February 2018, increased
to 13% on 1 March 2018 and will be 16% from 1 March 2019.
Mr Engstrom is also subject to a cap of 2% on annual increases
in pensionable earnings. Further details are provided in the
Remuneration Policy on page 99.
Nick Luff receives a cash allowance in lieu of pension, which
reduced from 29% of salary to 27% of salary on 1 March 2018
and reduces to 25% of salary on 1 March 2019.
Pension – Standard information Pension – UK Regulations
Age at
December
2018
Normal
retirement
age
Director’s
contributions
Participation
fee
Total of Director’s
contributions and
participation fee
Accrued annual
pension at
31 December 2017
Accrued annual
pension at
31 December 2018
Single figure
pensions value
55 60 £19,777 £131,529 £151,306 £414,683 £449,519 £545,409
(1)
(1) Net of Director’s contribution and participation fee.
Scheme interests awarded during the financial year (audited)
LTIP PERFORMANCE SHARE AWARDS
Basis on which
award is made
Face value of
award at grant
(1)
Value of awards
if vest in line with
expectations
(2)
Percentage of maximum that
would be received if threshold
performance achieved
(3)
End of
performance
period
Erik Engstrom 450% of salary £5,348,499 £2,674,250 If the measure with the lowest
payout at threshold pays out at
threshold, the overall payout
is 2%. If each measure pays out
at threshold, the overall payout
is 25%
31 December
2020
Nick Luff 375% of salary £2,624,636 £1,312,318
(1) The face value of the LTIP awards granted in February 2018 was calculated using (i) the middle market quotation of a PLC ordinary share (£14.915); (ii) the closing
price of an NV ordinary share (€16.87); and (iii) the GBP:EUR exchange rate on the trading day before the date of grant of 19 February 2018. These share prices
were used to determine the number of awards granted. Subsequent to the corporate simplification which took effect on 8 September 2018, each award over an
NV ordinary share has been exchanged for an award over the same number of PLC ordinary shares.
(2) Vesting in line with expectations for LTIP is as per the performance scenario chart disclosed on page 87 of the 2016 Remuneration Report, i.e. 50%.
(3) Threshold payout levels for each measure under LTIP have been included as it is possible to achieve threshold, and hence payout, in respect of just one of the
measures (or, for TSR, in respect of one of the three TSR comparator groups).
The LTIP awards granted in 2018 are based on ROIC, EPS and TSR weighted 40%:40%:20% respectively and assessed independently.
The targets and vesting scales applicable to these awards are set out on page 94 of the 2017 Remuneration Report.
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 93
Overview Business review Financial review Governance Financial statements and other information
External appointments
The Committee believes that the experience gained by allowing
Executive Directors to serve as Non-Executive Directors on the
boards of other organisations is of benefit to RELX.
Accordingly, Executive Directors may, subject to the approval
of the Chairman and the CEO (or the Chairman only in the case
of the CEO), serve as Non-Executive Directors on the boards of
up to two non-associated companies (of which only one may be a
major company) and they may retain remuneration arising from
such appointments.
Erik Engstrom is a Non-Executive Director of Smith & Nephew plc
and received fees of £69,500 for 2018 (£75,135 in 2017).
Nick Luff has been a Non-Executive Director of Rolls-Royce
Holdings plc since 3 May 2018, for which he received fees of
£46,159 for time served in 2018 (in 2017 he received fees of £69,007
for time served as a Non-Executive Director of Lloyds Banking
Group plc until 11 May 2017).
Payments to past Directors and payments for loss of office
(audited)
There have been no payments for loss of office in 2018.
Statement of Directors’ shareholdings and other share
interests (audited)
Shareholding requirement
The Committee believes that a closer alignment of interests can
be created between senior management and shareholders if
executives build and maintain a significant personal stake in
RELX. The shareholding requirements applicable to the Executive
Directors are set out in the table below. Shares that count for this
purpose are any type of RELX security of which the Director, their
spouse, civil partner or dependent child has beneficial ownership
on an unencumbered basis. There has been no change to the
interests reported below between 31 December 2018 and 20
February 2019.
Meeting the shareholding requirement is both a vesting condition
for LTIP awards granted and a requirement to maintain eligibility
for future LTIP awards.
On 31 December 2018, the Executive Directors’ shareholdings
were as follows (valued using the middle market closing prices of
the relevant securities):
Shareholding
requirement (% of
31 December 2018
annual base salary)
Actual shareholding
as at 31 December 2018
(% of 31 December 2018
annual base salary)
Erik Engstrom 400% 1,304%
Nick Luff 300% 594%
Share interests (number of RELX ordinary shares held)
(1)
1 January 2018 31 December 2018
Erik Engstrom 1,004,671 1,010,617
Nick Luff 260,942 265,971
Anthony Habgood 88,450 88,450
Wolfhart Hauser 14,633 14,633
Adrian Hennah 10,508 10,508
Marike van Lier Lels 8,000 8,000
Robert MacLeod 6,950 6,950
Carol Mills 9,700 9,700
Linda Sanford 9,700 9,700
Ben van der Veer 10,766 10,766
Suzanne Wood 3,500 5,100
(1) As a result of the corporate simplification to merge RELX NV into RELX PLC, which took effect on 8 September 2018, all shares in RELX NV were exchanged for
shares in RELX PLC on a one-for-one basis. Therefore, all shares owned as at 31 December 2018 are RELX PLC shares. The number of shares held by each
Director as at 1 January 2018 which were RELX PLC shares were as follows: Erik Engstrom: 200,490, Nick Luff: 124,847, Anthony Habgood: 50,000, Wolfhart
Hauser: 11,542, Adrian Hennah: 10,508, Marike van Lier Lels: 0, Robert MacLeod: 6,950, Carol Mills: 9,700, Linda Sanford: 6,700, Ben van der Veer: 0, Suzanne
Wood: 3,500. The remainder were RELX NV shares.
94 RELX Annual report and financial statements 2018 | Governance
Multi-year incentive interests (audited)
The tables below and on page 95 set out vested but unexercised and unvested options and unvested share awards held by the Executive
Directors including details of awards granted, options exercised and awards vested during the year of reporting.
All outstanding unvested options and share awards are subject to performance conditions. For disclosure purposes, any PLC ADRs
awarded under the multi-year incentive plans are included as ordinary shares. Between 31 December 2018 and the date of this Report,
there have been no changes in the options or share awards held by the Executive Directors.
As a result of the corporate simplification to merge RELX NV into RELX PLC, which took effect on 8 September 2018, all outstanding
options and awards which were granted over shares in RELX NV were exchanged for outstanding options and awards over shares in
RELX PLC priced in euros and listed on Euronext Amsterdam on a one-for-one basis.
Erik Engstrom
OPTIONS
Year of
grant
No. of
options
held on
1 Jan
2018
No. of
options
granted
during
2018
Option
price on
date of
grant
No. of
options
exercised
during
2018
Market
price per
share at
exercise
No. of
options
held on
31 Dec
2018
Unvested
options
vesting on
Options
exercisable
until
2014 145,604 £9.245 145,604 07 Apr 24
158,166 €10.286 158,166 07 Apr 24
2015
(1)
119,771 £11.520 114,584 02 Apr 25
126,358 €15.003 120,886 02 Apr 25
2016 112,690 £12.550 112,690 Mar 19 15 Mar 26
119,312 €15.285 119,312 Mar 19 15 Mar 26
2017 96,996 £14.945 96,996 Feb 20 27 Feb 27
102,405 €16.723 102,405 Feb 20 27 Feb 27
Total 981,302 970,643
SHARES
Year of
grant
No. of
unvested
shares
held on
1 Jan 2018
No. of
shares
awarded
during
2018
Market
price per
share at
award
No. of
shares
vested
during
2018
Market
price per
share at
vesting
No. of
unvested
shares
held on
31 Dec 2018
End of
performance
period
Date of
vesting
BIP 2015
(1)
97,607 €15.003 90,608 €16.870
2016 94,965 €15.285 94,965 Dec 2018 Feb 2019
2017 81,781 €16.723 81,781 Dec 2019 Feb 2020
LTIP 2015
(1)
119,771 £11.520 105,518 £14.915
126,359 €15.003 111,322 €16.870
2016 112,690 £12.550 112,690 Dec 2018 Feb 2019
119,312 €15.285 119,312 Dec 2018 Feb 2019
2017 96,996 £14.945 96,996 Dec 2019 Feb 2020
102,405 €16.723 102,405 Dec 2019 Feb 2020
2018 179,318 £14.915 179,318 Dec 2020 Feb 2021
178,482 €16.870 178,482 Dec 2020 Feb 2021
Total 951,886 357,800 307,448 965,949
(1) The performance outcomes for the 2015 ESOS options, BIP and LTIP were disclosed on pages 86 and 87 of the 2017 Remuneration Report.
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 95
Overview Business review Financial review Governance Financial statements and other information
Nick Luff
OPTIONS
Year of
grant
No. of
options
held on
1 Jan
2018
No. of
options
granted
during
2018
Option
price on
date of
grant
No. of
options
exercised
during
2018
Market
price per
share at
exercise
No. of
options
held on
31 Dec
2018
Unvested
options
vesting on
Options
exercisable
until
ESOS 2014 65,656 £9.900 65,656 02 Sep 24
72,228 €11.378 72,228 02 Sep 24
2015
(1)
56,423 £11.520 53,979 02 Apr 25
59,526 €15.003 56,948 02 Apr 25
2016 53,087 £12.550 53,087 Mar 19 15 Mar 26
56,207 €15.285 56,207 Mar 19 15 Mar 26
2017 45,694 £14.945 45,694 Mar 20 27 Feb 27
48,242 €16.723 48,242 Mar 20 27 Feb 27
Total 457,063 452,041
SHARES
Year of
grant
No. of
unvested
shares
held on
1 Jan 2018
No. of
shares
awarded
during
2018
Market
price per
share at
award
No. of
shares
vested
during
2018
Market
price per
share at
vesting
No. of
unvested
shares
held on
31 Dec 2018
End of
performance
period
Date of
vesting
BIP 2015
(1)
28,187 £11.520 26,165 £14.915
29,520 €15.003 27,403 €16.870
2016 26,543 £12.550 26,543 Dec 2018 Feb 2019
28,103 €15.285 28,103 Dec 2018 Feb 2019
2017 22,847 £14.945 22,847 Dec 2019 Feb 2020
24,121 €16.723 24,121 Dec 2019 Feb 2020
LTIP 2015
(1)
56,423 £11.520 49,708 £14.915
59,526 €15.003 52,442 €16.870
2016 53,087 £12.550 53,087 Dec 2018 Feb 2019
56,207 €15.285 56,207 Dec 2018 Feb 2019
2017 45,694 £14.945 45,694 Dec 2019 Feb 2020
48,242 €16.723 48,242 Dec 2019 Feb 2020
2018 87,996 £14.915 87,996 Dec 2020 Feb 2021
87,585 €16.870 87,585 Dec 2020 Feb 2021
Total 478,500 175,581 155,718 480,425
(1) The performance outcomes for the 2015 ESOS options, BIP and LTIP were disclosed on pages 86 and 87 of the 2017 Remuneration Report.
96 RELX Annual report and financial statements 2018 | Governance
Performance graphs
The graphs below show total shareholder returns for RELX calculated on the basis of the average share price in the 30 trading days
before the respective year end and assuming dividends were reinvested. RELX’s performance is compared with the FTSE 100. The
three-year chart covers the performance period of the 2016–18 cycle of the LTIP.
3 years 5 years 10 years
0
25
50
75
100
125
150
175
200
Dec-18
RELX vs FTSE 100 – 3-YEAR TSR
%
Dec-15
Dec-17
Dec-16
+24%
+48%
∆=24%
RELX FTSE 100
%
RELX vs FTSE 100 – 5-YEAR TSR
+26%
+109%
Dec-13
Dec-14
Dec-15
Dec-18
Dec-17
Dec-16
RELX FTSE 100
∆=83%
0
25
50
75
100
125
150
175
200
225
250
Dec-08
Dec-11
Dec-10
Dec-09
Dec-13
Dec-12
Dec-18
Dec-17
Dec-16
Dec-15
Dec-14
%
RELX vs FTSE 100 – 10-YEAR TSR
+137%
+344%
∆=207%
RELX FTSE 100
0
25
50
75
100
125
150
175
200
225
250
275
300
325
350
375
400
425
450
475
500
CEO historical pay table
The table below shows the historical CEO pay over an eleven-year period. The year 2008 has been included to show the pre-2009
position, as 2009 was a transition year with three CEO incumbents.
£’000 2008 2009
(1)
2010 2011 2012 2013 2014 2015 2016 2017 2018
CEO
Sir
Crispin
Davis
Sir
Crispin
Davis
Ian
Smith
Erik
Engstrom
Erik
Engstrom
Erik
Engstrom
Erik
Engstrom
Erik
Engstrom
Erik
Engstrom
Erik
Engstrom
Erik
Engstrom
Erik
Engstrom
Erik
Engstrom
Annualised
base salary
1,181 1,181 900 1,000 1,000 1,025 1,051 1,077 1,104 1,131 1,160 1,189 1,218
Annual incentive
payout as a %
of maximum
61% 30% 37% 71% 67% 66% 73% 70% 71% 70% 68% 69% 78%
Multi-year
incentive vesting
as a % of
maximum
100% 0% 0% 0% 0% 0% 70%
(2)
96%
(2)
90%
(2)
97%
(2)
97%
(2)
92%
(2)
81%
(2)
CEO total 7,193 706 1,033 426 3,140 2,738 11,145
(3)
5,463 17,447
(4)
11,416
(5)
11,399
(6)
8,748
(7)
8,414
(8)
(1) Sir Crispin Davis was CEO from 1 January to 31 March, Ian Smith was CEO from 1 April to 10 November and Erik Engstrom was CEO from 11 November
to 31 December.
(2) The 2018, 2017, 2016 and 2015 percentages reflect BIP, LTIP and ESOS. The 2014 percentage reflects the final tranche of the discontinued Reed Elsevier Growth
Plan (REGP), BIP and ESOS. The 2013 percentage reflects BIP and ESOS only and the 2012 figure reflects BIP and the first tranche of the discontinued REGP.
(3) The 2012 figure reflects the vesting of the first tranche of the discontinued REGP and includes the entire amount that was performance tested over the 2010–12
period, including the 50% of shares deferred until 2015 in accordance with the plan rules including £3m attributed to share price appreciation.
(4) The 2014 figure includes the vesting of the second and final tranche of the discontinued REGP and includes £8.8m attributed to share price appreciation.
(5) The 2015 figure includes £4.4m attributed to share price appreciation.
(6) The 2016 figure includes £4.2m attributed to share price appreciation.
(7) The 2017 figure includes £1.7m attributed to share price appreciation. The share award value has been restated for actual share prices and exchange rates
applicable on the dates of vesting (see page 87 for further detail).
(8) The 2018 figure includes £1.5m attributed to share price appreciation.
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 97
Overview Business review Financial review Governance Financial statements and other information
Comparison of change in CEO pay with change in employee pay
The table below shows the percentage change in remuneration
(salary, benefits and annual cash incentive) from 2017 to 2018 for
the CEO compared with the average employee.
% change from 2017 to 2018
CEO
Average
employee
(1)
Salary 2.5%
(2)
3.0%
Benefits 0.2% 3.1%
Annual cash incentive
2.5%
(3)
3.1 %
(1) The average employee for salary and benefits has been determined based
on a review of employees in our top five countries by number of employees.
This represents over 70% of the total employee population. The average
employee for annual cash incentive is based on all employees globally who
received an annual cash incentive. The average salary increase in the UK,
where the CEO is based, was 2.5%.
(2) The salary increase for the CEO was 2.5%. However, when the increase in
his pension contributions and participation fee are taken into account, his
salary after these deductions decreased by 0.6% between 2017 and 2018.
(3) As part of the simplified incentive structure for Executive Directors which
was approved by shareholders at the April 2017 Annual General Meetings,
with effect from 2018, a deferred share component was added to the AIP.
This was to partly offset the discontinuation of the BIP. The percentage
shown for the CEO in the table above relates to the cash AIP. If the deferred
share component, which will be paid out in Q1 2022, is included in the 2018
AIP value, the percentage change from 2017 to 2018 for the CEO would be
53.8%. In the table above, the deferred share component of the AIP for
senior management is also excluded from the calculation of the average
employees’ AIP.
Relative importance of spend on pay
The following table sets out the total employee costs for all
employees, as well as the amounts paid in dividends and share
repurchases.
2018
£m
2017
£m
% change
Employee costs
(1)
2,350 2,273 +3%
Dividends 796 762 +4%
Share repurchases 700 700 –
(1) Employee costs include wages and salaries, social security costs, pensions
and share based and related remuneration.
Implementation of remuneration policy in 2019
Salary: The Committee has awarded a salary increase of 2.5% to
each Executive Director, which means that, from 1 January 2019,
Erik Engstrom’s salary rose to £1,248,863 and Nick Luff’s salary to
£735,415. This is in line with the guidelines for 2019 for the general
UK-based employee population. When the increases in the CEO’s
pension contributions and participation fee are taken into account,
his salary after these deductions will decrease again in 2019
compared to 2018.
Benefits: The benefits provided to the Executive Directors are
unchanged for 2019.
Annual incentive: The operation of the AIP in 2019 will be in
accordance with the terms of the policy set out on page 100 of this
Report. Details of the 2019 annual financial targets and KPOs will
be disclosed in the 2019 Remuneration Report.
Pension: Erik Engstrom’s contributions to the pension plan on the
amount of his pensionable base salary up to the scheme earnings
cap increase from 13% to 15% from 1 March 2019 and his
participation fee, which he pays on the amount of his pensionable
earnings above the scheme earnings cap, increases from 13% to
16% from 1 March 2019 and will increase further in 2020. Mr
Engstrom is also subject to a 2% cap on annual increases in
pensionable earnings. The CFO’s cash allowance in lieu of pension
reduces from 27% to 25% of salary from 1 March 2019 and will
reduce below 25% in 2020.
Share based awards: As in 2018, we will be granting LTIP awards
with face values of 450% of salary to Erik Engstrom and 375%
to Nick Luff in 2019. The awards are subject to a three-year
performance period and the net (after tax) vested shares are to be
retained for a further two-year holding period.
The following metrics, weightings, targets and vesting scales
apply to LTIP awards granted in 2019.
The vesting of LTIP awards is dependent on three separate
performance measures: ROIC, EPS and TSR weighted
40%:40%:20% respectively and assessed independently.
The TSR measure comprises three comparators (sterling, euro
and US dollar) reflecting the fact that RELX accesses equity
capital markets through three exchanges – London, Amsterdam
and New York – in three currency zones. RELX’s TSR performance
is measured separately against each comparator group and
each ranking achieved will produce a payout, if any, in respect of
one-third of the TSR measure. The proportion of the TSR measure
that vests will be the sum of the three payouts.
The averaging period applied for TSR measurement purposes is
the three months before the start of the financial year in which the
award is granted and the last three months of the third financial
year of the performance period.
The companies for the TSR comparator groups for the 2019–21
LTIP cycle were selected on the following basis (substantially
unchanged from prior year):
(a) they were in a relevant market index or were the largest listed
companies on the relevant exchanges at the end of the year
before the start of the performance period: the FTSE 100 for
the sterling group; the Euronext100 (including the AEX) and
DAX30 for the euro group; and the S&P 500 for the US dollar
group;
(b) certain companies were then excluded:
those with mainly domestic or single country revenues (as
they do not reflect the global nature of RELX’s customer
base);
those engaged in extractive industries (as they are exposed
to commodity cycles); and
financial services companies (as they have a different risk/
reward profile).
(c) the remaining companies were then ranked by market
capitalisation and, for each comparator group, up to 50
companies with market capitalisations above and below that
of RELX were taken; and
(d) relevant listed global peers operating in businesses similar to
those of RELX, but not otherwise included, were added.
98 RELX Annual report and financial statements 2018 | Governance
Vesting percentage of each third
of the TSR tranche
(1)
TSR ranking within the relevant
TSR comparator group
0% Below median
25% Median
100% Upper quartile
(1) Vesting is on a straight-line basis for performance between the minimum
and maximum levels.
The calculation methodology for the EPS and ROIC measures
is set out in the footnotes on page 90 and in the 2013 Notices of
Annual General Meetings, which can be found on RELX’s website.
The targets and vesting scales applicable to the EPS and ROIC
tranches of the 2019 LTIP awards reflect the company’s approach
to acquisitions, disposals and share buybacks and are
set out below. The ROIC targets for the 2019 LTIP awards reflect
the adoption of IFRS 16 (lease accounting), which effectively makes
the ROIC targets 20 basis points higher than under previous
accounting standards.
Vesting percentage
of EPS and ROIC
tranches
(1)
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 12.0%
25% 5% p.a. 12.0%
50% 6% p.a. 12.4%
65% 7% p.a. 12.8%
75% 8% p.a. 13.2%
85% 9% p.a. 13.6%
92.5% 10% p.a. 14.0%
100% 11% p.a. or above 14.4% or above
(1) Vesting is on a straight-line basis for performance between the stated
average adjusted EPS growth/ROIC percentages.
Remuneration Committee advice
The Committee consists of independent Non-Executive Directors
and the Chairman of RELX. Details of members and their
attendance are contained in the Corporate Governance section
on page 78. The Chief Legal Officer & Company Secretary attends
meetings as secretary to the Committee. At the invitation of the
Chairman of the Committee, the CEO attends appropriate parts
of the meetings. The CEO is not in attendance during discussions
about his remuneration.
The Chief Human Resources Officer advised the Committee
during the year.
Willis Towers Watson is the external adviser, appointed by
the Committee through a competitive process. Willis Towers
Watson also provided actuarial and other human resources
consultancy services to some RELX companies during the year.
The Committee is satisfied that the firm’s advice continues to be
objective and independent, and that no conflict of interest exists.
The individual consultants who work with the Committee do
not provide advice to the Executive Directors, or act on their
behalf. Willis Towers Watson is a member of the Remuneration
Consultants’ Group and conducts its work in line with the UK Code
of Conduct for executive remuneration consulting. During 2018,
Willis Towers Watson received fees of £10,500 for advice given to
the Committee, charged on a time and expense basis.
Shareholder voting at 2018 Annual General Meeting
At the Annual General Meeting of RELX PLC, on 19 April 2018, votes cast by proxy and at the meeting in respect of the Directors’
remuneration were as follows:
Resolution Votes For % For Votes Against % Against Total votes cast Votes Withheld
Remuneration Report (advisory) 562,551,352 83.62% 110,216,944 16.38% 672,768,296 169,795,175
Wolfhart Hauser
Chairman, Remuneration Committee
20 February 2019
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 99
Overview Business review Financial review Governance Financial statements and other information
Set out in this section is a description of the Company’s remuneration policy for Directors, as approved by shareholders at the April 2017
Annual General Meetings. Its wording has been updated solely to reflect the passage of time since the policy was first published and the
corporate simplification to merge RELX NV into RELX PLC, which took effect on 8 September 2018. The original wording, as first
published, can be found on pages 84 to 90 of the 2016 Annual Reports and Financial Statements.
Remuneration policy table – Executive Directors
All footnotes to the policy table can be found on pages 101 to 102.
ANNUAL BASE SALARY
Purpose and link to strategy
To recruit and retain the best executive talent globally to execute our strategic objectives at appropriate cost.
Operation
Salaries for Executive Directors are set and reviewed annually by the Remuneration Committee (the Committee) with changes typically
taking effect on 1 January. In exceptional circumstances, the Committee may review salaries more frequently.
When reviewing salaries, the Committee considers the executive’s role and sustained value to the company in terms of skill, experience
and overall contribution and the Company’s guidelines for salaries for all employees for the year. Periodically, competitiveness with
companies which are comparable in respect of industry, size, international scope and complexity is also considered in order to ensure
the Company’s ability to attract and retain executives.
For the last seven years, Executive Directors’ salary increases have been 2.5% per annum.
Performance framework
N/A
Maximum value
Salary increases to Executive Directors will remain within the range of increases for the wider employee population. However, the
Committee has discretion to exceed this to take account of individual circumstances such as change in responsibility, increases in scale
or complexity of the business, inflation or alignment to market level.
Recovery of sums paid
No provision.
RETIREMENT BENEFITS
Purpose and link to strategy
Retirement plans are part of remuneration packages designed to recruit and retain the best executive talent at appropriate cost.
Operation
Our policy is to offer competitive long-term sustainable defined contribution plans. Any amount above applicable limits, for example
HMRC’s annual allowance in the UK, will be paid in cash and will be subject to tax and social security deductions. In certain
circumstances, executives can take cash instead of pension contributions.
The UK defined benefit schemes are closed to new hires. Continued membership of legacy defined benefit schemes requires annual
increases to contributions and participation fees from all members, who have a choice to switch to the defined contribution plan at any time.
The CEO is a member of a UK legacy defined benefit pension arrangement, accruing 1/30th of final year pensionable earnings for each
year (pro-rated for part years) of service, with a normal retirement age of 60. In line with all UK defined benefit scheme members, the
CEO’s contributions have been increasing annually since 2011 and were 13% of pensionable earnings up to the base scheme’s earnings
cap as of 1 March 2018. The contribution rate increases by two percentage points each year during the policy period to 15% as of 1 March
2019 and 17% as of 1 March 2020. The CEO also pays a participation fee which, from 1 March 2018, was 13% of the amount of his
pensionable earnings in excess of the base scheme’s earnings cap. The participation fee increases by three percentage points each year
during the policy period to 16% as of 1 March 2019 and 19% as of 1 March 2020. In addition, since March 2017, a cap applies of 2% per
annum on the increase in the CEO’s pensionable earnings.
Performance framework
N/A
Maximum value
Defined contribution plan – maximum company contribution of 25% of salary per annum or equivalent cash in lieu. The CFO received
30% of salary under an arrangement which was made pursuant to the previous remuneration policy, which contained a 30% of salary
maximum. During the policy period, the CFO’s company contribution decreased by one percentage point to 29% from March 2017, by two
percentage points to 27% from March 2018 and will decrease by a further two percentage points to 25% from March 2019.
Defined benefit scheme – accrual of 1/30th of final year pensionable earnings for every year of service up to a maximum of 2/3rds of
pensionable earnings. As noted above under ‘Operation’, the CEO is subject to increases in his contributions and in the participation fee,
as well as a cap on annual increases in pensionable earnings, as part of his ongoing membership of this scheme.
Recovery of sums paid
No provision.
Remuneration Policy Report
100 RELX Annual report and financial statements 2018 | Governance
OTHER BENEFITS
Purpose and link to strategy
To provide competitive benefits at appropriate cost.
Operation
Other benefits, subject to periodic review, may include private medical and dental cover, life assurance, tax return preparation costs,
car benefits, directors’ and officers’ liability insurance, relocation benefits and expatriate allowances and other benefits available to
employees generally, including, where appropriate, the tax on such benefits.
Performance framework
N/A
Maximum value
The maximum for ongoing benefits for Executive Directors will not normally exceed 10% of salary (excluding relocation benefits and any
tax related charge on benefits which is met by the Company). However, the Committee may provide reasonable benefits beyond this
amount in exceptional situations, such as a change in the individual’s circumstances caused by the Company, or if there is a significant
increase in the cost of providing the agreed benefit.
1
AIP (ANNUAL INCENTIVE PLAN)
Purpose and link to strategy
The annual incentive provides focus on the delivery of annual financial targets and the achievement of annual objectives and milestones
which are chosen to align with the company’s strategy and create a platform for sustainable future performance. The compulsory
deferral of one-third of any annual incentive earned into RELX shares for three years promotes longer-term alignment of Executive
Directors’ interests with shareholders’ interests, including an element of post-termination shareholding.
Why performance measures are chosen and how targets are set
Performance measures include a balanced set of financial targets and Key Performance Objectives (KPOs), which are appropriately
weighted and which support current strategy and incentivise the Executive Directors to achieve the desired outcomes without undue risk
of focusing on any one financial measure.
The targets are designed to be challenging. They are set with reference to the previous year’s performance and internal and external
forecasts for the following year.
Operation
The Committee reviews and sets the financial targets and KPOs annually, taking into account internal forecasts and strategic plans. It
approves four to six KPOs for each Executive Director, reflecting critical business priorities for which each is accountable. At least one
KPO will relate to the achievement of sustainability targets.
Following year end, the Committee compares actual performance with the financial targets and assesses the achievement of individual
KPOs. Two-thirds of any annual incentive earned is paid in cash to the Executive Director and the remaining one-third is deferred into
RELX shares, which are not released to the Executive Director for three years.
Dividend equivalents accrued during the deferral period are payable in respect of the shares that vest.
On a change in control, the default position is that deferred shares vest. Alternatively, the Committee may determine that deferred
shares will not vest and will instead be exchanged for equivalent awards in the acquiring company.
Performance framework
The measures include financial targets, which have a weighting of at least 70%, and individual KPOs, with each element assessed
separately.
The minimum payout is zero.
If threshold is reached for each of the financial measures, the overall payout for the financial measures is 10.5% of salary. If the
financial measure with the lowest weighting pays out at threshold and the others do not pay out at all, the overall payout for financial
measures is 1.5% of salary. There is no threshold level for KPOs.
Payout for target performance is 150% of salary.
Following an assessment of achievement and scoring of KPOs, the Committee agrees the overall level of earned incentive for each
Executive Director.
Committee discretion applies.
2,3,4
Maximum value
The maximum potential annual incentive is 200% of annual base salary. This includes the deferred share element but excludes dividend
equivalents payable in respect of the deferred shares.
Recovery of sums paid
Claw-back applies.
5
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 101
Overview Business review Financial review Governance Financial statements and other information
LONG TERM INCENTIVE PLAN
Purpose and link to strategy
The Long Term Incentive Plan (LTIP) is designed to provide a long-term incentive for Executive Directors to achieve the key performance
measures that support the company’s strategy, and to align their interests with shareholders.
Why performance measures are chosen and how targets are set
Our strategic focus is on continuing to transform the core business through organic investment and the build out of new products
into adjacent markets and geographies, supplemented by selective portfolio acquisitions and divestments. The performance
measures in the LTIP are chosen to support this strategy by focusing on sustained earnings growth, return on invested capital and
shareholder return.
Targets are set with regard to previous results and internal and external forecasts for the performance period and the strategic plan for
the business. They are designed to provide exceptional reward for exceptional performance, whilst allowing a reasonable expectation
that reward at the lower end of the scale is attainable, subject to robust performance.
Operation
Annual awards of performance shares, with vesting subject to:
performance measured over three financial years
continued employment (subject to the provisions set out in the Policy on payments for loss of office section)
meeting shareholding requirements (400% of salary for the CEO and 300% of salary for the CFO)
Executive Directors are to retain their net (after tax) vested shares for a holding period of two years after vesting.
Dividend equivalents accrued during the performance period are payable in respect of the performance shares that vest.
On a change of control, the default position is that awards vest on a pro-rated basis, subject to an assessment of performance against
targets at that time. Alternatively, the Committee may determine that the awards will not vest and will instead be exchanged for
equivalent awards in the acquiring company.
Performance framework
The performance measures are EPS, ROIC and relative TSR, weighted 40%:40%:20% respectively and assessed independently, such
that a payout can be received under any one of the measures (or, for TSR, in respect of one of the three comparator groups).
The minimum payout is zero.
If each of the measures vests at threshold, the overall payout is 25% of the award. If the measure with the lowest weighting vests at
threshold and the others do not vest at all, the overall payout is 2% of the award.
Payout in line with expectations is 50% of the maximum award.
Dividend equivalents are not taken into account in the above payout levels.
Committee discretion applies.
2,3,4
Maximum value
The maximum grant in any year is up to 450% of base salary for the CEO and up to 375% of base salary for other Executive Directors (not
including dividend equivalents).
Recovery of sums paid
Claw-back applies.
5
(1) Other benefits: Maximum value was increased from 5% under the previous policy to 10% under the current policy to reflect increases in the cost of providing the
agreed benefits. The level of benefits provided to Executive Directors was not changed.
(2) Discretion in respect of AIP and LTIP payout levels: In determining the level of payout under the AIP and vesting under the LTIP, the Committee takes into
account RELX’s overall business performance and value created for shareholders over the period in review and other relevant factors. It has discretion to adjust
the vesting and payout levels (subject always to the maximum individual limits) if it believes this would result in a fairer outcome. This discretion will only be
used in exceptional circumstances and the Committee will explain in the next Remuneration Report the extent to which it has been exercised and the reasons
for doing so.
(3) Discretion to vary performance measures under the AIP and the LTIP: The Committee may vary the financial measures applying to a current annual incentive
year and performance measures for LTIP awards already granted if a change in circumstances leads it to believe that the arrangement is no longer a fair
measure of performance. Any new measures will not be materially less, or more, challenging than the original ones.
(4) Discretion on termination of employment under the AIP and the LTIP: The Committee’s discretion on termination of employment is described under the ‘Policy
on payments for loss of office’ section on page 104.
(5) Malus and claw-back under the AIP and the LTIP: Under the AIP and the LTIP, the Committee has discretion to apply malus and claw-back (i) if the payout
(including the AIP deferred shares element) was calculated on the basis of materially misstated financial or other data, in which case it can withhold a payout
and can seek to recover the difference in value between the incorrect payout and the amount that would have been paid had the correct data been used or (ii) if
there has been serious misconduct on the part of the individual, in which case the Committee may withhold an AIP payout, lapse unvested LTIP awards and may
require repayment of AIP and LTIP gains arising during a specified period. Under the LTIP, the Committee also has discretion to apply malus and claw-back if a
participant breaches post-termination restrictive covenants, in which case unvested awards would lapse and the Committee may require repayment of gains
arising during the period beginning six months before termination and ending on the date the post-termination restrictive covenants are stated to expire.
Serious misconduct has been added as a trigger event under the AIP and the LTIP since the previous policy to increase the circumstances in which we can apply
malus and claw-back.
102 RELX Annual report and financial statements 2018 | Governance
(6) Explanation of differences between the company’s policy on Executive Directors’ remuneration and the policy for other employees: Incentives: A larger
percentage of Executive Directors’ remuneration is performance related than that of other employees. All managers participate in an annual incentive plan,
but participation levels, measures and targets vary according to their role, seniority and local business priorities. Approximately 100 senior executives
currently participate in the LTIP and about 1,000 participate in the Executive Share Option Scheme (ESOS). Grant levels under the plans vary according to role
and seniority. In considering the remuneration policy for Executive Directors, under which the Executive Directors only participate in the AIP and the LTIP, the
Committee considered the incentive plan participation for the wider senior management population. Other benefits: The range and level of retirement and other
benefits provided to employees vary according to role, seniority and local market practice. This is to ensure that we provide competitive packages which are
appropriate to specific roles. In reducing the maximum company contribution for Executive Directors under the defined contribution pension plan, the
Committee took into account the contribution rates for Executive Directors and for the wider employee population.
(7) Changes to pay components: The changes which were made since the previous remuneration policy, together with the rationale for the changes, are described
in the Committee Chairman’s introduction on pages 81 to 83 of the Annual Reports and Financial Statements 2016 and in notes 1 and 5 above.
Remuneration outcomes in different performance scenarios
The Committee considers the level of remuneration that may be paid in the context of the performance delivered and value added for
shareholders. The charts below are an illustration of how the CEO’s and CFO’s regular annual remuneration could vary under different
performance scenarios. The salary, benefits and pension levels are the same in all three scenarios in each chart. Salary is based on 2017
salary. Benefits is based on the 2016 Single Total Figure table. Pension, annual incentive and LTIP are all based on the policy table’s award
levels and percentages applied to the 2017 salary. Annual incentive amounts include the one-third portion which is subject to compulsory
deferral into RELX shares for three years, although the deferral portion is separately identified within the annual incentive amount in the
charts. The performance assumptions which have been used are as follows: Minimum means no AIP payout and no LTIP vesting. In line with
expectations means AIP payout at 150% of salary (of which one-third is deferred into shares) and LTIP vesting at half of the award. Maximum
means AIP payout at 200% of salary (of which one-third is deferred into shares) and LTIP vesting at 100% of the award.
No share price movement is assumed and any dividend equivalents payable in respect of the AIP deferred shares and the LTIP are
not included.
1,937
42%
9,664
100%
6,395
30%
28%
20%
25%
55%
LTIP
AIP deferred
AIP cash
Salary, benefits, pension
LTIP
AIP deferred shares
AIP cash
Salary, benefits, pension
CEO REMUNERATION (£’000)
In line with
expectations
Minimum Maximum
890
100%
3,253
28%
32%
40%
4,915
18%
29%
53%
LTIP
AIP deferred shares
AIP cash
Salary, benefits, pension
CFO REMUNERATION (£’000)
In line with
expectations
Minimum Maximum
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 103
Overview Business review Financial review Governance Financial statements and other information
Approach to recruitment remuneration – Executive Directors
When agreeing the components of a remuneration package on the appointment of a new Executive Director, or an internal promotion
to the Board, the Committee would seek to align the package with the remuneration policy stated in the policy table. However, on an
internal promotion to the Board, any existing contractual obligations and commitments may continue to be honoured, even if not
consistent with the prevailing policy. For example, if the individual is a member of the legacy defined benefit pension scheme, the
Committee will consider the pension arrangements in the context of the package as a whole and may allow continued participation.
The Committee’s general principle on recruitment is to offer a competitive remuneration package to attract high-calibre candidates
from a global talent pool. Basic salary would be set at an appropriate level for the candidate, taking into account all relevant factors.
As a data analytics and technology-driven business, with half of its revenue in the US, the Company primarily competes for talent with
US-based information and technology companies.
The various components and the Company’s approach are as follows:
Standard package on recruitment*
To offer remuneration in line with the policy table (including the limits), taking into account the principles set out above.
Compensation for forfeited entitlements
The Committee may make awards and payments on hiring an external candidate to compensate him or her for entitlements forfeited
on leaving the previous employer. If such a decision is made, the Committee will attempt to reflect previous entitlements as closely as
possible using a variety of tools, including cash and share based awards. Malus and claw-back provisions will apply where appropriate.
If necessary to facilitate the grant of awards, the Committee may rely on the one person exemption from shareholder approval in the UK
Listing Rules.
Relocation allowances and expenses
The type and size of relocation allowances and expenses will be determined by the specific circumstances of the new recruit.
* The standard package comprises annual base salary, retirement benefits, other benefits, AIP and LTIP.
Shareholding requirement
The Executive Directors are subject to shareholding requirements. These are a minimum of 400% of annual base salary for the CEO and
300% of annual base salary for other Executive Directors. On joining or promotion to the Board, Executive Directors are given a period of
time, typically up to five years, to build up to their requirement.
Policy on payments for loss of office
In line with the company’s policy, the service contracts of the existing Executive Directors contain 12-month notice periods.
The circumstances in which an Executive Director’s employment is terminated will affect the Committee’s determination of any
payment for loss of office, but it expects to apply the principles outlined in the table on the next page. The Committee reserves the right
to depart from these principles where appropriate in light of any taxation requirements to which the Company or the Executive Director
is subject (including, without limitation, section 409A of the US Internal Revenue Code), or other legal obligations. Treatment of legacy
awards granted under multi-year incentive plans in which the Executive Directors no longer participate will be in accordance with those
plans and the policy on payments for loss of office summarised in the Remuneration Policy Report in the 2013 Annual Reports and
Financial Statements.
104 RELX Annual report and financial statements 2018 | Governance
Policy on payments for loss of office (continued)
GENERAL
1
INCENTIVES
Mutually agreed termination/termination by the Company other than for cause
2
The Executive Director would be entitled to salary, benefits
and other contractual payments in the normal way up to the
termination date and would be paid for any accrued but
untaken holiday.
Salary: Payment of up to 12 months’ salary to reflect the notice
period or payment in lieu of notice.
Other benefits: Where possible, benefits would be continued for
up to the duration of any unworked period of notice (not exceeding
the maximum stated in the policy table) or the Executive Director
would receive a cash payment (not exceeding the cost to the
company of providing those benefits).
Pension: Deferred or immediate pension in accordance with
scheme rules, with a credit in respect of, or payment for up to, the
full period of any unworked period of notice. There is provision
under the defined benefit pension scheme for members leaving
company service by reason of permanent incapacity to make an
application to the scheme trustee for early payment of
their pension.
Other: The company may pay compensation in respect of any
statutory employment rights and may make other appropriate
and customary payments.
The company would have due regard to principles of mitigation
of loss. Reductions would be applied to reflect any portion of the
notice period that is worked and/or spent on gardening leave.
On injury, disability, ill-health or death, the Committee reserves
the right to vary the treatment outlined in this section.
Annual incentive: Any unpaid annual incentive for the previous year
and a pro-rata payment in respect of the part of the financial year
up to the termination date would generally be payable (subject to
the deferral provisions), with the amount being determined by
reference to the original performance criteria. However, the
Committee has discretion to decide otherwise depending on the
reason for termination and other specific circumstances. The
company would not pay any annual incentive in respect of any part
of the financial year following the termination date (e.g. for any
unworked period of notice). Any unvested AIP deferred shares
would vest in full at the end of the deferral period. The annual
incentive claw-back provisions would apply.
LTIP: The default position is that unvested LTIP awards would be
pro-rated to reflect time employed and would vest subject to
performance measured at the end of the relevant performance
period and subject to the Executive Director continuing to meet his
shareholding requirement on a pro-rated basis. The Committee
has discretion to allow unvested LTIP awards to vest earlier and
to adjust the application of time pro-rating and performance
conditions, subject to the plan rules.
Employee instigated resignation
The Executive Director would not receive any payments for loss of
office. The Executive Director would be entitled to salary, benefits
and other contractual payments in the normal way up to the
termination date and would be paid for any accrued but
untaken holiday.
Pension: A deferred or immediate pension would be payable
in accordance with the scheme rules.
Annual incentive: The Executive Director would be entitled to
receive an annual incentive for a completed previous year (subject
to the deferral provisions), but not a pro-rated annual incentive
in respect of a part year up to the termination date, unless the
Committee decides otherwise in the specific circumstances. Any
unvested AIP deferred shares would vest in full at the end of the
deferral period. Annual incentive claw-back provisions would apply.
LTIP: All outstanding LTIP awards would lapse on the date of notice.
Dismissal for cause
The Executive Director would be entitled to salary, benefits and
other contractual payments in the normal way up to the
termination date and would be paid for any accrued but untaken
holiday, but would not receive any payments for loss of office.
Pension: A deferred or immediate pension would be payable in
accordance with the scheme rules.
Annual incentive: The Executive Director would not receive any
unpaid annual incentive. Any unvested AIP deferred shares lapse
on the date of dismissal.
LTIP: All outstanding LTIP awards would lapse on the date
of dismissal.
(1) In addition to what is set out in this section, on termination for any reason, Erik Engstrom will be entitled to payment of amounts held in his ‘Retirement Account’.
Before he joined the company’s UK defined benefit scheme, he was not a member of any company pension scheme and RELX made annual contributions of
19.5% of base salary to a deferred compensation plan. Contributions to this Retirement Account ceased when he became a member of the UK defined benefit
arrangement.
(2) In cases where the approved leaver treatment applies, the AIP and LTIP have a default position as well as giving the Committee discretion to adjust the default
treatment within certain parameters. The Committee would only expect to exercise such discretion where the Committee believes the personal circumstances
of the Executive Director so require.
RELX Annual report and financial statements 2018 | Directors’ Remuneration Report 105
Overview Business review Financial review Governance Financial statements and other information
Remuneration policy table – Non-Executive Directors
FEES
Purpose and link to strategy
To enable RELX to recruit Non-Executive Directors with the right balance of personal skills and experience to make a major contribution
to the Board and Committees of a global business which is listed in London, Amsterdam and New York.
Operation
RELX Chairman: Receives an aggregate annual fee with no additional fees, for example, Committee Chairman fees. The Committee
determines the Chairman’s fee on the advice of the Senior Independent Director.
Other Non-Executive Directors: Receive an aggregate annual fee. Additional fees are payable to the Senior Independent Director and
Committee Chairmen. Fees are also payable for membership of Board Committees and, with effect from 1 January 2018, international
travel fees. In future, attendance fees may be paid. The Board determines the level of fees, subject to applicable law.
Fees may be reviewed annually, although in practice they have changed on a less frequent basis. When reviewing fees, consideration is
given to the time commitment required, the complexity of the role and the calibre of the individual. Periodically, comparative market data
is also reviewed, the primary source for which is the practice of FTSE 30 companies, with reference also to the Euronext Amsterdam
(AEX) index and US-listed companies.
Maximum value
The aggregate annual fee limit for fees paid to the Chairman and the Non-Executive Directors is £2m. Additional fees for membership of
or chairing Board Committees and assuming additional responsibilities such as acting as Senior Independent Director, are not subject to
this maximum limit.
OTHER BENEFITS
Purpose and link to strategy
To provide competitive benefits at appropriate cost.
Operation
Other benefits for Non-Executive Directors are reviewed periodically and may include private medical cover, tax return preparation
costs, secretarial benefits, car benefits, travel and related subsistence costs, including, where appropriate, the tax on such benefits.
Maximum value
There is no prescribed maximum amount.
Approach to recruitment remuneration –
Non-Executive Directors
Following recruitment, a new Non-Executive Director will be
entitled to fees and other benefits in accordance with the
Company’s remuneration policy. No additional remuneration is
paid on recruitment. However, any reasonable expenses incurred
during the recruitment process will be reimbursed.
Policy on payments for loss of office – Non-Executive Directors
In addition to unpaid accrued fees, the Non-Executive Directors
are entitled to receive one month’s fees for loss of office if their
appointment is terminated before the end of its term.
Service contracts and letters of appointment
There are no further obligations in the Directors’ service contracts
and letters of appointment which are not otherwise disclosed in
this Report which could give rise to a remuneration payment or
loss of office payment. All Directors’ service contracts and letters
of appointment are available for inspection at the Company’s
registered office. The Executive Directors’ service contracts do
not have a fixed expiry date.
Consideration of employment conditions elsewhere
in the company
When the Committee reviews the Executive Directors’ salaries
annually, it takes into account the Company’s guidelines for
salaries for all employees for the forthcoming year. We do not
currently use any other remuneration comparison metrics when
determining the quantum and structure of Directors’ pay. We have
not consulted with employees in connection with our policy on
Directors’ remuneration.
Consideration of shareholder views
Our practice is to consult shareholders and consider their views
when formulating, or changing, our policy. Before the current
policy was approved by shareholders at the 2017 AGMs, the
Committee consulted extensively with shareholders (representing
a total of over 45% of the company’s combined PLC and NV issued
share capital) and shareholder representative bodies in the UK,
the Netherlands and the US on the proposed new remuneration
policy. We were grateful for the constructive feedback, which was
taken into account in our final proposals.
Previous remuneration policy and prior commitments
Any payments which are still to be made under arrangements
made and awards granted under the previous remuneration
policy (which is included in the 2013 Annual Reports and Financial
Statements and was approved by RELX PLC shareholders at the
2014 Annual General Meeting) will be made consistent with that
policy. The provisions of the previous policy which relate to
arrangements and awards granted under the previous policy will
therefore continue to apply until all payments in relation to those
arrangements and awards have been made.
The Committee also reserves the right to make any remuneration
or loss of office payments if the terms were agreed prior to the
approval of the previous policy or prior to an individual being
appointed as a Director.
106 RELX Annual report and financial statements 2018 | Governance
This report has been prepared by the Audit Committee of
RELX PLC and has been approved by the Board. It provides
an overview of the membership, responsibilities and activities
of the Committee.
Membership
The Committee comprises at least three independent
Non-Executive Directors. The members of the Committee
who served during the year were:
Adrian Hennah (Chairman of the Committee from
19 April 2018)
Ben van der Veer (Chairman until 19 April 2018, member
until 1 September 2018)
Marike van Lier Lels
Carol Mills
Suzanne Wood
Of the current members of the Committee, Adrian Hennah, a
UK chartered accountant and Suzanne Wood, a US chartered
accountant are considered to have significant, recent and
relevant financial experience.
The Committee as a whole is deemed to have competence
relevant to the sectors in which RELX operates.
Please see pages 66 and 67 for full profiles of Audit Committee
members.
Responsibilities
The main role and responsibility of the Committee is to assist
the Board in fulfilling its oversight responsibilities regarding:
the integrity of the interim and full-year financial
statements and financial reporting processes;
risk management and internal controls, and the
effectiveness of the internal auditors; and
the performance of the external auditors and the
effectiveness of the external audit process, including
monitoring the independence and objectivity of Ernst
& Young.
The Committee reports to the Board on its activities,
identifying any matters in respect of which it considers
that action or improvement is needed and making
recommendations as to the steps to be taken.
The terms of reference of the Audit Committee are reviewed
annually and a copy is published on the RELX website,
www.relx.com
Committee meetings
The Committee met four times during 2018. The Audit Committee
meetings are typically attended by the RELX Chief Executive
Officer, the RELX Chief Financial Officer, the RELX Financial
Controller, the RELX Chief Legal Officer, the RELX Head of Audit
and Risk, and audit partners from the external auditors.
Financial reporting
In discharging its responsibilities in respect of the 2018 interim
and full-year financial statements, the Committee has:
reviewed and discussed areas of significant judgement in the
preparation of the financial statements, including in particular:
i. the carrying values of goodwill and intangible assets – the
significant judgements in respect of asset carrying values
relate to the assumptions underlying the value in use
calculations including discount rates and long-term growth
assumptions. The Committee received and discussed
reports from the RELX Financial Controller on the
methodology and the basis of the assumptions used;
ii. capitalisation of internally generated intangible assets –
the capitalisation of costs related to the development of new
products and business infrastructure, together with the useful
economic lives applied to the resulting assets, requires the
exercise of judgement. The Committee received reports
from the RELX Financial Controller on the amounts
capitalised and asset lives selected for major projects;
iii. uncertain tax positions – assessing potential liabilities
across numerous jurisdictions is complex and requires
judgement in making tax determinations. The Committee
received and discussed reports from the RELX Head of
Taxation on the potential liabilities identified and
judgements applied, including the exceptional tax credit;
iv. reviewed the recognition of certain pension scheme
liabilities which are subject to judgement. The Committee
received and discussed reports from the RELX Financial
Controller on the methodology and the basis of the
assumptions used;
reviewed the critical accounting policies and compliance
with applicable accounting standards, including for the
adoption of IFRS 9, 15 and 16, reviewed other disclosure
requirements and received regular update reports on
accounting and regulatory developments;
reviewed the disclosures made in relation to internal control,
risk management, the going concern statement and the
viability statement. The Committee received and discussed
reports from the RELX Head of Audit and Risk and the RELX
Treasurer on the processes undertaken and assumptions used
in formulating these disclosures;
considered the calculation and presentation of alternative
performance measures (including the exclusion of the
exceptional tax credits) in the Annual Report and Accounts and
results announcement; and
considered whether the Annual Report and Accounts taken
as a whole are fair, balanced and understandable.
The Committee also received detailed written and verbal reports
from the external auditors on these matters. The Committee was
satisfied with the explanations provided and conclusions reached.
Report of the Audit Committee
107
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Report of the Audit Committee
The auditors are precluded from engaging in non-audit services
that would compromise their independence or violate any
professional requirements or regulations affecting their
appointment as auditors. The auditors may, however, provide
non-audit services which do not conflict with their independence,
and where their skills and experience make them a logical
supplier, subject to approval by the Audit Committee.
The Committee will continue to review the policy on the
provision of non-audit services in the light of ongoing
regulatory developments.
The Committee has, each quarter, reviewed and agreed the
non-audit services provided in 2018, together with the associated
fees which are set out in note 4 to the consolidated financial
statements. The non-audit services provided were in the areas
of audit-related activities, such as royalty assurance, and
compliance, due diligence and other transaction-related services.
The non-audit fees in 2018 were higher than previous years as
a result of work relating to the corporate simplification and
increased transaction-related activity. The fees remain below the
70% threshold as per the most recent FRC guidance.
The external auditors have confirmed their independence and
compliance with the policy on auditor independence to the
Audit Committee.
Ernst &Young LLP were first appointed auditor of RELX PLC
for the financial year ended 31 December 2016. The auditor
is required to rotate the lead audit partners responsible
for the audit engagements every five years. The year ended
31 December 2018 was the first year for the lead engagement
partner Hywel Ball. The Audit Committee confirms that they were
in compliance with the provisions of The Statutory Audit Services
for Large Companies Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014 during the financial year ended
31 December 2018.
The Committee has conducted its review of the performance of the
external auditors and the effectiveness of the external audit process
for the year ended 31 December 2018. The review was based on a
survey of key stakeholders across RELX, consideration of public
reports by regulatory authorities on key Ernst & Young member
firms and the quality of the auditors’ reporting to and interaction
with the Audit Committee. Based on this review, the
Audit Committee was satisfied with the performance of the
auditors and the effectiveness of the audit process.
Audit Committee effectiveness
The effectiveness of the Audit Committee was reviewed as part
of the 2018 evaluation of the Board which confirmed that the
Committee continues to function effectively. Details of the
evaluation are set out on page 79.
Adrian Hennah
Chairman of the Audit Committee
20 February 2019
Risk management and internal controls
With respect to their oversight of risk management and internal
controls, the Committee has:
received and discussed regular reports summarising the
status of the Group’s risk management activities, including
identification of emerging risks and actions to mitigate risks,
and the findings from internal audits and the status of actions
agreed with management. Areas of focus in 2018 included:
cyber security; data privacy (including compliance with the EU
General Data Protection Regulation); the operational, financial
and IT control environment; regulatory compliance; business
continuity and resilience; post acquisition integration; integrity
of published non-financial data; and continued compliance
with the requirements of Section 404 of the US Sarbanes-Oxley
Act relating to the documentation and testing of internal
controls over financial reporting;
reviewed and approved the internal audit plan for 2019 and
monitored execution of the 2018 plan, including progress in
respect of recommendations made;
reviewed the resources, terms of reference and effectiveness
of the RELX risk management and internal audit functions;
received presentations from: the RELX Chief Compliance
Officer on the compliance programmes, including the
operation of the RELX Code of Conduct, training programmes
and whistleblowing arrangements and the RELX Chief Legal
Officer on legal issues and claims;
received updates from the RELX Treasurer on pension
arrangements and funding, treasury policies and risk
management and compliance with treasury policies;
received presentations from the RELX Head of Taxation
on tax policies and related matters;
received regular updates from the RELX Chief Financial
Officer on developments within the finance function; and
received presentations from chief financial officers of major
RELX businesses; and
received a report on the major finance IT systems across
RELX, together with an overview of the control environment.
External audit effectiveness
The Group has a well-established policy on audit effectiveness
and independence of auditors that sets out amongst other things:
the responsibilities of the Audit Committee in the selection of
auditors to be proposed for appointment or re-appointment and
for agreement on the terms of their engagement, scope and
remuneration; the auditor independence requirements and the
policy on the provision of non-audit services; the rotation of audit
partners and staff; and the conduct of meetings between the
auditors and the Audit Committee. The policy is available on
the website,
www.relx.com
108 RELX Annual report and financial statements 2018 | Governance
Directors’ Report
The Directors present their report, together with the financial
statements of the Group and RELX PLC (the Company), for the year
ended 31 December 2018. The Company is incorporated as a
public limited company and is registered in England and Wales
with registered number 77536. Its registered office is 1-3 Strand,
London, WC2N 5JR.
Corporate structure
Following the simplification of the Group’s corporate structure,
the Company’s ordinary shares are traded on the London Stock
Exchange and Euronext Amsterdam. It also has in place an
American Depositary Share programme, under which its
securities are traded on the New York Stock Exchange. The
Company and its subsidiaries, joint ventures and associates are
together known as 'RELX' or ‘the Group’.
Financial statement presentation
This Directors’ Report and the financial statements of the Group
and Company should be read in conjunction with the other reports
set out on pages 2 to 107. A review of the Group’s performance
during the year is set out on pages 8 to 59, the principal risks facing
the Group are set out on pages 60 to 63, and the Group statement
on corporate responsibility is set out on pages 42 to 52.
In addition to the reported figures, adjusted figures are presented
as additional performance measures used by management to
assess the performance of the business. These exclude the
Group’s share of amortisation of acquired intangible assets,
acquisition-related costs, tax in joint ventures, disposal gains and
losses and other non-operating items, related tax effects, and
movements in deferred taxation assets and liabilities related to
acquired intangible assets, and include the benefit
of tax amortisation where available on acquired goodwill and
intangible assets.
Company financial statements
The individual company financial statements of the Company
are presented on page 170, and were prepared under Financial
Reporting Standard 101 (FRS 101). Distributable reserves as at
31 December 2018 were £2,689m (2017: £1,518m), comprising
reserves less shares held in treasury. Shareholders’ funds as at
31 December 2018 were £19,739m (2017: £3,174m).
Strategic Report
The Companies Act 2006 requires the Company to present a fair
review of the Group during the financial year. The Strategic Report
which includes a review of the Group’s business areas, a financial
review, the principal risks facing the Group, any important events
affecting the Group since 31 December 2018, and the likely future
developments in the Group’s business, is set out on pages 2 to 63
which are incorporated into this Directors’ Report by reference.
The Directors’ Report, inclusive of the Strategic Report
incorporated therein, forms the management report for the
purposes of the Financial Conduct Authority’s Disclosure and
Transparency Rule 4.1.8R.
Dividends
The Board is recommending a final dividend of 29.7p (2017: 27.7p)
per ordinary share to be paid on 4 June 2019 to shareholders
appearing on the Register at the close of business on 3 May 2019.
Payment of this final dividend remains subject to the approval of
the Company’s shareholders at its 2019 Annual General Meeting
(AGM). Together with the interim dividend of 12.4p (2017: 11.7p) per
ordinary share, paid in August 2018, the total ordinary dividends
for the year will be 42.1p (2017: 39.4p). Details of dividend cover and
dividend policy are set out on page 58.
Corporate governance
The Company has complied throughout the year with the provisions
of the UK Corporate Governance Code 2016 (the Code), which
is publicly available on the Financial Reporting Council website
(www.frc.org.uk). Details of how the main principles of the Code
have been applied and the Directors’ statement on internal control
are set out in the corporate governance review on pages 72 to 81,
which are incorporated into this Directors’ Report by reference.
The 2018 Corporate Governance Code, published by the Financial
Reporting Council in July 2018, applied to the Company with effect
from 1 January 2019.
Greenhouse gas emissions
The Company is required to state the annual quantity of emissions
in tonnes of carbon dioxide equivalent from Group operational
activities. Details of our emissions during the year ended
31 December 2018 and the actions being taken to reduce them
are set out in the Corporate Responsibility section of the
Strategic Report on pages 51 and 52, which are incorporated
into the Directors’ Report by reference. Further details can
be found in our online Corporate Responsibility Report at
www.relx.com/go/CRReport.
Directors
The names of the Directors who served on the Board during the
year are set out on pages 66, 67, and 78, which are incorporated
into this Directors’ Report by reference.
Share capital
The Company’s issued share capital comprises a single class
of ordinary shares, all of which are listed on the London and
Amsterdam stock exchanges. It also has securities, in the form
of American Depositary Shares, traded on the New York Stock
Exchange. All issued shares are fully paid up and carry no
additional obligations or special rights. Each share carries the
right to one vote at general meetings of the Company.
In a general meeting, subject to any rights and restrictions
attached to any shares, on a show of hands every member who is
present in person shall have one vote and every proxy present who
has been duly appointed by one or more members entitled to vote
on the resolution has one vote (although a proxy has one vote for
and one vote against the resolution if: (i) the proxy has been duly
appointed by more than one member entitled to vote on the
resolution; and (ii) the proxy has been instructed by one or more
of those members to vote for the resolution and by one or more
other of those members to vote against it). Subject to any rights or
restrictions attached to any shares, on a vote on a resolution on
a poll every member present in person or by proxy shall have
one vote for every share of which he/she is the holder.
Proxy appointments and voting instructions must be received by
the registrars not less than 48 hours before a general meeting.
There are no specific restrictions on the size of a holding nor on
the transfer of shares, which are both governed by the general
provisions of the Articles and prevailing legislation. The Company
RELX Annual report and financial statements 2018 | Directors' Report 109
Overview Business review Financial review Financial statements and other informationGovernance
is not aware of any agreements between shareholders that may
result in restrictions on the transfer of shares or on voting rights
attached to the shares. At the 2018 AGM, shareholders passed a
resolution authorising the Directors to issue shares for cash
on a non-pre-emptive basis up to a nominal value of £8.1m,
representing less than 5% of the Company’s issued share capital,
and authorising the Directors to issue up to an additional 5% of
the issued share capital for cash on a non-pre-emptive basis in
connection with an acquisition or specified investment. Since the
2018 AGM, no shares have been issued under this authority. The
shareholder authority also permitted the Directors to issue
shares in order to satisfy entitlements under employee share
plans and details of such allotments are described below.
In addition to these authorities, at the general meeting of the
Company held in June 2018, held for shareholders to approve
certain matters relating to the cross-border merger between
RELX PLC and RELX NV (the Merger), the Directors were
unconditionally authorised to allot shares in the Company up to a
nominal value of £136.3m only in connection with the Merger. As
announced by the Company on 10 September 2018, following the
completion of the Merger, 930,780,110 new RELX PLC shares were
issued under this authority. To the extent that they are unused,
each of the authorities to issue shares set out above will expire at
the 2019 AGM. Resolutions authorising the Directors to: (i) issue
shares for cash on a non-pre-emptive basis up to 5% of the issued
share capital; and (ii) issue up to 5% of the issued share capital for
cash on a non-pre-emptive basis in connection with an acquisition
or specified investment, subject to certain conditions in
accordance with the Pre-Emption Group’s Statement of
Principles, will be put forward for approval by shareholders
at the Company’s 2019 AGM.
During the year, 2,465,983 ordinary shares in the Company were
also issued in order to satisfy entitlements under employee share
plans as follows: 603,094 under a UK Sharesave option scheme at
prices between 439.20p and 1251.20p per share; 362,401 under the
former RELX NV Dutch Debenture Scheme in place prior to the
merger at prices between EUR4.781 and EUR18.47, which is now
satisfied by way of Company shares; and 1,500,488 under
executive share option schemes at prices between 466.50p and
1494.50p per share. The issued share capital as at 31 December
2018 is shown in note 25 to the consolidated financial statements.
Authority to purchase shares
At the 2018 AGM, shareholders passed a resolution authorising
the purchase of up to 112.3m ordinary shares in the Company
(representing less than 10% of the issued ordinary shares) by
market purchase. During the year, 26,945,234 ordinary shares
with a nominal value of 1451/116p (representing 1.4% of the ordinary
shares in issue on 31 December 2018) were purchased under
this and the previous authority, for a total consideration of £425m,
including expenses, and subsequently transferred to be held in
treasury. This represents the RELX PLC proportion of the £700m
deployed by the Group on share buybacks during the year. The
purpose of the share buyback is to reduce the capital of
the Company.
On 6 December 2018, the Company cancelled 45m ordinary shares
held in treasury. Therefore, as at 31 December 2018 there were
42,023,020 ordinary shares held in treasury, representing 2.1% of
the issued ordinary shares. A further 5,960,856 ordinary shares
were purchased between 2 January 2019 and the date of this
report. The authority to make market purchases will expire at the
2019 AGM, at which a resolution to further extend the authority will
be submitted to shareholders.
Substantial share interests
As at 31 December 2018, the Company had been notified by the
following shareholders that they held an interest of 3% or more
in voting rights of its issued share capital pursuant to Rule 5 of the
Disclosure and Transparency Rules (DTR):
Notifications received as at 31 December 2018 % of voting rights
Black Rock Inc 10.89%
Invesco Limited 5.03%
Legal and General Group plc 3.40%
The percentage interests stated above are as disclosed at the
date on which the interests were notified to the Company, and
are based on voting rights prior to the corporate simplification.
Between 31 December 2018 and 20 February 2019, the Company
did not receive any notifications under DTR 5.
Employee Benefit Trust
The trustee of the Employee Benefit Trust held an interest in
7,130,366 ordinary shares in the Company (representing 0.3% of
the issued ordinary shares) as at 31 December 2018. The trustee
may vote or abstain from voting any shares it holds in any way it
sees fit.
Significant agreements – change of control
There are a number of borrowing agreements including credit
facilities that, in the event of a change of control of RELX PLC
and, in some cases, a consequential credit rating downgrade to
sub-investment grade may, at the option of the lenders, require
repayment and/or cancellation as appropriate. There are no
arrangements between the Company and its Directors or
employees providing for compensation for loss of office or
employment that occurs specifically because of a takeover,
merger or amalgamation with the exception of provisions in the
Company’s share plans which could result in options or awards
vesting or becoming exercisable on a change of control.
Articles
The Company’s Articles of Association (the 'Articles'), which were
not amended during the year, may only be amended by a special
resolution of shareholders passed at a general meeting of the
Company. At the general meeting of shareholders held in
connection with the corporate simplification on 27 June 2018,
shareholders approved the increase in the maximum aggregate
amount of ordinary remuneration payable to Directors who do not
hold executive office for their services, as set out in Article 142 of
the Articles, from £500,000 to £2,000,000.
Appointment and replacement of Directors
The appointment, re-appointment and replacement of Directors
is governed by the Articles, the Companies Act 2006 and related
legislation. Shareholders maintain their right to appoint and
re-appoint Directors by way of an ordinary resolution in
accordance with the Articles. The Directors may appoint
additional or replacement Directors, who may only serve until the
following AGM of the Company, at which time they must retire and,
if appropriate, seek election by the Company’s shareholders.
A Director may be removed from office by the Company as
110 RELX Annual report and financial statements 2018 | Governance
provided for by applicable law, in certain circumstances set out in
the Articles, and at a general meeting of the Company by the
passing of an ordinary resolution.
The Articles provide for a Board of Directors consisting of not
fewer than two, but not more than 20 Directors, who manage the
business and affairs of the Company.
Powers of Directors
Subject to the provisions of the Companies Act 2006, the Articles
and any directions given by special resolutions, the business of the
Company shall be managed by the Board which may exercise all
the powers of the Company.
Directors’ indemnity
In accordance with its Articles, the Company has granted
Directors an indemnity, to the extent permitted by law, in respect
of liabilities incurred as a result of their office. This indemnity was
in place for Directors that served at any time during the 2018
financial year, and also for each serving Director as at the date
of approval of this report. The Company also purchased and
maintained throughout the year directors’ and officers’ liability
insurance in respect of itself and its Directors.
Related party transactions
Internal controls are in place to ensure that any related party
transactions involving Directors or their connected persons are
carried out on an arm’s-length basis and are properly recorded
and disclosed where appropriate.
Conflicts of interest
Under the Companies Act 2006, the Directors have a duty to
avoid situations in which they have, or could have, a direct or
indirect interest that conflicts with the interests of the Company.
The Board has established formal procedures for identifying,
assessing and reviewing any situations where a Director has an
interest that conflicts, or may possibly conflict, with the interests
of the Company.
The Nominations Committee considers any such conflict or
potential conflict and makes a recommendation to the Board
on whether to authorise it, as permitted under the Company’s
Articles. In reaching its decision, the Board is required to act
in a way it considers would be most likely to promote the
success of the Company and may impose limits or conditions
when giving its authorisation, if it thinks this is appropriate.
Actual or potential conflicts of interest are reviewed annually
by the Nominations Committee.
No contract existed during the year in relation to the Company’s
business in which any Director was materially interested.
Financial Instruments
The Group’s financial risk management objectives and policies,
including hedging activities and exposure to risks, are described
in note 18 to the consolidated financial statements on pages 150
to 155.
Political donations
The Group does not make donations to European Union (EU)
political organisations or incur EU political expenditure. In the
US, Group companies donated £58,763 (2017: £62,791) to political
organisations. In line with US law, these donations were not made
at federal level, but only to candidates and political parties at state
and local levels.
Employee relations
The Group is committed to employee involvement and
participation. Where appropriate, major announcements are
communicated to employees through internal briefings.
Information on performance, development, organisational
changes and other matters of interest is communicated through
briefings and electronic bulletins.
The Company is an equal opportunity employer and does not
discriminate on the grounds of race, gender or other characteristics
in its recruitment or employment policies. The Group seeks
opinions from employees through a triennial survey. The last
employee survey was carried out in 2018. Certain employees
throughout the Group are eligible to participate in the Group’s
share incentive plans.
Disabled persons
RELX has a positive approach to diversity and inclusion. Details of
the Group’s Diversity and Inclusion policy are set out on page 47,
which is incorporated into this Directors’ Report by reference. The
Group is committed to the full and fair treatment of people with
disabilities in relation to job applications, training, promotion and
career development. Where existing employees become disabled,
our policy is to provide continuing employment, support and
training wherever practicable.
Disclosures required under UK Listing Rule 9.8.4
The information required by Listing Rule 9.8.4 is set out on the
pages below:
Information required Page
(1) Interest capitalised by the Group n/a
(2) Publication of unaudited financial information n/a
(4) Long-term incentive schemes n/a
(5) Waiver of emoluments by a director n/a
(6) Waiver of future emoluments by a director n/a
(7) Non pro-rata allotments for cash (issuer) n/a
(8) Non pro-rata allotments for cash (major subsidiaries) n/a
(9) Parent participation in a placing by a listed subsidiary n/a
(10) Contracts of significance n/a
(11) Provision of services by a controlling shareholder n/a
(12) Shareholder waiver of dividends 144
(13) Shareholder waiver of future dividends 144
(14) Agreements with controlling shareholders n/a
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Financial statements and accounting records
The Directors are responsible for preparing the Directors’ Report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the consolidated financial statements in
accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU and Article 4 of the IAS Regulation. The
Directors have elected to prepare the individual company financial
statements in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework. Under company law the
Directors must not approve the accounts unless they are satisfied
that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing the individual company financial statements, the
Directors are required to: select suitable accounting policies and
then apply them consistently; make judgements and accounting
estimates that are reasonable and prudent; state whether
Financial Reporting Standard 101 Reduced Disclosure Framework
has been followed, subject to any material departures being
disclosed and explained in the financial statements; and prepare
the financial statements on a going concern basis unless it is
inappropriate to presume that the Company will continue
in business.
In preparing the Group financial statements, IAS1 requires that
Directors: properly select and apply accounting policies; present
information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable
information; provide additional disclosures when compliance with
the specific requirements of IFRS are insufficient to enable users
to understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial
performance; and make an assessment of the Company’s ability
to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure
that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Directors’ responsibility statement
Each of the Directors, whose names and roles can be found on
pages 66 to 67, confirms that, to the best of their knowledge:
the consolidated financial statements, prepared in accordance
with International Financial Reporting Standards as issued by
the International Accounting Standards Board and as adopted
by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group;
the individual company financial statements, prepared in
accordance with Financial Reporting Standard 101 ‘Reduced
Disclosure Framework’ (FRS 101), give a true and fair view of
the assets, liabilities, financial position and profit or loss of the
Company; and
the Directors’ Report includes a fair review of the development
and performance of the business and the position of the Group,
together with a description of the principal risks and
uncertainties that it faces.
Having taken into account all the matters considered by the Board
and brought to the attention of the Board during the year, the
Directors are satisfied that the Annual Report and Financial
Statements, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company’s position and performance,
business model and strategy.
Neither the Company nor the Directors accept any liability to any
person in relation to the Annual Report except to the extent that
such liability could arise under English law. Accordingly, any
liability to a person who has demonstrated reliance on any untrue
or misleading statement or omission shall be determined in
accordance with Section 90A of the Financial Services and
Markets Act 2000.
Disclosure of information to auditors
In accordance with Section 418 of the Companies Act 2006, each
Director in office at the date the Directors’ Report is approved,
confirms that:
so far as the Director is aware, there is no relevant audit
information of which the Company’s auditors are unaware; and
he/she has taken all the steps that he/she ought to have taken
as a Director to make himself/herself aware of any relevant
audit information and to establish that the Company’s auditors
are aware of that information.
Going concern
The Directors’ statement regarding the appropriateness of
adopting the going concern basis of accounting is set out on page
80, which is incorporated into this Directors’ Report by reference.
Viability statement
The Directors’ statement regarding the long-term viability of
the Group is set out on page 82, which is incorporated into this
Directors’ Report by reference.
Auditors
Resolutions for the re-appointment of Ernst & Young LLP as
auditors of the Company and to authorise the Audit Committee,
on behalf of the Board, to determine their remuneration will be
submitted to shareholders at the 2019 AGM.
Annual General Meeting
The 2019 Annual General Meeting will be held at 10.00am on
25 April 2019 at Amba Hotel, Strand, London, WC2N 5HX.
By order of the Board
Henry Udow
Company Secretary
20 February 2019
Registered Office
1-3 Strand
London
WC2N 5JR
112 RELX Annual report and financial statements 2018 | Financial statements and other information
Financial
statements
and other
information
In this section
113 Independent auditor’s report
121 Consolidated financial statements
126 Notes to the consolidated
financial statements
168 5 year summary
Overview Business review Financial review Governance Financial statements and other information
113RELX Annual report and financial statements 2018
Independent auditor’s report to the members of RELX PLC
OPINION
In our opinion:
RELX PLC and its subsidiaries, joint ventures and associates (“RELX”)’s group financial statements and parent company financial
statements (the “financial statements”) give a true and fair view of the state of the group’s and of the parent company’s affairs as at
31 December 2018 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006, and, as regards the
group financial statements, Article 4 of the IAS Regulation.
We have audited the financial statements of RELX PLC which comprise:
Group Parent company
Consolidated statement of financial position as at 31 December 2018 Statement of financial position as at 31 December 2018
Consolidated income statement for the year then ended Statement of changes in equity for the year then ended
Consolidated statement of comprehensive income for the year
then ended
Related notes 1 to 3 to the financial statements including
a summary of significant accounting policies
Consolidated statement of changes in equity for the year then ended
Consolidated statement of cash flows for the year then ended
Related notes 1 to 30 to the financial statements, including a
summary of significant accounting policies
The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been
applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards,
including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report below. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO PRINCIPAL RISKS, GOING CONCERN AND VIABILITY STATEMENT
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs(UK) require us to
report to you whether we have anything material to add or draw attention to:
the disclosures in the annual report set out on pages 60 to 63 that describe the principal risks and explain how they are being
managed or mitigated;
the directors’ confirmation set out on page 60 in the annual report that they have carried out a robust assessment of the principal
risks facing the entity, including those that would threaten its business model, future performance, solvency or liquidity;
the directors’ statement set out on page 80 in the financial statements about whether they considered it appropriate to adopt the
going concern basis of accounting in preparing them, and their identification of any material uncertainties to the entity’s ability to
continue to do so over a period of at least twelve months from the date of approval of the financial statements;
whether the directors’ statement in relation to going concern required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
the directors’ explanation set out on page 82 in the annual report as to how they have assessed the prospects of the entity, over what
period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a
reasonable expectation that the entity will be able to continue in operation and meet its liabilities as they fall due over the period of
their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
114 RELX Annual report and financial statements 2018 | Financial statements and other information
OVERVIEW OF OUR AUDIT APPROACH
Key audit matters
Uncertain tax positions
Internally developed intangible assets
Aspects of revenue recognition
Carrying value of goodwill and acquired intangible assets
Finance systems
Accounting for the corporate simplification
Acquisition accounting for significant new business combinations
Audit scope
We performed an audit of the complete financial information of six components and audit
procedures on specific balances for a further seven components. We also instructed two locations
to perform specified procedures.
The components where we performed full or specific audit procedures accounted for 81%
of absolute profit before tax, 80% of revenue and 75% of total assets.
Materiality
Overall Group materiality of £90m which represents 5% of profit before tax.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
RISK OUR RESPONSE TO THE RISK
KEY OBSERVATIONS
COMMUNICATED
TO THE AUDIT COMMITTEE
Uncertain tax positions
Refer to the Audit Committee Report (page 106) and Note
9 of the Consolidated Financial Statements (page 138)
The group is subject to tax in numerous jurisdictions.
Its complex organisation and operational structure
gives rise to potential tax exposures that require
management to exercise significant judgement in
making determinations as to the amount of tax
that is payable.
The group reports cross-border transactions
undertaken between subsidiaries on an arm’s-length
basis in tax returns in accordance with Organisation
for Economic Co-operation and Development (OECD)
guidelines. However, transfer pricing relies on the
exercise of judgement and it is frequently possible
for there to be a range of legitimate and reasonable
views.
The group is subject to tax authority audits as
a matter of routine and has a number of open
tax enquiries.
As a result, it has recognised a number of provisions
against uncertain tax positions, the valuation of which
requires significant judgement.
We focused on this area due to the significance of the
balance and the subjectivity in the quantification of
the provision and the judgement around the trigger
for recognition or release. There is a risk that the tax
provisions may be incorrectly quantified, impacting
the provision and the effective tax rate.
Our procedures on the uncertain tax positions were
performed centrally by the group team supported by
overseas teams including specialists, and included
the following:
We assessed the processes and tested controls over the
tax provisioning process.
We met with tax management to understand the group
cross-border transactions, status of all significant
provisions, and any changes to management’s
judgements in the year.
We read correspondence with tax authorities and
external advisors to inform our assessment of recorded
estimates and evaluate the completeness of the
provisions recorded.
We evaluated management’s methodology to record or
release provisions following tax audits, settlements and
the expiry of timeframes.
We tested the calculation of the year end provisions by
inspecting underlying documentation and supporting
schedules.
We reported our
conclusions to the
Audit Committee that
we challenged the
robustness of the
key management
judgements. We
confirmed that we
were satisfied that
management’s
judgements in
relation to the extent
of provisions for
uncertain tax positions
are appropriate. We
noted further that there
continues to be a high
degree of uncertainty
about the eventual
outcome of many of
these provisions.
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Independent auditors’ report to the members of RELX PLC 115
RISK OUR RESPONSE TO THE RISK
KEY OBSERVATIONS
COMMUNICATED
TO THE AUDIT COMMITTEE
Internally developed intangible assets
Refer to the Audit Committee Report (page 106) and Note
15 of the Consolidated Financial Statements (page 144)
The group capitalised internally developed intangible
assets of £304 million in the current year (2017: £304
million) and has a year end net book value of £1,217
million (2017: 1,136 million). The capitalisation of
costs related to the development of new products and
business infrastructure, together with the useful
economic lives applied to the resulting assets,
requires the exercise of judgement.
We focused on this area as the group has invested
significantly in several projects across the business.
It is inherently judgemental with respect to technical
feasibility, intention and ability to complete the
intangible asset, ability to use or sell the asset, ability
to generate future economic benefits and ability to
measure the costs reliably. This results in a risk that
expenditures may be inappropriately capitalised,
amortised or valued.
We performed full and specific scope audit procedures
over internally developed intangible assets in 4 locations,
which covered 75% of the account balance, including the
following:
We assessed the processes and tested controls for the
capitalisation of internally generated intangible assets.
We assessed the accounting policy and methodology for
capitalisation of expenditures.
We evaluated the accuracy and valuation of amounts
capitalised to assess that costs are directly attributable
and necessary to create, produce, and prepare the asset
to be capable of operating in the manner intended by
management.
Based on the
procedures performed,
we did not identify any
evidence of material
misstatement in the
capitalisation of
internally developed
intangible assets.
Aspects of revenue recognition
Refer to Note 2 of the Consolidated Financial Statements
(page 128)
The group earns revenue from a variety of sources
among the different business areas, including annual
subscriptions, transactional usage and exhibition
fees. The nature of the risk associated with the
accurate recording of revenue varies.
We recognise that revenue is a key metric upon which
the group is judged, that the group has annual internal
targets, and that the group has incentive schemes
that are partially impacted by revenue growth.
We have determined that there is a risk in relation to
each of the business areas related to the opportunity
to commit fraud in the respective revenue streams
through manual adjustments or override of controls
by management.
We performed full and specific scope audit procedures
over revenue in 12 locations, which covered 80% of
revenue. We performed procedures to address the
specific risk in each business area, including the following:
We assessed the processes and tested controls over
each significant revenue stream.
We evaluated the appropriateness of journal entries
impacting revenue, as well as other adjustments made
in the preparation of the financial statements. We also
evaluated management’s controls over such
adjustments.
We inspected a sample of contracts to check that
revenue recognition was in accordance with the
contract terms and the group’s revenue recognition
policies.
We tested a sample of transactions around period end to
test that revenue was recorded in the correct period.
For revenue streams that have judgemental elements,
we evaluated management’s assumptions.
Based on the
procedures performed,
we did not identify
evidence of material
misstatement in the
revenue recognised in
the year.
116 RELX Annual report and financial statements 2018 | Financial statements and other information
RISK OUR RESPONSE TO THE RISK
KEY OBSERVATIONS
COMMUNICATED
TO THE AUDIT COMMITTEE
Carrying value of goodwill and acquired
intangible assets
Refer to the Audit Committee Report (page 106) and Note
14 of the Consolidated Financial Statements (page 144)
We focused on this area because of the size of the
goodwill balance of £6,899 million (2017: £5,965
million); the size of the acquired intangible assets net
book amount of £2,317 million (2017: £2,058 million);
and the fact that management’s assessment of the
value in use of the group’s Cash Generating Units
(‘CGU’) and any possible consequential impairment
involves judgement about the future results of the
relevant CGUs and the discount rates applied to cash
flow forecasts.
Procedures on the carrying value of goodwill and acquired
intangible assets were performed centrally by the group
team supported by overseas teams including specialists,
and included the following:
We assessed the processes and tested controls over the
goodwill and acquired intangible asset process.
We assessed the key information and assumptions used
in determining the valuation including the weighted
average cost of capital, cash flow forecasts and the
implicit growth, utilising our specialist support as
necessary. We also conducted a sensitivity analysis to
understand by how much these projections would need
to change by for there to be an impairment.
We assessed management’s annual goodwill and
indefinite lived acquired intangible asset impairment
review as well as management’s consideration as to
whether indicators of impairment existed for finite lived
acquired intangible assets. Where indicators were
present for acquired intangible assets, we focused on
the key judgements in the impairment review
calculations, for example, the expected cash flows and
future benefits as compared to the costs where
applicable.
We reported our
conclusions to the Audit
Committee that the
assumptions relating to
the impairment models
fell within acceptable
ranges.
Based on the
procedures performed,
we agree with
management’s
conclusion that no
material impairment of
goodwill or intangible
assets was required in
the year.
Finance systems
The group has many IT systems that are vital
to the ongoing operations and to the integrity of the
financial reporting process. Owing to the global
nature of the group and its operations, the
applications, associated infrastructure and IT
processes that support significant business and
financial processes are spread across a number of
locations. These are delivered by a mix of in-house
teams and third party support providers some of
whom reside in different countries from the physical
location of the IT infrastructure or the location of the
RELX business users. Understanding the IT
environment including interfaces between them was
an area of audit focus to assess if transactions were
being processed accurately.
We utilised IT specialists to support our evaluation of the
design and operation of IT controls to address the group’s
control objectives and financial reporting risks, including
the following:
We made enquiries of management to understand the IT
environment and walked through the financial
processes end-to-end in order to understand where IT
systems were integral to the group accounting
processes, as applicable.
We performed data analytic procedures in certain
locations and business areas to understand the flow of
transactions and perform specific test procedures.
We tested the IT general controls environment for the
key applications.
Where appropriate, we received reports from the
service auditors of the outsourced systems and
evaluated the adequacy of the work performed and
followed up on matters arising, performing further
procedures as necessary.
Where required, we tested compensating controls or
performed alternative procedures to complement the
controls based audit approach.
Based on the
procedures performed,
we have not identified
any misstatements in
the financial statements
due to any limitations of
the IT environment. Our
understanding and
testing of IT systems and
controls supported our
audit approach.
Accounting for the corporate simplification
Refer to Note 1 of the Consolidated Financial Statements
(page 126)
On 8 September 2018, the structure of group was
further simplified from a dual parent structure to a
single parent structure by way of a merger of RELX
PLC and RELX NV. Following the completion of the
Simplification, RELX PLC is the sole parent company
of the group. It owns 100% of the shares in RELX Group
plc which, in turn, holds the operating businesses,
subsidiaries and financing activities of the group.
We focused on this area as it was a significant and
unusual transaction.
Procedures on the accounting for the corporate
simplification were performed centrally by the group team
supported by our team in the Netherlands and specialists,
as necessary.
We assessed the accounting for the transaction including
whether the transaction was considered a merger or
acquisition, the impact on earnings per share, share based
payments and share capital.
We also evaluated the disclosure in the financial
statements including accounting for the restructure in the
parent company financial statements.
Based on the
procedures performed,
we reported to the Audit
Committee that
management’s
judgements in relation
to the accounting for the
corporate simplification
of the group are
appropriate, as are the
related disclosures.
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Independent auditors’ report to the members of RELX PLC 117
RISK OUR RESPONSE TO THE RISK
KEY OBSERVATIONS
COMMUNICATED
TO THE AUDIT COMMITTEE
Acquisition accounting for significant new
business combinations
Refer to Note 12 of the Consolidated Financial
Statements (page 143)
During the year ended 31 December 2018, the
group made several acquisitions totalling £955
million as detailed in Note 12. The most significant
acquisition was ThreatMetrix for total consideration
of £585 million.
The company assessed, with the assistance of third
party valuation specialists where required, the
completeness and fair value of identifiable assets
acquired and liabilities assumed in these
acquisitions.
We focused on this area due to the materiality of the
acquisitions and because the assessment of fair value
of identifiable assets is inherently judgemental.
We performed audit procedures on 7 of the acquisitions
made during the year, including ThreatMetrix. For each of
the acquisitions tested:
We assessed the processes and tested controls in the
business combination process where acquisitions were
significant.
We assessed with the assistance of our internal
valuation specialists as necessary, the methodology
and key assumptions used in determining the purchase
price allocation made by management. Key
assumptions evaluated were discount rates, terminal
growth rates, cash flow projections, net assets acquired
and useful lives assigned.
We read documents such as sale and purchase
agreements, board papers and due diligence reports to
assess the consistency and completeness of the fair
value adjustments recorded.
We evaluated the adequacy of the disclosures provided by
the group in Note 12 in relation to its acquisitions.
We did not identify
evidence of material
misstatement in the
allocation of the
purchase price to
identifiable assets
acquired and liabilities
assumed in these
acquisitions recognised
in the year.
In the current year, our key audit matters introduced the Accounting for the corporate simplification of the group as it is a significant one-time
transaction. Additionally, our key audit matters also introduced Acquisition accounting for significant new business combinations due to the total
consideration expended in the year.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for
each entity within the group. Taken together, this enables us to form an opinion on the consolidated financial statements. We take into
account size, risk profile, the organisation of the group and effectiveness of group-wide controls, changes in the business environment
and other factors such as recent Internal audit results when assessing the level of work to be performed at each entity.
The group has centralised processes for key judgements and determination of accounting policies. Certain areas of audit focus, namely
internally developed intangible assets, revenue recognition, and IT system management are decentralised processes delineated by
business area. We have tailored our audit response accordingly and procedures for the areas of focus were performed or directed by the
group audit team.
In assessing the risk of material misstatement to the group financial statements, and to ensure we had adequate quantitative coverage
of significant accounts in the financial statements, we selected thirteen components covering entities within United Kingdom, the
Netherlands, the United States, France, Switzerland, and Japan, which represent the principal business units within the group.
Of the thirteen components selected, we performed an audit of the complete financial information of six components (“full scope
components”) which were selected based on their size or risk characteristics. For the remaining seven components (“specific scope
components”), we performed audit procedures on specific accounts within that component that we considered had the potential for the
greatest impact on the significant accounts in the financial statements either because of the size of these accounts or their risk profile.
We also instructed two locations to perform specified procedures over certain aspects of acquisition accounting for significant new
business combinations, as described in the Risk section above.
The reporting components where we performed audit procedures accounted for 81% (2017: 79%) of the group’s profit before tax on an
absolute basis
1
, 80% (2017: 78%) of the group’s Revenue and 75% (2017: 78%) of the group’s Total assets. For the current year, the full
scope components contributed 57% (2017: 57%) of the group’s profit before tax on an absolute basis, 70% (2017: 70%) of the group’s
Revenue and 67% (2017: 70%) of the group’s Total assets. The specific scope components contributed 23% (2017: 22%) of the group’s
profit before tax on an absolute basis, 10% (2017: 8%) of the group’s Revenue and 8% (2017: 8%) of the group’s Total assets. The audit
scope of these components may not have included testing of all significant accounts of the component but will have contributed to the
coverage of significant tested for the group.
Of the remaining components that together represent 19% of the group’s profit before tax on an absolute basis, none are individually
greater than 2% of the group’s profit before tax on an absolute basis. For these components, we performed other procedures, including
analytical review, review of internal audit reports, and testing of consolidation journals, intercompany eliminations and foreign currency
translation recalculations at the group level to respond to any potential risks of material misstatement to the group financial statements.
(1) Coverage of profit before tax measured on an absolute basis for each component (components with a loss would be added to both the numerator and denominator).
118 RELX Annual report and financial statements 2018 | Financial statements and other information
The charts below illustrate the coverage obtained from the work performed by our audit teams.
PROFIT BEFORE TAX (ABSOLUTE)
19%
23%
57%
Full scope Specific scope
Other procedures
REVENUE
20%
10%
70%
TOTAL ASSETS
25%
8%
67%
Changes from the prior year
Changes from the prior year include increasing scope of one component from other procedures scope to specific scope as part of risk
focused approach. We have also added one component to specific scope and instructed two locations to perform specified procedures
as a result of acquisitions. The corporate structure has also been simplified in the year to a single parent company structure, with RELX
PLC as the surviving company.
Involvement with component teams
In establishing our overall approach to the group audit, we determined the type of work that needed to be undertaken at each of the
components by us, as the primary audit engagement team, or by component auditors from other EY global network firms operating
under our instruction. Of the six full scope components, audit procedures were performed on three of these directly by the primary audit
team. For the seven specific scope components and two specified procedure locations, where the work was performed by component
auditors, we determined the appropriate level of involvement to enable us to determine that sufficient audit evidence had been obtained
as a basis for our opinion on the group as a whole.
The group audit team continued to follow a programme of planned visits that has been designed to ensure that the Senior Statutory
Auditor, or another group audit partner, meet with the all full scope locations and specific scope locations on a rotational basis. During
the current year’s audit cycle, visits were undertaken by the primary audit team to component teams in the United Kingdom, the
Netherlands, the United States, France, Switzerland, and Japan. These visits involved meeting local management and discussing the
audit approach and any issues arising with the component audit team. The group audit team also participated in key discussions, via
conference calls with all full and specific scope locations. The primary team interacted regularly with the component teams where
appropriate during various stages of the audit, reviewed key working papers and were responsible for the scope and direction of the
audit process. This, together with the additional procedures performed at group level, gave us appropriate evidence for our opinion on
the group financial statements.
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit
and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.
We determined materiality for the group to be £90 million (2017: £86.7 million), which is 5% (2017: 5%) of profit before tax. We believe that
profit before tax provides us with the best assessment of the requirements of the users of the financial statements.
We determined materiality for the Parent Company to be £90 million (2017: £63.4 million), which is 0.5% (2017: 2%) of equity. Materiality
has increased due to the changes in equity following the corporate simplification.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the group’s overall control environment, our judgement was that
performance materiality was 75% (2017: 75%) of our planning materiality, namely £67.5 million (2017: £65.0m). We have set performance
materiality at this percentage due to our assessment of the control environment and the historic lack of significant audit findings.
Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement accounts is
undertaken based on a percentage of total performance materiality. The performance materiality set for each component is based on
the relative scale and risk of the component to the group as a whole and our assessment of the risk of misstatement at that component.
In the current year, the range of performance materiality allocated to components was £19.4 million to £48.4 million (2017: £19.5 million
to £48.7 million).
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Independent auditors’ report to the members of RELX PLC 119
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £4.5 million
(2017: £4.35 million), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of
other relevant qualitative considerations in forming our opinion.
OTHER INFORMATION
The other information comprises the information included in the annual report set out on pages 2 to 111, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated
in this report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we
are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in the other
information and to report as uncorrected material misstatements of the other information where we conclude that those items meet
the following conditions:
Fair, balanced and understandable set out on page 80 – the statement given by the directors that they consider the annual report and
financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders
to assess the group’s performance, business model and strategy, is materially inconsistent with our knowledge obtained in the audit;
or
Audit committee reporting set out on page 106 – the section describing the work of the audit committee does not appropriately
address matters communicated by us to the audit committee; or
Directors’ statement of compliance with the UK Corporate Governance Code set out on page 72 – the parts of the directors’
statement required under the Listing Rules relating to the company’s compliance with the UK Corporate Governance Code containing
provisions specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure from a
relevant provision of the UK Corporate Governance Code.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if,
in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received
from branches not visited by us; or
the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with
the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 108, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group and parent company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
120 RELX Annual report and financial statements 2018 | Financial statements and other information
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are; to identify and assess the risks of material misstatement of the financial statements
due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through
designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the
audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance
of the entity and management.
Our approach was as follows:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and determined that the most
significant are those that relate to the reporting framework (IFRS, FRS 101, the Companies Act 2006 and UK Corporate Governance
Code) and the relevant tax compliance regulations in the jurisdictions in which the group operates.
We understood how RELX PLC is complying with those frameworks by making enquiries of management, internal audit, those
responsible for legal and compliance procedures and the company secretary. We corroborated our enquiries through our review of
board minutes and papers provided to the Audit Committee.
We assessed the susceptibility of the group’s financial statements to material misstatement, including how fraud might occur by
meeting with management from various parts of the business to understand where it considered there was susceptibility to fraud.
We also considered performance targets and their propensity to influence on efforts made by management to manage earnings. We
considered the programmes and controls that the group has established to address risks identified, or that otherwise prevent, deter
and detect fraud; and how senior management monitors those programmes and controls. Where the risk was considered to be
higher, we performed audit procedures to address each identified fraud risk. These procedures included testing manual journals and
were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our
procedures involved: journal entry testing, with a focus on manual consolidation journals and journals indicating large or unusual
transactions based on our understanding of the business; enquiries of legal counsel, Group management, internal audit, country
management at all full and specific scope management; and focused testing. In addition, we completed procedures to conclude on
the compliance of the disclosures in the annual report and accounts with all applicable requirements.
Any instances of non-compliance with laws and regulations were communicated by/to components and considered in our audit
approach, if applicable.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters we are required to address
We were appointed by the company on 21 April 2016 to audit the financial statements for the year ending 31 December and subsequent
financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments is three years, covering the years
ending 2016 to 2018.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting the audit.
The audit opinion is consistent with the additional report to the audit committee.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Hywel Ball (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
20 February 2019
Notes:
(1) The maintenance and integrity of the RELX PLC web site is the responsibility of the directors; the work carried out by the auditors does not involve consideration
of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were
initially presented on the web site.
(2) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Overview Business review Financial review Governance Financial statements and other information
121RELX Annual report and financial statements 2018
Consolidated income statement
FOR THE YEAR ENDED 31 DECEMBER
Note
2018
£m
Restated
2017
£m
Restated
2016
£m
Revenue 2 7,492 7,341 6,889
Cost of sales (2,644) (2,628) (2,488)
Gross profit 4,848 4,713 4,401
Selling and distribution costs (1,191) (1,163) (1,109)
Administration and other expenses (1,725) (1,682) (1,621)
Share of results of joint ventures 32 37 37
Operating profit 3 1,964 1,905 1,708
Finance income 7 6 6 10
Finance costs 7 (217) (205) (223)
Net finance costs (211) (199) (213)
Disposals and other non-operating items 8 (33) 15 (36)
Profit before tax 1,720 1,721 1,459
Current tax (297) (439) (374)
Deferred tax 5 374 73
Tax expense 9 (292) (65) (301)
Net profit for the year 1,428 1,656 1,158
Attributable to:
RELX PLC shareholders 1,422 1,648 1,150
Non-controlling interests 6 8 8
Net profit for the year 1,428 1,656 1,158
Earnings per share
FOR THE YEAR ENDED 31 DECEMBER 2018
Restated
2017
Restated
2016
Basic earnings per share
RELX PLC 10 71.9p 81.6p 55.8p
Diluted earnings per share
RELX PLC 10 71.4p 81.0p 55.3p
122 RELX Annual report and financial statements 2018 | Financial statements and other information
Consolidated statement of comprehensive income
FOR THE YEAR ENDED 31 DECEMBER
Note
2018
£m
Restated
2017
£m
Restated
2016
£m
Net profit for the year 1,428 1,656 1,158
Items that will not be reclassified to profit or loss:
Actuarial (losses)/gains on defined benefit pension schemes 6 (91) 233 (262)
Tax on items that will not be reclassified to profit or loss 9 15 (59) 45
Total items that will not be reclassified to profit or loss (76) 174 (217)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations 207 (507) 667
Fair value movements on cash flow hedges 18 (59) 137 (165)
Transfer to net profit from cash flow hedge reserve 18 17 25 46
Tax on items that may be reclassified to profit or loss 9 9 (30) 19
Total items that may be reclassified to profit or loss 174 (375) 567
Other comprehensive income/(loss) for the year 98 (201) 350
Total comprehensive income for the year 1,526 1,455 1,508
Attributable to:
RELX PLC shareholders 1,520 1,447 1,500
Non-controlling interests 6 8 8
Total comprehensive income for the year 1,526 1,455 1,508
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 123
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER
Note
2018
£m
Restated
2017
£m
Restated
2016
£m
Cash flows from operating activities
Cash generated from operations 11 2,555 2,526 2,311
Interest paid (including lease interest) (179) (169) (178)
Interest received 24 6 10
Tax paid (net) (415) (449) (402)
Net cash from operating activities 1,985 1,914 1,741
Cash flows from investing activities
Acquisitions 11 (935) (131) (361)
Purchases of property, plant and equipment (56) (51) (51)
Expenditure on internally developed intangible assets (306) (303) (282)
Purchase of investments (13) (10) (6)
Proceeds from disposals of property, plant and equipment 4 1 1
Gross proceeds from business disposals 34 84 18
Payments on business disposals (29) (43) (23)
Dividends received from joint ventures 30 38 44
Net cash used in investing activities (1,271) (415) (660)
Cash flows from financing activities
Dividends paid to shareholders 13 (796) (762) (683)
Distributions to non-controlling interests (8) (10) (9)
Increase/(decrease) in short-term bank loans, overdrafts and commercial paper 11 147 (148) 271
Issuance of term debt 11 958 873 603
Repayment of term debt 11 (211) (712) (474)
Repayment of leases 11 (95) (89) (82)
Receipts in respect of subleases 11 14 11 8
Repurchase of ordinary shares 25 (700) (700) (700)
Purchase of shares by Employee Benefit Trust 25 (43) (39) (29)
Proceeds on issue of ordinary shares 21 32 23
Net cash used in financing activities (713) (1,544) (1,072)
Increase/(decrease) in cash and cash equivalents 11 1 (45) 9
Movement in cash and cash equivalents
At start of year 111 162 122
Increase/(decrease) in cash and cash equivalents 1 (45) 9
Exchange translation differences 2 (6) 31
At end of year 114 111 162
124 RELX Annual report and financial statements 2018 | Financial statements and other information
Consolidated statement of financial position
AS AT 31 DECEMBER
Note
2018
£m
Restated
2017
£m
Restated
2016
£m
Non-current assets
Goodwill 14 6,899 5,965 6,392
Intangible assets 15 3,534 3,194 3,604
Investments in joint ventures 16 104 102 102
Other investments 16 151 141 137
Property, plant and equipment 17 198 194 223
Right of use assets 23 263 287 326
Deferred tax assets 9 455 431 469
Net pension assets 6 6 22 –
Derivative financial instruments 18 37 86 49
11,647 10,422 11,302
Current assets
Inventories and pre-publication costs 19 212 197 209
Trade and other receivables 20 2,015 1,873 2,015
Derivative financial instruments 18 10 29 20
Cash and cash equivalents 11 114 111 162
2,351 2,210 2,406
Assets held for sale 1 – 6
Total assets 13,999 12,632 13,714
Current liabilities
Trade and other payables 21 3,432 3,298 3,479
Derivative financial instruments 18 32 32 85
Borrowings 22 1,392 762 1,169
Taxation 450 560 612
Provisions 24 15 12 17
5,321 4,664 5,362
Non-current liabilities
Derivative financial instruments 18 37 25 110
Borrowings 22 4,973 4,491 4,087
Deferred tax liabilities 9 830 738 1,137
Net pension obligations 6 439 350 636
Provisions 24 36 51 69
6,315 5,655 6,039
Liabilities associated with assets held for sale 4 – 5
Total liabilities 11,640 10,319 11,406
Net assets 2,359 2,313 2,308
Capital and reserves
Share capital 25 290 224 226
Share premium 25 1,415 3,104 3,003
Shares held in treasury 25 (734) (1,631) (1,471)
Translation reserve 374 170 727
Other reserves 26 984 425 (215)
Shareholders’ equity 2,329 2,292 2,270
Non-controlling interests 30 21 38
Total equity 2,359 2,313 2,308
The consolidated balance sheet as presented as at 31 December 2016 is equivalent to the balance sheet as at 1 January 2017 and as such
fulfils the requirements of IAS 1 Presentation of Financial Statements relating to the retrospective application of IFRS 9, IFRS 15 and
IFRS 16.
The consolidated financial statements were approved by the Board of Directors and authorised for issue on 20 February 2019.
They were signed on its behalf by:
A J Habgood N L Luff
Chairman Chief Financial Officer
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 125
Consolidated statement of changes in equity
Note
Share
capital
£m
Share
premium
£m
Shares held
in treasury
£m
Translation
reserve
£m
Other
reserves
£m
Shareholders’
equity
£m
Non-
controlling
interests
£m
Total
equity
£m
Balance at 1 January 2016 224 2,748 (1,393) 224 341 2,144 34 2,178
Impact of adoption of new
standards – – – – (36) (36) – (36)
Total comprehensive income
for the year – – – 667 833 1,500 8 1,508
Dividends paid 13 – – – – (683) (683) (9) (692)
Issue of ordinary shares,
net of expenses – 23 – – – 23 – 23
Repurchase of ordinary shares – – (722) – – (722) – (722)
Cancellation of shares (6) – 713 – (707) – – –
Increase in share based
remuneration reserve
(net of tax) – – – – 44 44 – 44
Settlement of share awards – – 39 – (39) – – –
Exchange differences on
translation of capital
and reserves 8 232 (108) (164) 32 – 5 5
Balance at 1 January 2017
(restated) 226 3,003 (1,471) 727 (215) 2,270 38 2,308
Total comprehensive income
for the year – – – (507) 1,954 1,447 8 1,455
Dividends paid 13 – – – – (762) (762) (10) (772)
Issue of ordinary shares,
net of expenses – 32 – – – 32 – 32
Repurchase of ordinary shares – – (737) – – (737) – (737)
Cancellation of shares 25 (4) – 570 – (566) – – –
Increase in share based
remuneration reserve
(net of tax) – – – – 42 42 – 42
Settlement of share awards – – 37 – (37) – –
Acquisitions – – – – – – 1 1
Disposal of business – – – – – – (15) (15)
Exchange differences on
translation of capital
and reserves 2 69 (30) (50) 9 – (1) (1)
Balance at 1 January 2018 224 3,104 (1,631) 170 425 2,292 21 2,313
Total comprehensive income
for the year – – – 207 1,313 1,520 6 1,526
Dividends paid 13 – – – – (796) (796) (8) (804)
Issue of ordinary shares,
net of expenses 25 134 114 – – (227) 21 – 21
Repurchase of ordinary shares – – (743) – – (743) – (743)
Cancellation of shares 25 (68) (1,795) 1,601 – 262 – – –
Increase in share based
remuneration reserve
(net of tax) – – – – 35 35 – 35
Settlement of share awards – – 35 – (35) – – –
Acquisitions – – – – – – 11 11
Exchange differences on
translation of capital
and reserves – (8) 4 (3) 7 – – –
Balance at 31 December 2018 290 1,415 (734) 374 984 2,329 30 2,359
126 RELX Annual report and financial statements 2018 | Financial statements and other information
Notes to the consolidated financial statements
for the year ended 31 December 2018
1 Basis of preparation and accounting policies
Basis of preparation
The shares of RELX PLC are traded on the London, Amsterdam and New York stock exchanges. RELX PLC and its subsidiaries, joint
ventures and associates are together known as ‘RELX’.
Up until the corporate simplification, consolidated accounts were prepared on the basis that all shareholders were regarded as having
interests in a single economic entity, and as such the dual parent Group formed a single reporting entity for the presentation of consolidated
financial statements. The corporate simplification as described on page 72 therefore has had no impact on the basis of preparation of the
consolidated financial statements.
In preparing the consolidated financial statements, subsidiaries are accounted for under the acquisition method and investments in
associates and joint ventures are accounted for under the equity method. All intra-group transactions and balances are eliminated.
On acquisition of a subsidiary, or interest in an associate or joint venture, fair values, reflecting conditions at the date of acquisition, are
attributed to the net assets, including identifiable intangible assets acquired. Adjustments are made to bring accounting policies into line
with those of the Group. The results of subsidiaries sold or acquired are included in the consolidated financial statements up to or from
the date that control passes from or to the Group.
Non-controlling interests in the net assets of the Group are identified separately from shareholders’ equity. Non-controlling interests
consist of the amount of those interests at the date of the original acquisition and the non-controlling share of changes in equity since the
date of acquisition.
The Directors of RELX PLC, having made appropriate enquiries, consider that adequate resources exist for the Group to continue in
operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the
consolidated financial statements for the year ended 31 December 2018.
Accounting policies
The Group’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union and as issued by the International Accounting Standards Board (IASB). The accounting policies under
IFRS are included in the relevant notes to the consolidated financial statements. The accounting policies below are applied throughout
the financial statements and are unchanged from those applied in preparing the consolidated financial statements for the year ended
31 December 2017 and 2016, with the exception of policies relating to the adoption of IFRS 9 – Financial Instruments, IFRS 15 – Revenue
from Contracts with Customers and IFRS 16 – Leases.
Restatement
The consolidated financial statements have been restated for the retrospective adoption of IFRS 9, IFRS 15 and IFRS 16. Each note
identifies where comparatives have been restated.
Foreign exchange translation
The consolidated financial statements are presented in sterling.
Transactions in foreign currencies are recorded at the rate of exchange prevailing on the date of the transaction. Non-monetary assets
and liabilities that are measured at historical cost in foreign currencies are translated using the exchange rate at the date of the
transaction. At each statement of financial position date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rate prevailing on the statement of financial position date. Exchange differences arising are recorded in the income
statement other than where hedge accounting applies, as set out on pages 150 to 155.
Assets and liabilities of foreign operations are translated at exchange rates prevailing on the statement of financial position date. Income
and expense items and cash flows of foreign operations are translated at the average exchange rate for the period. Significant individual
items of income and expense and cash flows in foreign operations are translated at the rate prevailing on the date of transaction.
Exchange differences arising are classified as equity and transferred to the translation reserve. When foreign operations are disposed
of, the related cumulative translation differences are recognised within the income statement in the period.
The Group uses derivative financial instruments, primarily forward contracts, to hedge its exposure to certain foreign exchange risks.
Details of the Group’s accounting policies in respect of derivative financial instruments are set out on page 150.
Critical judgements and key sources of estimation uncertainty
The most significant accounting policies in determining the financial condition and results of the Group, and those requiring the most
subjective or complex judgement, relate to and are included in the following notes:
valuation of goodwill and intangible assets – notes 14 and 15;
capitalisation of development spend – note 15;
taxation – note 9; and
accounting for defined benefit pension schemes – note 6.
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 127
1 Basis of preparation and accounting policies (continued)
Other significant accounting policies
The accounting policy in respect of revenue recognition is also significant in determining the financial condition and results of the Group,
although the application of this policy is more straightforward. This policy is included in note 2.
Standards and amendments effective for the year
New accounting standards and amendments effective for the period and adopted by the Group in 2018 are IFRS 9 – Financial Instruments
and IFRS 15 – Revenue from Contracts with Customers. IFRS 16 – Leases has also been adopted in the period, a year earlier than its
mandatory effective date of 1 January 2019.
The impact of the adoption of these standards on the full year 2016 and full year 2017 results is as follows:
2016 as
reported
£m
IFRS 9
impact
£m
IFRS 15
impact
£m
IFRS 16
impact
£m
2016 as
restated
£m
Income statement
Revenue 6,895 – (6) – 6,889
Reported operating profit 1,708 – (6) 6 1,708
Net finance costs (195) (2) – (16) (213)
Reported net profit attributable to RELX PLC shareholders 1,161 (2) (4) (5) 1,150
Reported EPS 56.3p (0.1p) (0.2p) (0.2p) 55.8p
Statement of financial position
Right-of-use assets 20 – – 306 326
Borrowings (including lease liability) (4,843) 17 – (430) (5,256)
Finance lease receivable – – – 63 63
Deferred income (1,941) – (67) – (2,008)
2017 as
reported
£m
IFRS 9
impact
£m
IFRS 15
impact
£m
IFRS 16
impact
£m
2017 as
restated
£m
Income statement
Revenue 7,355 – (14) – 7,341
Adjusted operating profit 2,284 – (11) 11 2,284
Reported operating profit 1,905 – (11) 11 1,905
Net finance costs (182) (2) – (15) (199)
Adjusted net profit attributable to RELX PLC shareholders 1,635 (2) (9) (4) 1,620
Reported net profit attributable to RELX PLC shareholders 1,659 (2) (9) – 1,648
Adjusted EPS 81.0p (0.1p) (0.5p) (0.2p) 80.2p
Reported EPS 82.2p (0.1p) (0.5p) – 81.6p
Statement of financial position
Right-of-use assets 16 – – 271 287
Borrowings (including lease liability) (4,886) 14 – (381) (5,253)
Finance lease receivable – – – 57 57
Deferred income (1,834) – (76) – (1,910)
IFRS 9 – Financial Instruments
IFRS 9 replaces the classification and measurement requirements in IAS 39 – Financial Instruments: Recognition and Measurement.
RELX has applied IFRS 9 retrospectively, with the exception of hedge accounting, which has been applied prospectively. The main impact
on previously reported numbers results in a reduction to borrowings of £14m as at 31 December 2017 (31 December 2016: reduction of
£17m), arising from a retrospective change in the treatment under IFRS 9 of certain debt modifications undertaken in 2012 and 2013.
IFRS 15 – Revenue from Contracts with Customers
IFRS 15 provides a single point of reference for revenue recognition, including guidance in relation to identification of the contract and
licensing arrangements. RELX has adopted IFRS 15 on a fully retrospective basis. The main impact of IFRS 15 is a change in the timing of
revenue recognition as a result of the guidance on identification and satisfaction of performance obligations under IFRS 15. The impact on
the income statement for the 12 months to 31 December 2017 is a decrease of £11m to both reported and adjusted operating profit (31
December 2016: decrease of £6m to reported operating profit).
128 RELX Annual report and financial statements 2018 | Financial statements and other information
1 Basis of preparation and accounting policies (continued)
IFRS 16 – Leases (early adopted and therefore effective for the 2018 financial year)
IFRS 16 eliminates the distinction between operating and finance leases and requires lessees to recognise all leases with a lease term of
greater than 12 months in the statement of financial position. RELX has adopted this standard a year earlier than the mandatory effective
date of 1 January 2019. IFRS 16 has been adopted on a fully retrospective basis.
The change in accounting standard results in both an asset and liability being brought onto the statement of financial position for the
majority of leases where RELX is a lessee. The asset is then depreciated, and interest expense recognised over the life of the lease. The
standard also gives guidance on the recognition of subleases, which results in finance sublease receivables being recognised on the
balance sheet. As at 31 December 2017, the restated statement of financial position includes additional right-of-use assets of £271m,
finance lease receivables of £57m and additional lease liabilities of £381m (31 December 2016:right-of-use assets of £306m, finance
lease receivables of £63m and lease liabilities of £430m).
The impact on the income statement for the 12 months to 31 December 2017 is an increase of £11m to both reported and adjusted
operating profit (31 December 2016: £6m increase to reported operating profit) offset by a net increase to finance costs of £15m (31
December 2016: £16m). After taking into account additional gains from disposals of right-of-use assets, there is no impact on reported
net profit.
Opening balance sheet adjustment
An opening balance sheet adjustment has been made at 1 January 2016 to reflect the impact of adoption on prior years. The adjustment
reduces opening retained earnings by £36m. This mainly relates to the recognition of lease expense earlier on in the lease under IFRS 16
and the deferral of revenue into future periods under IFRS 15.
Additionally, the other interpretations and amendments to IFRS effective for 2018 have not had a significant impact on the Group’s
accounting policies or reporting.
Standards, amendments and interpretations not yet effective
A number of amendments and interpretations have been issued which are not expected to have any significant impact on the accounting
policies and reporting.
2 Revenue and segment analysis
Accounting policy
The Group’s reported segments are based on the internal reporting structure and financial information provided to the Board.
Adjusted operating profit is the key segmental profit measure used by the Group in assessing performance. Adjusted operating
profit is reconciled to operating profit on page 131.
Revenue arises from the provision of products and services under contracts with customers. In all cases, revenue is recognised
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services, and is recognised when the customer obtains control of the good
or service.
Revenue is stated at the transaction price, which includes allowance for anticipated discounts and returns and excludes customer
sales taxes and other amounts to be collected on behalf of third parties.
Where the goods or services promised within a contract are distinct, they are identified as separate performance obligations and are
accounted for separately.
Where separate performance obligations are identified, total revenue is allocated on the basis of relative stand-alone selling prices
or management’s best estimate of relative value where stand-alone selling prices do not exist. Management estimates may include
a cost-plus method or comparable product approach, but must be supported by objective evidence. A residual approach may be
applied where it is not possible to derive a reliable management estimate for a specific component.
Revenue is recognised for the various categories as follows:
Subscriptions – revenue comprises income derived from the periodic distribution or update of a product. Subscription revenue is
generally invoiced in advance and recognised systematically over the period of the subscription. Recognition is either on a
straight-line basis where the transaction involves the transfer of goods and services to the customer in a consistent manner over
a specific period of time; or based on the value received by the customer where the goods and services are not delivered in a
consistent manner.
Transactional – revenue is recognised when control of the product is passed to the customer or the service has been performed.
For exhibitions, revenue primarily comprises income from exhibitors and attendees at exhibitions. Exhibition revenue is
recognised on occurrence of the exhibition.
Advertising – revenue is recognised on publication or over the period of online display.
Notes to the consolidated financial statements
for the year ended 31 December 2018
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 129
2 Revenue and segment analysis (continued)
RELX is a global provider of information-based analytics and decision tools for professional and business customers. Operating in four
major market segments: Scientific, Technical & Medical provides information and analytics that help institutions and professionals
progress science, advance healthcare and improve performance; Risk & Business Analytics provides customers with information-
based analytics and decision tools that combine public and industry-specific content with advanced technology and algorithms to assist
them in evaluating and predicting risk and enhancing operational efficiency; Legal provides legal, regulatory and business information
and analytics that helps customers increase their productivity, improve decision-making and achieve better outcomes; and Exhibitions
is a leading global events business. It combines face-to-face with data and digital tools to help customers learn about markets, source
products and complete transactions at over 500 events in almost 30 countries, attracting more than 7m participants.
ANALYSIS BY BUSINESS SEGMENT Revenue Adjusted operating profit
2018
£m
Restated
2017
£m
Restated
2016
£m
2018
£m
Restated
2017
£m
Restated
2016
£m
Scientific, Technical & Medical 2,538 2,473 2,318 942 914 854
Risk & Business Analytics 2,117 2,073 1,905 776 760 685
Legal 1,618 1,686 1,619 320 328 312
Exhibitions 1,219 1,109 1,047 313 287 271
Sub-total 7,492 7,341 6,889 2,351 2,289 2,122
Unallocated items – – – (5) (5) (8)
Total 7,492 7,341 6,889 2,346 2,284 2,114
ANALYSIS OF REVENUE BY GEOGRAPHICAL ORIGIN
2018
£m
Restated
2017
£m
Restated
2016
£m
North America 4,013 3,998 3,697
Europe 2,790 2,644 2,568
Rest of world 689 699 624
Total 7,492 7,341 6,889
Revenue by geographical origin from the United Kingdom in 2018 was £1,144m (2017: £1,085m; 2016: £1,048m).
2018 Scientific, Technical &
Medical
Risk & Business
Analytics Legal Exhibitions Total
Revenue by geographical market
North America 1,118 1,669 1,083 221 4,091
Europe 611 322 340 535 1,808
Rest of world 809 126 195 463 1,593
Total revenue 2,538 2,117 1,618 1,219 7,492
Revenue by format
Electronic 2,094 2,030 1,338 51 5,513
Face-to-face 7 36 10 1,168 1,221
Print 437 51 270 – 758
Total revenue 2,538 2,117 1,618 1,219 7,492
Revenue by type
Subscriptions 1,877 765 1,247 – 3,889
Transactional 615 1,322 365 1,219 3,521
Advertising 46 30 6 – 82
Total revenue 2,538 2,117 1,618 1,219 7,492
Revenue by geographical market from the United Kingdom in 2018 was £527m (2017: £521m; 2016: £502m).
130 RELX Annual report and financial statements 2018 | Financial statements and other information
2 Revenue and segment analysis (continued)
2017 Scientific, Technical &
Medical
Risk & Business
Analytics Legal Exhibitions Total
Revenue by geographical market
North America 1,045 1,658 1,145 230 4,078
Europe 617 308 340 429 1,694
Rest of world 811 107 201 450 1,569
Total revenue 2,473 2,073 1,686 1,109 7,341
Revenue by format
Electronic 1,995 1,967 1,384 42 5,388
Face-to-face 10 38 7 1,067 1,122
Print 468 68 295 – 831
Total revenue 2,473 2,073 1,686 1,109 7,341
Revenue by type
Subscriptions 1,776 732 1,291 1 3,800
Transactional 646 1,301 389 1,108 3,444
Advertising 51 40 6 – 97
Total revenue 2,473 2,073 1,686 1,109 7,341
2016 Scientific, Technical &
Medical
Risk & Business
Analytics Legal Exhibitions Total
Revenue by geographical market
North America 960 1,499 1,106 210 3,775
Europe 605 322 330 454 1,711
Rest of world 753 84 183 383 1,403
Total revenue 2,318 1,905 1,619 1,047 6,889
Revenue by format
Electronic 1,834 1,758 1,321 35 4,948
Face-to-face 10 37 7 1,012 1,066
Print 474 110 291 – 875
Total revenue 2,318 1,905 1,619 1,047 6,889
Revenue by type
Subscriptions 1,628 684 1,299 1 3,612
Transactional 631 1,172 314 1,046 3,163
Advertising 59 49 6 – 114
Total revenue 2,318 1,905 1,619 1,047 6,889
Around half of RELX’s revenue comes from subscription arrangements, and revenue for these is generally recognised on a straight line
basis over the time period covered by the agreement, in line with the provision of services. There are a number of multi-year contracts,
mainly in Risk & Business Analytics, where revenue is recognised on the achievement of delivery milestones or other specified
performance obligations. As at 31 December 2018, the aggregate amount of the transaction price of such contracts which relates to
performance obligations which have not yet been delivered was approximately £210m. It is expected that revenue will be recognised in
relation to this amount over the next ten years.
Notes to the consolidated financial statements
for the year ended 31 December 2018
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 131
2 Revenue and segment analysis (continued)
ANALYSIS BY BUSINESS SEGMENT Expenditure on
acquired goodwill and
intangible assets
Capital expenditure
additions
Amortisation of acquired
intangible assets
Depreciation and other
amortisation
2018
£m
2017
£m
2016
£m
2018
£m
Restated
2017
£m
Restated
2016
£m
2018
£m
2017
£m
2016
£m
2018
£m
Restated
2017
£m
Restated
2016
£m
Scientific, Technical & Medical 106 94 19 100 95 85 58 77 88 109 100 100
Risk & Business Analytics 852 – 288 92 83 67 161 141 147 73 64 56
Legal 30 6 83 145 153 154 33 52 73 147 142 135
Exhibitions 61 33 21 28 24 26 36 44 38 35 37 34
Total 1,049 133 411 365 355 332 288 314 346 364 343 325
Capital expenditure comprises additions to property, plant and equipment and internally developed intangible assets. Depreciation and
other amortisation includes depreciation on right-of-use assets. Amortisation of acquired intangible assets includes amounts in
respect of joint ventures of nil (2017: nil; 2016: £3m) in Legal and £1m (2017: £1m; 2016: £1m) in Exhibitions.
ANALYSIS OF NONCURRENT ASSETS BY GEOGRAPHICAL LOCATION
2018
£m
Restated
2017
£m
Restated
2016
£m
North America 8,692 7,408 8,307
Europe 1,996 2,016 1,987
Rest of world 461 459 489
Total 11,149 9,883 10,783
Non-current assets held in the United Kingdom totalled £988m (2017: £1,026m; 2016: £961m). Non-current assets by geographical location
exclude amounts relating to deferred tax, pension assets and derivative financial instruments.
Operating profit is reconciled to adjusted operating profit as follows:
RECONCILIATION OF OPERATING PROFIT TO ADJUSTED OPERATING PROFIT
2018
£m
Restated
2017
£m
Restated
2016
£m
Operating profit 1,964 1,905 1,708
Adjustments:
Amortisation of acquired intangible assets 288 314 346
Acquisition-related costs 84 56 51
Reclassification of tax in joint ventures 11 10 10
Reclassification of finance income in joint ventures (1) (1) (1)
Adjusted operating profit 2,346 2,284 2,114
The share of post-tax results of joint ventures of £32m (2017: £37m; 2016: £37m) included in operating profit comprised nil
(2017: £5m; 2016: £10m) relating to Legal, £31m (2017: £32m; 2016: £27m) relating to Exhibitions and £1m (2017: nil; 2016: nil) relating to
Risk & Business Analytics.
3 Operating profit
Accounting policy
Share based remuneration
The fair value of share based remuneration is determined at the date of grant and recognised as an expense in the income statement
on a straight-line basis over the vesting period, taking account of the estimated number of shares that are expected to vest. Market
based performance criteria are taken into account when determining the fair value at the date of grant. Non-market based performance
criteria are taken into account when estimating the number of shares expected to vest. The fair value of share based remuneration
is determined by use of a binomial or Monte Carlo simulation model as appropriate. All of the Group’s share based remuneration is
equity settled.
132 RELX Annual report and financial statements 2018 | Financial statements and other information
3 Operating profit (continued)
Operating profit is stated after charging/(crediting) the following:
Note
2018
£m
Restated
2017
£m
Restated
2016
£m
Staff costs
Wages and salaries 1,959 1,926 1,767
Social security costs 215 213 198
Pensions 6 135 95 111
Share based remuneration 41 39 38
Total staff costs 2,350 2,273 2,114
Depreciation and amortisation
Amortisation of acquired intangible assets 15 287 313 342
Share of joint ventures’ amortisation of acquired intangible assets 1 1 4
Amortisation of internally developed intangible assets 15 225 203 189
Depreciation of property, plant and equipment 17 62 65 62
Depreciation of right-of-use assets 77 75 74
Total depreciation and amortisation 652 657 671
Other expenses and income
Cost of sales including pre-publication costs and inventory expenses 2,638 2,628 2,488
Operating lease rentals expense 18 28 35
Operating lease rentals income (3) (3) (6)
The amortisation of acquired intangible assets is included within administration and other expenses.
The Group provides a number of share based remuneration schemes to Directors and employees. The principal share based remuneration
schemes are the Executive Share Option Schemes (ESOS), the Long-Term Incentive Plan (LTIP), the Retention Share Plan (RSP) and the
Bonus Investment Plan (BIP). Share options granted under ESOS are exercisable after three years and up to ten years from the date of
grant at a price equivalent to the market value of the respective shares at the date of grant. Conditional shares granted under LTIP, RSP
and BIP are exercisable after three years for nil consideration if conditions are met. Other awards principally relate to all employee
share based saving schemes in the UK and the Netherlands. Further details are provided in the remuneration report on pages 85 to 105.
4 Auditor’s remuneration
2018
£m
2017
£m
2016
£m
Auditor’s remuneration
Payable to the auditors of RELX PLC 0.9 0.9 0.9
Payable to the auditors of the Group’s subsidiaries 5.9 5.9 5.3
Audit services 6.8 6.8 6.2
Audit-related assurance services 0.9 0.8 0.6
Total audit and audit-related assurance services 7.7 7.6 6.8
Tax services – – 0.4
Other services: Consulting – – 0.1
Other services: Due diligence and other transaction-related services 2.7 0.3 0.4
Total non-audit related services 2.7 0.3 0.9
Total auditor’s remuneration 10.4 7.9 7.7
Amounts payable to the auditors of the Group’s subsidiaries include amounts for the audit of internal controls over financial reporting
in accordance with the US Sarbanes-Oxley Act. Included in audit related assurance services for 2018 are £0.1m in fees for services relating
to RELX pension plans (2017: £0.1m). The amounts payable in 2017 and 2016 to the auditors of RELX PLC also reflect amounts payable to the
auditors of RELX NV. The previously reported 2017 fees paid to EY for audit services have been revised to include additional amounts for
expenses incurred and final fees for statutory audits which took place subsequent to the audit of the RELX consolidated accounts.
Notes to the consolidated financial statements
for the year ended 31 December 2018
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 133
5 Personnel
NUMBER OF PEOPLE EMPLOYED: FULLTIME EQUIVALENTS At 31 December Average during the year
2018 2017 2016 2018 2017 2016
Business segment
Scientific, Technical & Medical 7,900 7,500 7,500 7,700 7,500 7,300
Risk & Business Analytics 8,700 8,100 8,200 8,600 8,200 7,900
Legal 10,500 10,600 10,700 10,600 10,700 10,600
Exhibitions 4,200 4,000 4,000 4,100 4,000 3,900
Sub-total 31,300 30,200 30,400 31,000 30,400 29,700
Corporate/shared functions 800 800 800 800 800 900
Total 32,100 31,000 31,200 31,800 31,200 30,600
Geographical location
North America 13,800 13,500 13,700 13,700 13,600 13,500
United Kingdom 5,200 5,000 4,900 5,100 5,000 4,800
The Netherlands 1,200 1,300 1,400 1,300 1,400 1,500
Rest of Europe 2,800 2,800 2,800 2,800 2,800 2,800
Rest of world 9,100 8,400 8,400 8,900 8,400 8,000
Total 32,100 31,000 31,200 31,800 31,200 30,600
6 Pension schemes
Accounting policy
The expense of defined benefit pension schemes and other post-retirement employee benefits is determined using the projected
unit credit method and charged in the income statement as an operating expense, based on actuarial assumptions reflecting market
conditions at the beginning of the financial year. Actuarial gains and losses are recognised in full in the statement of comprehensive
income in the period in which they occur.
Past service costs and credits are recognised immediately at the earlier of when plan amendments or curtailments occur and when
related restructuring costs or termination benefits are recognised. Settlements are recognised when they occur.
Net pension obligations in respect of defined benefit schemes are included in the statement of financial position at the present value
of scheme liabilities, less the fair value of scheme assets. Where schemes are in surplus, i.e. assets exceed liabilities, the net
pension assets are separately included in the statement of financial position. Any net pension asset is limited to the extent that the
asset is recoverable.
The expense of defined contribution pension schemes and other employee benefits is charged in the income statement as incurred.
Critical judgement and key source of estimation uncertainty
At 31 December 2018, the Group operates defined benefit pension schemes in the UK and the US. These schemes require management
to exercise judgement in estimating the ultimate cost of providing post-employment benefits, especially given the length of each
scheme’s liabilities. Accounting for defined benefit pension schemes involves judgement about uncertain events, including the life
expectancy of the members, salary and pension increases, inflation, the future operation of each scheme and the rate at which the
future pension payments are discounted. Estimates for these factors are used in determining the pension cost and liabilities
reported in the financial statements. The estimates made around future developments of each of the critical assumptions are made
in conjunction with independent actuaries, and each scheme is subject to a periodic review by independent actuaries. Information
regarding the more significant assumptions used for valuation is provided below, together with a sensitivity analysis.
A number of pension schemes are operated around the world. The largest defined benefit schemes as at 31 December 2018 are in the UK
and the US.
Major defined benefit schemes in place at 31 December 2018
The UK scheme is a final salary scheme and is closed to new hires. Members accrue a portion of their final pensionable earnings based
on the number of years of service. The US scheme is a cash balance scheme and is closed to new hires. Members earn pay credits
dependent on age and years of service up to certain limits which are added to an account balance that accrues interest at specified
minimum rates. The US scheme was closed to future accruals effective 1 January 2019.
Each of the major defined benefit schemes is administered by a separate fund that is legally separated from the Group. The trustees
of the pension funds in the UK and plan fiduciaries of the US scheme are required by law to act in the interest of the funds’ beneficiaries.
In the UK, the trustees of the pension fund are responsible for the investment policy with regard to the assets of the fund. The board of
trustees consists of an equal number of company-appointed and member-nominated Directors. In the US, the fiduciary duties for the
scheme are allocated between committees which are staffed by senior employees of the Group; the investment committee has the
primary responsibility for the investment and management of plan assets. The funding of the Group’s major schemes reflects the
different rules within each jurisdiction.
134 RELX Annual report and financial statements 2018 | Financial statements and other information
6 Pension schemes (continued)
In the UK, the level of funding is determined by statutory triennial actuarial valuations in accordance with pensions legislation. Where the
scheme falls below 100% funded status, the Group and the scheme trustees must agree on how the deficit is to be remedied. The UK
Pensions Regulator has significant powers and sets out in codes and guidance the parameters for scheme funding.
The US scheme has an annual statutory valuation which forms the basis for establishing the employer contribution each year (subject
to ERISA and IRS minimums). Should the statutory funded status fall to below 100%, the US Pension Protection Act requires the deficit
to be rectified with additional contributions over a seven-year period.
The Group and the scheme trustees have completed the 2018 triennial valuation under which the Group has committed to providing
£176m of deficit funding contributions to the scheme over the period 2019 to 2022. Employer cash contributions to defined benefit
pension schemes in respect of 2019 are expected to be approximately £62m including a £44m pension deficit funding contribution
relating to the UK scheme recovery plan.
The pension expense in total, including amounts in relation to the UK and US defined benefit schemes, defined contribution schemes
and GMP equalisation cost, recognised in the income statement consists of:
2018
£m
2017
£m
2016
£m
Defined benefit pension expense (including past service cost for GMP equalisation in 2018) 47 4 36
Defined contribution pension expense 95 91 75
Total 142 95 111
£135m (2017: £95m; 2016: £111m) of the total pension cost is recognised within operating profit. In 2018 a past service cost was
recognised to account for the impact of GMP equalisation in the UK. In 2017 settlement and past service credits primarily relate to
changes to the UK scheme.
The amounts recognised in the income statement in respect of defined benefit pension schemes during the year are presented by major
scheme as follows:
2018 2017 2016
UK
£m
US
£m
Total
£m
UK
£m
US
£m
Total
£m
UK
£m
US
£m
Total
£m
Service cost 27 9 36 33 14 47 27 14 41
Settlement and past service cost/(credits) 11 – 11 (42) (1) (43) – (5) (5)
Defined benefit pension expense 38 9 47 (9) 13 4 27 9 36
Net interest on net defined benefit obligation 6 3 9 10 5 15 9 5 14
Net defined benefit pension expense 44 12 56 1 18 19 36 14 50
Net interest on net defined benefit pension scheme liabilities is presented within net finance costs in the income statement.
The significant valuation assumptions, determined for each major scheme in conjunction with the respective independent actuaries,
are presented below. The net defined benefit pension expense for each year is based on the assumptions and scheme valuations set at
31 December of the prior year.
AS AT 31 DECEMBER 2018 2017 2016
UK US UK US UK US
Discount rate 2.85% 4.20% 2.60% 3.55% 2.65% 4.00%
Inflation 3.15% 2.50% 3.15% 2.50% 3.25% 2.50%
Discount rates are set by reference to high-quality corporate bond yields.
Mortality assumptions make allowance for future improvements in longevity and have been determined by reference to applicable
mortality statistics. The average life expectancy assumptions are set out below:
AS AT 31 DECEMBER 2018 Male average life
expectancy
Female average
life expectancy
UK US UK US
Member currently aged 60 years 85 86 88 88
Member currently aged 45 years 87 87 90 89
Notes to the consolidated financial statements
for the year ended 31 December 2018
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 135
6 Pension schemes (continued)
The amount recognised in the statement of financial position in respect of defined benefit pension schemes at the start and end of the
year and the movements during the year were as follows:
2018 2017
UK
£m
US
£m
Total
£m
UK
£m
US
£m
Total
£m
Defined benefit obligation
At start of year (3,854) (1,075) (4,929) (3,883) (1,120) (5,003)
Service cost (27) (9) (36) (33) (14) (47)
Past service (cost)/credits (11) – (11) 42 1 43
Interest on pension scheme liabilities (98) (38) (136) (101) (42) (143)
Actuarial gain/(loss) on financial assumptions 91 85 176 45 (61) (16)
Actuarial gain/(loss) arising from experience assumptions 4 2 6 (39) 1 (38)
Contributions by employees (8) – (8) (8) – (8)
Benefits paid 131 56 187 123 60 183
Exchange translation differences – (61) (61) – 100 100
At end of year (3,772) (1,040) (4,812) (3,854) (1,075) (4,929)
Fair value of scheme assets
At start of year 3,589 1,012 4,601 3,390 977 4,367
Interest income on plan assets 92 35 127 91 37 128
Return on assets excluding amounts included in interest income (184) (89) (273) 181 106 287
Contributions by employer 39 7 46 42 43 85
Contributions by employees 8 – 8 8 – 8
Benefits paid (131) (56) (187) (123) (60) (183)
Exchange translation differences – 57 57 – (91) (91)
At end of year 3,413 966 4,379 3,589 1,012 4,601
Opening net deficit (265) (63) (328) (493) (143) (636)
Service cost (27) (9) (36) (33) (14) (47)
Net interest on net defined benefit obligation (6) (3) (9) (10) (5) (15)
Settlement and past service (cost)/credits (11) – (11) 42 1 43
Contributions by employer 39 7 46 42 43 85
Actuarial (losses)/gains (89) (2) (91) 187 46 233
Exchange translation differences – (4) (4) – 9 9
Overall net pension obligation (359) (74) (433) (265) (63) (328)
As at 31 December 2018, the defined benefit obligations comprised £4,582m (2017: £4,690m) in relation to funded schemes and £230m
(2017: £239m) in relation to unfunded schemes.
The weighted average duration of defined benefit scheme liabilities is 19 years in the UK (2017: 20 years) and 12 years in the US
(2017: 13 years). Deferred tax assets of £86m (2017: £66m) are recognised in respect of the pension scheme deficits.
A net pension asset has been recognised in relation to the US funded scheme after considering the guidance in IAS 19 – Employee
Benefits and IFRIC 14. The split between net pension obligations and net pension assets is as follows:
2018
£m
2017
£m
Net pension asset 6 22
Net pension obligation (439) (350)
Overall net pension obligation (433) (328)
136 RELX Annual report and financial statements 2018 | Financial statements and other information
6 Pension schemes (continued)
Amounts recognised in the statement of comprehensive income are set out below:
2018
£m
2017
£m
2016
£m
Gains and losses arising during the year:
Experience gains/(losses) on scheme liabilities 6 (38) 25
Experience (losses)/gains on scheme assets (273) 287 548
Actuarial gains/ (losses) on the present value of scheme liabilities due to changes in:
– discount rates 242 (102) (873)
– inflation – 69 (96)
– other actuarial assumptions (66) 17 134
(91) 233 (262)
Net cumulative losses at start of year (613) (846) (584)
Net cumulative losses at end of year (704) (613) (846)
The major categories and fair values of scheme assets at the end of the reporting period are as follows:
FAIR VALUE OF SCHEME ASSETS 2018 2017
UK
£m
US
£m
Total
£m
UK
£m
US
£m
Total
£m
Equities 1,128 115 1,243 1,252 143 1,395
Government bonds 1,224 224 1,448 1,395 221 1,616
Corporate bonds – 607 607 – 622 622
Property funds and ground leases 723 – 723 620 – 620
Structured debt and direct lending 290 – 290 253 – 253
Cash and cash equivalents 26 4 30 46 18 64
Other 22 16 38 23 8 31
Total 3,413 966 4,379 3,589 1,012 4,601
Assets and obligations associated with the schemes are sensitive to changes in the market values of assets and the market-related
assumptions used to value scheme liabilities. In particular, adverse changes to asset values, discount rates or inflation could increase
future pension costs and funding requirements.
Typically, the Group’s schemes are exposed to: investment risks, whereby actual rates of return on plan assets may be below those
rates used to determine the defined benefit obligations, and interest rate risks, whereby scheme deficits may increase if bond yields
in the UK and the US decline and are not offset by returns in government and corporate bond portfolios. The schemes are also exposed
to other risks, such as unanticipated future increases in member longevity patterns and inflation, all potentially leading to an increase
in scheme liabilities.
Investment policies of each scheme are intended to ensure continuous payment of defined benefit pensions in the short-term and
long-term. Efforts are made to limit risks on marketable securities by adopting investment policies that diversify assets across
geographies and among equities, government and corporate bonds, property funds and cash. Asset allocations are dependent on
a variety of factors including the duration of scheme liabilities and the funded position of the plan.
All equities, government and corporate bonds have quoted prices in active markets.
Sensitivity analysis
The valuation of the Group’s pension scheme liabilities involves significant actuarial assumptions, being the life expectancy of the
members, inflation and the rate at which the future pension payments are discounted. Differences arising from actual experience or future
changes in assumptions may materially affect future pension charges. In particular, changes in assumptions for discount rates, inflation
and life expectancies that are reasonably possible would have the following approximate effects on the defined benefit pension obligations:
£m
Increase/decrease of 0.25% in discount rate 207
Increase/decrease of 0.25% in the expected inflation rate 94
Increase/decrease of one year in assumed life expectancy 177
The above analysis has been calculated on the same basis used to determine the defined benefit obligation recognised in the statement
of financial position. There has been no change in the methods used to prepare the analysis compared with prior years. This sensitivity
analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that changes in the above
assumptions would occur in isolation as some of the assumptions may be correlated.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 137
Overview Business review Financial review Governance Financial statements and other information
7 Net finance costs
Accounting policy
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial period of
time to bring to use are capitalised. All other interest on borrowings is expensed as incurred. The cost of issuing borrowings is generally
expensed over the period of borrowing so as to produce a constant periodic rate of charge.
2018
£m
Restated
2017
£m
Restated
2016
£m
Interest on short-term bank loans, overdrafts and commercial paper (22) (10) (15)
Interest on term debt (161) (154) (161)
Interest on lease liabilities (14) (17) (18)
Total borrowing costs (197) (181) (194)
Losses on loans and derivatives not designated as hedges (10) (9) (15)
Fair value losses on designated fair value hedge relationships (1) – –
Net financing charge on defined benefit pension schemes (9) (15) (14)
Finance costs (217) (205) (223)
Interest on bank deposits 4 3 6
Interest income on net finance lease receivables 2 2 2
Fair value gains on designated fair value hedge relationships – 1 –
Gains on loans and derivatives not designated as hedges – – 2
Finance income 6 6 10
Net finance costs (211) (199) (213)
Losses of £8m (2017: gains of £63m; 2016: losses of £26m) on interest rate derivatives designated as cash flow hedges were recognised
in other comprehensive income and accumulated in the hedge reserve, and may be reclassified to the income statement in future
periods. Gains of £3m (2017: gains of £65m; 2016: losses of £27m) in total were transferred from the hedge reserve in the period. The
movements in 2017 included gains of £78m (2016: losses of £18m) related to foreign exchange movements on debt hedges which were
reclassified immediately to the income statement and offset £78m (2016: £18m gains) of foreign exchange losses on the related debt.
8 Disposals and other non-operating items
Accounting policy
Assets of businesses that are available for immediate sale in their current condition and for which a sales process is considered
highly probable to complete are classified as assets held for sale and are carried at the lower of carrying value and fair value less
costs to sell. Fair value is based on anticipated disposal proceeds, typically derived from firm or indicative offers from potential
acquirers. Non-current assets are not amortised or depreciated following their classification as held for sale. Liabilities of
businesses held for sale are also separately classified on the statement of financial position. Fair value movements in the venture
capital portfolio are reported within disposals and other items – see note 16.
2018
£m
Restated
2017
£m
Restated
2016
£m
Revaluation of investments (11) 5 (13)
(Loss)/gain on disposal of businesses and assets held for sale (22) 10 (23)
Net (loss)/gain on disposals and other non-operating items (33) 15 (36)
138 RELX Annual report and financial statements 2018 | Financial statements and other information
9 Taxation
Accounting policy
Tax expense comprises current and deferred tax. Current and deferred tax are charged or credited in the income statement except
to the extent that the tax arises from a transaction or event which is recognised, in the same or a different period, outside the income
statement (either in other comprehensive income, directly in equity, or through a business combination), in which case the tax
appears in the same statement as the transaction that gave rise to it.
Current tax is the amount of corporate income taxes expected to be payable or recoverable based on the profit for the period as
adjusted for items that are not taxable or not deductible, and is calculated using tax rates and laws that were enacted or substantively
enacted at the date of the statement of financial position. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. Provisions are established where appropriate
on the basis of amounts expected to be paid to the tax authorities.
Current tax includes amounts provided in respect of uncertain tax positions when management expects that, upon examination
of the uncertainty by a tax authority in possession of all relevant knowledge, it is more likely than not that an economic outflow will
occur. Changes in facts and circumstances underlying these provisions are reassessed at the date of each statement of financial
position, and the provisions are remeasured as required to reflect current information.
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the statement of financial position. Deferred tax is calculated using tax rates and laws that have been enacted or
substantively enacted at the end of the reporting period, and which are expected to apply when the related deferred tax asset
is realised or the deferred tax liability is settled.
Deferred tax liabilities are generally recognised for all taxable temporary differences but not recognised for taxable temporary
differences arising on investments in subsidiaries, associates and joint ventures where the reversal of the temporary difference
can be controlled and it is probable that the difference will not reverse in the foreseeable future. Deferred tax liabilities are not
recognised on temporary differences that arise from goodwill which is not deductible for tax purposes.
Deferred tax assets are recognised to the extent it is probable that taxable profits will be available against which the deductible
temporary differences can be utilised, and are reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are not recognised in respect of temporary differences that arise on initial recognition of assets
and liabilities acquired other than in a business combination. Deferred tax is not discounted.
Critical judgement and key source of estimation uncertainty
The Group is subject to tax in numerous jurisdictions, giving rise to complex tax issues that require management to exercise
judgement in making tax determinations. As a multinational enterprise, our tax returns in the countries in which we operate are
subject to tax authority audits as a matter of routine. While the Group is confident that tax returns are appropriately prepared and
filed, amounts are provided in respect of uncertain tax positions that reflect the risk with respect to tax matters under active
discussion with tax authorities, or which are otherwise considered to involve uncertainty.
Provisions against uncertain tax positions are measured using one of the following methods, depending on which of the methods
management expects will better predict the amount it will pay over to the tax authority:
The Single Best Estimate – where there is a single outcome that is more likely than not to occur. This will happen, for example,
where the tax outcome is binary (such as whether an entity can deduct an item of expenditure) or the range of possible outcomes
is narrow or concentrated on a single value. The most likely outcome may be that no tax is expected to be payable, in which case
the provision is nil; or
A Probability-Weighted Expected Value – where, on the balance of probabilities, something will be paid to the tax authority but
the possible outcomes are widely dispersed with low individual probabilities (i.e. there is no single outcome more likely than not
to occur). In this case, the provision is the sum of the probability-weighted amounts in the range.
In assessing provisions against uncertain tax positions, management uses in-house tax experts, professional firms and previous
experience to inform the evaluation of risk. However, it remains possible that uncertainties will ultimately be resolved at amounts
greater or smaller than the liabilities recorded.
In particular, although we report cross-border transactions undertaken between Group subsidiaries on an arm’s-length basis in
tax returns in accordance with OECD guidelines, transfer pricing relies on the exercise of judgement and it is frequently possible
for there to be a range of legitimate and reasonable views. This means that it is impossible to be certain that the returns basis will be
sustained on examination. Discussions with tax authorities relating to cross-border transactions and other matters are ongoing in
each of our major trading jurisdictions. Although the timing and amount of final resolution of these uncertain tax positions cannot
be reliably predicted, no significant impact on the profitability of the Group is expected in the near term.
Estimation of income taxes also includes assessments of the recoverability of deferred tax assets. Deferred tax assets are only
recognised to the extent that they are considered recoverable based on existing tax laws and forecasts of future taxable profits
against which the underlying tax deductions can be utilised. The recoverability of these assets is reassessed at the end of each
reporting period, and changes in recognition of deferred tax assets will affect the tax liability in the period of that reassessment.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 139
Overview Business review Financial review Governance Financial statements and other information
9 Taxation (continued)
2018
£m
Restated
2017
£m
Restated
2016
£m
Current tax
United Kingdom (71) (104) (80)
The Netherlands (72) (77) (51)
Rest of world (154) (258) (243)
Total current tax charge (297) (439) (374)
Deferred tax 5 374 73
Tax expense (292) (65) (301)
Cash tax paid in the year was £415m (2017: £449m; 2016: £402m), which is different to the tax expense for the year set out above.
There are a number of reasons why the cash tax payments in a particular year will be different from the tax expense in the accounts:
Deferred tax:
Tax expense includes deferred tax, which is an accounting adjustment arising from temporary differences;
Temporary differences occur when an item has to be included in the income statement in one year but is taxed in another year; and
For the purposes of acquisition accounting only, the Group recognises deferred tax liabilities arising on intangible assets. Any unwind
of these deferred tax liabilities from the amortisation of intangible assets does not result in cash tax payments.
Timing differences:
Tax payments relating to a particular year’s profits are typically due partly in the year and partly in the following year.
Prior period adjustments:
Current tax expense is the best estimate at the end of the period of cash tax expected to be paid; and
To the extent the final liability is higher or lower than that estimate, any cash tax impact will occur in a later period.
Items recorded in equity and other comprehensive income:
Some of the benefits of tax deductions related to share based payments, pensions and hedging are credited to equity or other
comprehensive income rather than to tax expense, and so the cash tax liability will be different to the current tax expense in the
income statement in years when those deductions are available.
Set out below is a reconciliation of the difference between tax expense for the period and the theoretical expense calculated by
multiplying accounting profit by the applicable tax rate.
We believe the most meaningful applicable rate is that obtained by multiplying the accounting profits and losses of all consolidated
entities by the applicable domestic rate in each of those entities’ jurisdictions.
The net tax expense charged on profit before tax differs from the theoretical amount that would arise using the weighted average of tax
rates applicable to accounting profits and losses of the consolidated entities, as follows:
2018
Restated
2017
Restated
2016
£m % £m % £m %
Profit before tax 1,720 1,721 1,459
Tax at average applicable rates (342) 19.9% (389) 22.6% (326) 22.4%
Tax effect of share of results of joint ventures 8 (0.5)% 7 (0.4)% 7 (0.5)%
Expenses not deductible for tax purposes (24) 1.4% (15) 0.9% (19) 1.3%
US state taxes (19) 1.1% (18) 1.0% (13) 0.9%
Non-deductible costs of share based remuneration (1) 0.1% (1) 0.1% (1) 0.1%
Non-deductible disposal-related gains and losses – 0.0% (36) 2.1% (8) 0.5%
Deferred tax assets of the period not recognised (24) 1.4% (10) 0.6% (2) 0.1%
Change in recognition of deferred tax assets or liabilities (15) 0.9% 16 (0.9)% 33 (2.3)%
Other adjustments in respect of prior periods 13 (0.8)% 35 (2.1)% 28 (1.9)%
Exceptional tax credit 112 (6.5)% 346 (20.1)% – 0.0%
Tax expense (292) 17.0% (65) 3.8% (301) 20.6%
The weighted average applicable tax rate for the year was 19.9% (2017: 22.6%, 2016: 22.4%), reflecting the applicable rates in the
countries where the Group operates. The Group’s future tax charge will be sensitive to the geographic mix of profits and losses and the
tax rates and laws in force in the jurisdictions in which we operate.
140 RELX Annual report and financial statements 2018 | Financial statements and other information
9 Taxation (continued)
In the UK, a reduction in the corporate tax rate from 19% to 17% from April 2020 was enacted in September 2016. In the US, the Tax Cuts and
Jobs Act which included a reduction in the federal corporate tax rate from 35% to 21% from January 2018 was enacted in December 2017. In
the Netherlands, a reduction in the corporate tax rate from 25% to 22.55% from 2020 and to 20.5% from 2021 was substantively enacted in
December 2018. In total, the deferred tax effect of changes in tax rates for the year was a tax credit of £8m (2017: £346m, 2016: £1m).
The effective tax rate of 17% (2017: 3.8%, 2016: 20.6%) is lower than the weighted average applicable tax rate mainly because of an
exceptional tax credit arising from the substantial resolution of certain prior year tax matters and the deferred tax effect of tax rate
reductions in the Netherlands and the US. In 2017, the exceptional tax credit related to a one-off non-cash credit from a deferred tax
adjustment arising from the US Tax Cuts and Jobs Act. On the basis of their size and non-recurring nature, the exceptional tax credits
have been excluded from adjusted earnings.
The following tax has been recognised in other comprehensive income or directly in equity during the year:
2018
£m
2017
£m
2016
£m
Tax on items that will not be reclassified to profit or loss
Tax on actuarial movements on defined benefit pension schemes 15 (59) 45
Tax on items that may be reclassified to profit or loss
Tax on fair value movements on cash flow hedges 9 (30) 19
Net tax credit/(debit) recognised in other comprehensive income 24 (89) 64
Tax (debit)/credit on share based remuneration recognised directly in equity (3) 8 10
The measurement of the US deferred tax assets and liabilities has also resulted in a charge of £1m in other comprehensive income.
2018
£m
Restated
2017
£m
Deferred tax assets 455 431
Deferred tax liabilities (830) (738)
Total (375) (307)
Movements in deferred tax liabilities and assets (before taking into consideration the offsetting of balances within the same jurisdiction)
are summarised as follows:
Deferred tax liabilities Deferred tax assets
Excess of tax
allowances
over
amortisation
£m
Acquired
intangible
assets
£m
Other
temporary
differences
£m
Excess of
amortisation
over tax
allowances
£m
Tax losses
carried
forward
£m
Pension
balances
£m
Other
temporary
differences
£m
Total
£m
Deferred tax (liability)/asset at
1 January 2017 (restated) (393) (767) (338) 263 70 145 352 (668)
Credit/(charge) to profit 97 298 2 (15) 22 – (30) 374
Credit/(charge) to equity/other
comprehensive income – – 7 – – (76) (20) (89)
Acquisitions – (2) – – – – – (2)
Exchange translation differences 29 45 27 9 (5) (3) (24) 78
Deferred tax (liability)/asset at
1 January 2018 (restated) (267) (426) (302) 257 87 66 278 (307)
Credit/(charge) to profit 75 13 13 (51) (32) 3 (16) 5
Credit/(charge) to equity/other
comprehensive income – – – – – 15 (3) 12
Acquisitions – (88) – – 37 – – (51)
Exchange translation differences (12) (26) (17) 1 4 2 14 (34)
Deferred tax (liability)/asset at
31 December 2018 (204) (527) (306) 207 96 86 273 (375)
Other deferred tax liabilities include temporary differences in respect of property, plant and equipment, capitalised development spend
and financial instruments. Other deferred tax assets include temporary differences in respect of share based remuneration provisions
and financial instruments.
As a result of exemptions on dividends from subsidiaries and capital gains on disposal there are no significant taxable temporary
differences associated with investments in subsidiaries, branches, associates and interests in joint arrangements.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 141
Overview Business review Financial review Governance Financial statements and other information
9 Taxation (continued)
Deferred tax assets in respect of tax losses and other deductible temporary differences have only been recognised to the extent that it is
more likely than not that sufficient taxable profits will be available to allow the asset to be recovered. Accordingly, no deferred tax asset
has been recognised in respect of unused trading losses and interest expenses of approximately £213m (2017: £143m) carried forward
at year end. The deferred tax asset not recognised in respect of these losses and interest expenses is approximately £52m (2017: £34m).
Of the unrecognised losses and interest expenses, £93m (2017: £30m) will expire if not utilised within ten years and £121m (2017: £113m)
will expire after more than ten years.
Deferred tax assets of approximately £4m (2017: £4m) have not been recognised in respect of tax losses and other temporary
differences carried forward of £24m (2017: £23m), which can only be used to offset future capital gains.
10 Earnings per share
Accounting policy
Earnings per share (‘EPS’) is calculated by taking the reported net profit attributable to shareholders and dividing this by the total
weighted average number of shares.
Adjusted earnings per share is calculated by dividing adjusted net profit attributable to RELX PLC shareholders by the total weighted
average number of shares.
EARNINGS PER SHARE FOR THE YEAR
ENDED 31 DECEMBER 2018
Restated
2017
Restated
2016
Net profit
attributable
to RELX PLC
shareholders
£m
Weighted
average
number
of shares
(millions)
EPS
(pence)
Net profit
attributable
to RELX PLC
shareholders
£m
Weighted
average
number
of shares
(millions)
EPS
(pence)
Net profit
attributable
to RELX PLC
shareholders
£m
Weighted
average
number
of shares
(millions)
EPS
(pence)
Basic earnings per share 1,422 1,977.2 71.9p 1,648 2,019.4 81.6p 1,150 2,062.3 55.8p
Diluted earnings per share 1,422 1,990.8 71.4p 1,648 2,035.2 81.0p 1,150 2,079.8 55.3p
The diluted figures are calculated after taking account of potential additional ordinary shares arising from share options and
conditional shares.
Since 2016, earnings per share has been calculated by taking the total Group net profit attributable to shareholders, and dividing this by
the total weighted average number of shares in issue. As the corporate simplification was done on the basis of a 1:1 share exchange, this
has not impacted the calculation of earnings per share in 2018, or the comparatives presented.
ADJUSTED EARNINGS PER SHARE
2018
Restated
2017
Restated
2016
Adjusted net
profit
attributable
to RELX PLC
shareholders
£m
Weighted
average
number
of shares
(millions)
Adjusted
EPS
(pence)
Adjusted net
profit
attributable to
RELX PLC
shareholders
£m
Weighted
average
number of
shares
(millions)
Adjusted
EPS
(pence)
Adjusted net
profit
attributable to
RELX PLC
shareholders
£m
Weighted
average
number of
shares
(millions)
Adjusted
EPS
(pence)
Adjusted earnings per share 1,674 1,977.2 84.7p 1,620 2,019.4 80.2p 1,473 2,062.3 71.4p
RECONCILIATION OF ADJUSTED NET PROFIT ATTRIBUTABLE TO RELX PLC SHAREHOLDERS
2018
£m
Restated
2017
£m
Restated
2016
£m
Net profit attributable to RELX PLC shareholders 1,422 1,648 1,150
Adjustments (post-tax):
Amortisation of acquired intangible assets 322 356 364
Acquisition-related costs 71 43 38
Net financing charge on defined benefit pension schemes 7 11 10
Disposals and other non-operating items 19 1 2
Other deferred tax credits from intangible assets* (55) (93) (91)
Exceptional tax credit (112) (346) –
Adjusted net profit attributable to RELX PLC shareholders 1,674 1,620 1,473
* Movements on deferred tax liabilities arising on acquired intangible assets that do not qualify for tax amortisation.
142 RELX Annual report and financial statements 2018 | Financial statements and other information
11 Statement of cash flows
Accounting policy
Cash and cash equivalents comprise cash balances, call deposits and other short-term highly liquid investments and are held in the
statement of financial position at fair value.
RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
2018
£m
Restated
2017
£m
Restated
2016
£m
Profit before tax 1,720 1,721 1,459
Disposals and other non-operating items 33 (15) 36
Net finance costs 211 199 213
Operating profit 1,964 1,905 1,708
Share of results of joint ventures (32) (37) (37)
Amortisation of acquired intangible assets 287 313 342
Amortisation of internally developed intangible assets 225 203 189
Depreciation of property, plant and equipment 62 65 62
Depreciation of right of use assets 77 75 74
Share based remuneration 41 39 38
Total non-cash items 692 695 705
(Increase)/decrease in inventories and pre-publication costs (7) 2 (24)
(Increase)/decrease in receivables (89) 37 (145)
Increase/(decrease) in payables 27 (76) 104
Increase in working capital (69) (37) (65)
Cash generated from operations 2,555 2,526 2,311
CASH FLOW ON ACQUISITIONS
Note
2018
£m
2017
£m
2016
£m
Purchase of businesses 12 (919) (117) (336)
Investment in joint ventures – (1) (1)
Deferred payments relating to prior year acquisitions (16) (13) (24)
Total (935) (131) (361)
RECONCILIATION OF NET BORROWINGS
Cash and
cash
equivalents
£m
Borrowings
£m
Related
derivative
financial
instruments
£m
Finance
lease
receivable
£m
2018
£m
Restated
2017
£m
Restated
2016
£m
At start of year 111 (5,253) 43 57 (5,042) (5,050) (4,095)
Increase/(decrease) in cash and cash equivalents 1 – – – 1 (45) 9
(Increase)/decrease in short-term bank loans,
overdrafts and commercial paper – (147) – – (147) 148 (271)
Issuance of term debt – (958) – – (958) (873) (603)
Repayment of term debt – 211 – – 211 712 474
Repayment of leases – 95 – (14) 81 78 74
Change in net borrowings resulting from cash flows 1 (799) – (14) (812) 20 (317)
Borrowings in acquired businesses – (12) – – (12) – –
Remeasurement and derecognition of leases – (12) – – (12) (6) (14)
Inception of leases – (31) – 3 (28) (36) (49)
Fair value and other adjustments to borrowings
and related derivatives – (7) (18) – (25) (11) (24)
Exchange translation differences 2 (251) – 3 (246) 41 (551)
At end of year 114 (6,365) 25 49 (6,177) (5,042) (5,050)
Net borrowings comprise cash and cash equivalents, loan capital, lease liabilities and receivables, promissory notes, bank and other
loans, derivative financial instruments that are used to hedge certain borrowings and adjustments in respect of cash collateral
received/paid. The Group monitors net borrowings as part of capital and liquidity management.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 143
Overview Business review Financial review Governance Financial statements and other information
12 Acquisitions
During the year, a number of acquisitions were made. The net assets of the businesses acquired are incorporated at their fair value to the
Group. Provisional fair values of the consideration given and of the assets and liabilities acquired are summarised below.
Fair value
2018
£m
Fair value
2017
£m
Fair value
2016
£m
Goodwill 626 77 222
Intangible assets 423 56 189
Property, plant and equipment 5 – 1
Current assets 24 3 12
Non current assets 12 – –
Current liabilities (72) (16) (20)
Borrowings (12) – –
Deferred tax (51) (2) (35)
Net assets acquired 955 118 369
Consideration (after taking account of £27m (2017: £7m; 2016: £10m) net cash acquired) 955 118 369
Less: consideration deferred to future years (36) (1) (15)
Less: acquisition date fair value of equity interest – – (18)
Net cash flow 919 117 336
On 21 February 2018 RELX acquired 100% of the share capital of ThreatMetrix. ThreatMetrix’s technology analyses connections among
devices, locations, anonymised identity information and threat intelligence, and combines this data with behavioural analytics to identify
high-risk digital behaviour and transactions in real time. The total consideration for this acquisition, net of cash acquired, was £585m,
which represents the fair value of the consideration translated at the acquisition date foreign exchange rate. The main assets and
liabilities recognised on acquisition were £373m relating to goodwill, £279m relating to intangible assets, £41m relating to trade and
other payables and £34m of net deferred tax liability. These balances are included in the table above.
Goodwill, being the excess of the consideration over the net tangible and intangible assets acquired, represents benefits which do not
qualify for recognition as intangible assets, including: the ability of a business to generate higher returns than individual assets; skilled
workforces; and acquisition synergies that are specific to the Group. In addition, goodwill arises on the recognition of deferred tax
liabilities in respect of intangible assets for which amortisation does not qualify for tax deductions.
The fair values of the assets and liabilities acquired in the last 12 months are provisional pending the completion of the valuation
exercises. Final fair values will be incorporated in the 2019 consolidated financial statements. There were no significant adjustments
to the provisional fair values of prior year acquisitions established in 2017.
The businesses acquired in 2018 contributed £98m to revenue, increased adjusted operating profit by £7m, decreased net profit by
£34m (after charging £41m of integration costs and amortisation of acquired intangibles) and contributed £4m to net cash outflow from
operating activities for the part year under the Group’s ownership and before taking account of acquisition financing costs. Had the
businesses been acquired at the beginning of the year, on a pro forma basis the Group revenues, adjusted operating profit and net profit
attributable to RELX PLC shareholders for the year would have been £7,531m, £2,347m and £1,420m respectively, before taking account
of acquisition financing costs.
Subsequent to the 31 December 2018, Reed Exhibitions acquired Mack Brooks.
13 Equity dividends
ORDINARY DIVIDENDS PAID IN THE YEAR 2018
£m
2017
£m
2016
£m
RELX PLC 420 400 356
RELX NV 376 362 327
Total 796 762 683
The RELX NV amount shown relates to dividends paid prior to the corporate simplification.
Ordinary dividends declared and paid in the year ended 31 December 2018, in amounts per ordinary share, comprise: a 2017 final
dividend of 27.7p (2017: 25.7p; 2016: 22.3p) and a 2018 interim dividend of 12.4p (2017: 11.7p; 2016: 10.25p), giving a total of 40.1p (2017: 37.4p;
2016: 32.55p) for RELX PLC shareholders. Former shareholders in RELX NV received a 2017 final dividend of €0.316 (2017: €0.301; 2016:
€0.288) and a 2018 interim dividend of €0.140 (2017: €0.132; 2016: €0.122).
The Directors of RELX PLC have proposed a final dividend of 29.7p (2017: 27.7p; 2016: 25.7p), giving a total for the financial year of 42.1p
(2017: 39.4p; 2016: 35.95p). The total cost of funding the proposed final dividend is expected to be £583m, for which no liability has been
recognised at the statement of financial position date.
144 RELX Annual report and financial statements 2018 | Financial statements and other information
13 Equity dividends (continued)
The Employee Benefit Trust has currently waived the right to receive dividends on RELX PLC shares. This waiver has been applied to
dividends paid in 2018, 2017 and 2016.
14 Goodwill
Accounting policy
On the acquisition of a subsidiary or business, the purchase consideration is allocated between the net tangible and intangible
assets on a fair value basis, with any excess purchase consideration representing goodwill. Goodwill arising on acquisitions also
includes amounts corresponding to deferred tax liabilities recognised in respect of acquired intangible assets.
Goodwill is recognised as an asset and reviewed for impairment when there is an indicator that the asset may be impaired and
at least annually. Any impairment is recognised immediately in the income statement and not subsequently reversed.
On disposal of a subsidiary or business, the attributable amount of goodwill is included in the determination of the profit or loss
on disposal.
At each statement of financial position date, the carrying amounts of tangible and intangible assets and goodwill are reviewed to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount, which is the higher of value in use and fair value less costs to sell, of the asset is estimated in order to determine
the extent, if any, of the impairment loss. Where the asset does not generate cash flows that are independent from other assets, value
in use estimates are made based on the cash flows of the cash generating unit to which the asset belongs. Intangible assets with an
indefinite useful life are tested for impairment at least annually and whenever there is any indication that the asset may be impaired.
If the recoverable amount of an asset or cash generating unit is estimated to be less than its net carrying amount, the net carrying
amount of the asset or cash generating unit is reduced to its recoverable amount. Impairment losses are recognised immediately
in the income statement in administration and other expenses.
Critical judgement and key source of estimation uncertainty
The carrying amounts of goodwill and indefinite lived intangible assets in each business are reviewed for impairment at least
annually. The carrying amounts of all other intangible assets are reviewed where there are indications of possible impairment.
An impairment review involves a comparison of the carrying value of the asset with estimated values in use based on the latest
management cash flow projections, approved by the Board. Key areas of judgement in estimating the values in use of businesses are
the growth in cash flows over a forecast period of up to five years, the long-term growth rate assumed thereafter and the discount
rate applied to the forecast cash flows. A description of the key assumptions and sensitivities is provided below.
2018
£m
2017
£m
At start of year 5,965 6,392
Acquisitions 626 77
Disposals/reclassified as held for sale (25) (72)
Transfers – 11
Exchange translation differences 333 (443)
At end of year 6,899 5,965
Transfers relate to movements in goodwill as a result of the finalisation of the accounting for prior year acquisitions.
The carrying amount of goodwill is after cumulative amortisation of £1,222m (2017: £1,173m), which was charged prior to the adoption
of IFRS, and £9m (2017: £9m) of subsequent impairment charges recorded in prior years.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 145
Overview Business review Financial review Governance Financial statements and other information
14 Goodwill (continued)
Impairment review
Impairment testing of goodwill and indefinite lived intangible assets is performed at least annually in accordance with the methodology
described above. There were no charges for impairment of goodwill in 2018 (2017: nil).
Goodwill is compiled and assessed among groups of cash generating units, which represent the lowest level at which goodwill is
monitored by management. Typically, acquisitions are integrated into existing business units, and the goodwill arising is allocated to the
groups of cash generating units (CGUs) that are expected to benefit from the synergies of the acquisition. As the business areas have
become increasingly integrated and globalised, the current CGU allocation reflects the global leverage of assets, skills, knowledge and
technology platforms, and the monitoring of goodwill by management.
GOODWILL 2018
£m
2017
£m
Scientific, Technical & Medical 1,620 1,479
Risk & Business Analytics 3,283 2,595
Legal 1,465 1,390
Exhibitions 531 501
Total 6,899 5,965
The key assumptions used for each group of cash generating units are disclosed below:
KEY ASSUMPTIONS 2018 2017
Pre-tax
discount
rate
Nominal
long-term
market
growth rate
Pre-tax
discount rate
Nominal
long-term
market
growth rate
Scientific, Technical & Medical 10.0% 3% 10.1% 3%
Risk & Business Analytics 11.5% 3% 12.3% 3%
Legal 12.2% 2% 12.7% 2%
Exhibitions 12.7% 3% 12.6% 3%
The pre-tax discount rates used are based on the Group’s weighted average cost of capital, adjusted to reflect a risk premium specific to
each business. Nominal long-term market growth rates, which are applied after the forecast period of up to five years, do not exceed the
long-term average growth prospects for the sectors and territories in which the businesses operate.
A sensitivity analysis has been performed based on changes in key assumptions considered to be reasonably possible by management:
an increase in the discount rate of 0.5%, a decrease in the compound annual growth rate for cash flow in the five-year forecast period of
2.0%, and a decrease in the nominal long-term market growth rates of 0.5%. The sensitivity analysis shows that no impairment charges
would result from these scenarios.
146 RELX Annual report and financial statements 2018 | Financial statements and other information
15 Intangible assets
Accounting policy
Intangible assets acquired as part of a business combination are stated in the statement of financial position at their fair value as
at the date of acquisition, less accumulated amortisation. Internally generated intangible assets are stated in the statement of
financial position at the directly attributable cost of creation of the asset, less accumulated amortisation.
Intangible assets acquired as part of business combinations comprise: market-related assets (e.g. trademarks, imprints, brands);
customer-related assets (e.g. subscription bases, customer lists, customer relationships); editorial content; software and systems
(e.g. application infrastructure, product delivery platforms, in-process research and development); contract-based assets
(e.g. publishing rights, exhibition rights, supply contracts); and other intangible assets. Internally generated intangible assets
typically comprise software and systems development where an identifiable asset is created that is probable to generate future
economic benefits.
Intangible assets, other than journal titles determined to have indefinite lives, are amortised on a straight-line basis over their
estimated useful lives. The estimated useful lives of intangible assets with finite lives are as follows: market and customer-related
assets – 3 to 40 years; content, software and other acquired intangible assets – 3 to 20 years; and internally developed intangible
assets – 3 to 10 years. Journal titles determined to have indefinite lives are not amortised and are subject to impairment review
at least annually, including a review of events and circumstances to ensure that they continue to support an indefinite useful life.
Critical judgements and key sources of estimation uncertainty
On acquisition of a subsidiary or business, the purchase consideration is allocated between the net tangible and intangible assets
other than goodwill on a fair value basis, with any excess purchase consideration representing goodwill. The valuation of acquired
intangible assets represents the estimated economic value in use, using standard valuation methodologies, including as
appropriate, discounted cash flow, relief from royalty and comparable market transactions. Acquired intangible assets are
capitalised and amortised systematically over their estimated useful lives, subject to impairment review. The assumptions used
are subject to management judgement.
Appropriate amortisation periods are selected based on assessments of the longevity of the brands and imprints, the strength
and stability of customer relationships, the market positions of the acquired assets and the technological and competitive risks
that they face. Certain intangible assets in relation to acquired science and medical publishing businesses have been determined
to have indefinite lives. The longevity of these assets is evidenced by their long-established and well-regarded journal titles, and
their characteristically stable market positions. The assumptions used are subject to management judgement.
Development spend encompasses investment in new products and other initiatives, ranging from the building of online delivery
platforms, to launch costs of new services, to building new infrastructure and applications. Launch costs and other ongoing
operating expenses of new products and services are expensed as incurred. The costs of building product applications, platforms
and infrastructure are capitalised as intangible assets, where the investment they represent has demonstrable value and the
technical and commercial feasibility is assured. Costs eligible for capitalisation must be incremental, clearly identified and directly
attributable to a particular project. The resulting assets are amortised over their estimated useful lives. Impairment reviews are
carried out at least annually where indicators of impairment are identified. Judgement is required in the assessment of the potential
value of a development project, the identification of costs eligible for capitalisation and the selection of appropriate asset lives.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 147
Overview Business review Financial review Governance Financial statements and other information
15 Intangible assets (continued)
Market and
customer-
related
£m
Content,
software
and other
£m
Total
acquired
intangible
assets
£m
Internally
developed
intangible
assets
£m
Total
£m
Cost
At 1 January 2017 3,872 3,679 7,551 2,550 10,101
Acquisitions 32 24 56 – 56
Additions – – – 304 304
Disposals/reclassified as held for sale (26) (76) (102) (42) (144)
Transfers (50) 27 (23) – (23)
Exchange translation differences (309) (162) (471) (121) (592)
At 1 January 2018 3,519 3,492 7,011 2,691 9,702
Acquisitions 310 113 423 – 423
Additions – – – 304 304
Disposals/reclassified as held for sale (15) (11) (26) (148) (174)
Exchange translation differences 211 130 341 99 440
At 31 December 2018 4,025 3,724 7,749 2,946 10,695
Accumulated amortisation
At 1 January 2017 1,893 3,139 5,032 1,465 6,497
Charge for the year 188 125 313 203 516
Disposals/reclassified as held for sale (16) (72) (88) (43) (131)
Exchange translation differences (158) (146) (304) (70) (374)
At 1 January 2018 1,907 3,046 4,953 1,555 6,508
Charge for the year 169 118 287 225 512
Disposals/reclassified as held for sale (15) (11) (26) (111) (137)
Exchange translation differences 105 113 218 60 278
At 31 December 2018 2,166 3,266 5,432 1,729 7,161
Net book amount
At 31 December 2017 1,612 446 2,058 1,136 3,194
At 31 December 2018 1,859 458 2,317 1,217 3,534
Transfers relate to movements in intangible assets as a result of the finalisation of the accounting for prior year acquisitions.
Included in content, software and other acquired intangible assets are assets with a net book value of £80m (2017: £120m) that arose
on acquisitions completed prior to the adoption of IFRS that have not been allocated to specific categories of intangible assets. Internally
developed intangible assets typically comprise software and systems development where an identifiable asset is created that is
expected to generate future economic benefits.
Included in market and customer-related intangible assets are £119m (2017: £112m) of journal titles relating to Scientific, Technical &
Medical determined to have indefinite lives based on an assessment of their historical longevity and stable market positions. Indefinite
lived intangibles are tested for impairment at least annually.
148 RELX Annual report and financial statements 2018 | Financial statements and other information
16 Investments
Accounting policy
Investments, other than investments in joint arrangements and associates, are stated in the statement of financial position at fair
value. Changes in the fair value of investments held as part of the venture capital portfolio are reported in disposals and other
non-operating items in the income statement. All items recognised in the income statement relating to investments, other than
investments in joint arrangements and associates, are reported as disposals and other non-operating items.
Venture capital investments and equity investments represent interests in unlisted securities. The fair value of unlisted securities is
based on management’s estimate of fair value based on standard valuation techniques, including market comparisons and discounts of
future cash flows, having regard to maximising the use of observable inputs and adjusting for risk. Advice from valuation experts
is used as appropriate.
All joint arrangements are classified as joint ventures because the Group shares joint control and has rights to the net assets of the
arrangements. Investments in joint ventures and associates are accounted for under the equity method and stated in the statement
of financial position at cost as adjusted for post-acquisition changes in the Group’s share of net assets, less any impairment in value.
2018
£m
2017
£m
Investments in joint ventures 104 102
Equity investments – 2
Venture capital investments 151 139
Total 255 243
The value of venture capital investments and equity investments has been determined by reference to other observable market inputs
or, when these are not available, by reference to inputs we believe would reflect the assumptions market participants would use. Gains
and losses included in the consolidated income statement are provided in note 8.
An analysis of changes in the carrying value of investments in joint ventures is set out below:
2018
£m
2017
£m
At start of year 102 102
Share of results of joint ventures 32 37
Dividends received from joint ventures (30) (38)
Additions 2 2
Exchange translation differences (2) (1)
At end of year 104 102
Summarised aggregate information in respect of the Group’s share of joint ventures is set out below:
RELX’s share
2018
£m
2017
£m
Revenue 101 101
Net profit for the year 32 37
Total assets 96 85
Total liabilities (49) (42)
Net assets 47 43
Goodwill 57 59
Total 104 102
The Group’s consolidated other comprehensive income includes no income or losses relating to joint ventures in either period.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 149
Overview Business review Financial review Governance Financial statements and other information
17 Property, plant and equipment
Accounting policy
Property, plant and equipment are stated in the statement of financial position at cost less accumulated depreciation. No depreciation
is provided on freehold land. Freehold buildings and long leaseholds are depreciated over their estimated useful lives up to a
maximum of 50 years. Short leases are written off over the duration of the lease. Depreciation is provided on other assets on a
straight-line basis over their estimated useful lives as follows:
– land and buildings: land – not depreciated; leasehold improvements – shorter of life of lease and 10 years;
– fixtures and equipment: plant – 3 to 20 years; office furniture, fixtures and fittings – 5 to 10 years; computer systems,
communication networks and equipment – 3 to 7 years.
2018
Restated
2017
Land and
buildings
£m
Fixtures and
equipment
£m
Total
£m
Land and
buildings
£m
Fixtures and
equipment
£m
Total
£m
Cost
At start of year 217 599 816 231 630 861
Acquisitions – 5 5 – – –
Capital expenditure 5 51 56 5 46 51
Disposals/reclassified
as held for sale (8) (40) (48) (3) (40) (43)
Exchange translation differences 9 25 34 (16) (37) (53)
At end of year 223 640 863 217 599 816
Accumulated depreciation
At start of year 137 485 622 139 499 638
Charge for the year 9 53 62 9 56 65
Disposals/reclassified
as held for sale (6) (40) (46) (1) (39) (40)
Exchange translation differences 6 21 27 (10) (31) (41)
At end of year 146 519 665 137 485 622
Net book amount 77 121 198 80 114 194
No depreciation is provided on freehold land of £14m (2017: £14m).
Amounts relating to right of use assets under IFRS 16 can be found in note 23.
150 RELX Annual report and financial statements 2018 | Financial statements and other information
18 Financial instruments
Accounting policy
Financial instruments comprise investments (other than investments in joint ventures or associates), trade receivables, cash and
cash equivalents, payables and accruals, borrowings and derivative financial instruments.
Investments (other than investments in joint ventures and associates) are described in note 16. The fair value of such investments is
based on standard valuation techniques, including market comparisons and discounts of future cash flows, having regard to
maximising the use of observable inputs and adjusting for risk. (These investments are typically classified as either Level 2 or 3 in
the IFRS 13 fair value hierarchy).
Trade receivables are carried in the statement of financial position at invoiced value less allowance for estimated irrecoverable
amounts. Irrecoverable amounts are estimated based on the ageing of trade receivables, experience and circumstance. Borrowings
and payables are recorded initially at fair value and subsequently carried at amortised cost (other than fixed rate borrowings in
designated hedging relationships for which the carrying amount of the hedged portion of the borrowings is subsequently adjusted
for the gain or loss attributable to the hedged risk).
Derivative financial instruments are used to hedge interest rate and foreign exchange risks. Where an effective hedge is in place
against changes in the fair value of fixed rate borrowings, the hedged borrowings are adjusted for changes in fair value attributable
to the risk being hedged with a corresponding income or expense included in the income statement within finance costs. The
offsetting gains or losses from remeasuring the fair value of the related derivatives are also recognised in the income statement
within finance costs. When the related derivative expires, is sold or terminated, or no longer qualifies for hedge accounting, the
cumulative change in fair value of the hedged borrowing is amortised in the income statement over the period to maturity of the
borrowing using the effective interest method.
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are
recognised (net of tax) in other comprehensive income and accumulated in the hedge reserve. With effect from 1 January 2018, the
fair value amounts relating to foreign currency basis spreads are recorded in a separate component of equity in the cost of hedging
reserve. If a hedged firm commitment or forecasted transaction results in the recognition of a non-financial asset or liability, then, at
the time that the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised
in other comprehensive income are included in the initial measurement of the asset or liability. For hedges that do not result in the
recognition of an asset or a liability, amounts deferred in the hedge reserve are recognised in the income statement in the same
period in which the hedged item affects net profit or loss. Any ineffective portion of hedges is recognised immediately in the income
statement.
Cash flow hedge accounting is discontinued when a hedging instrument expires or is sold, terminated or exercised, or no longer
qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in other
comprehensive income is either retained in the hedge reserve until the firm commitment or forecasted transaction occurs, or,
where a hedged transaction is no longer expected to occur, is immediately credited or expensed in the income statement.
Derivative financial instruments that are not designated as hedging instruments are recorded in the statement of financial position
at fair value, with changes in fair value recognised in the income statement.
The fair values of derivative financial instruments represent the replacement costs calculated using observable market rates of
interest and exchange. The fair value of long-term borrowings is calculated by discounting expected future cash flows at observable
market rates. (These instruments are accordingly classified as Level 2 in the IFRS 13 fair value hierarchy.)
The main financial risks faced by the Group are liquidity risk, market risk – comprising interest rate risk and foreign exchange risk –
and credit risk. Financial instruments are used to finance the Group's businesses and to manage interest rate and foreign exchange
risks. The Group’s businesses do not enter into speculative derivative transactions. Details of financial instruments subject to liquidity,
market and credit risks are described below.
Liquidity risk
The Group maintains a range of borrowing facilities and debt programmes to fund its requirements at competitive rates.
The balance of long-term debt, short-term debt and committed bank facilities is managed to provide security of funding, taking into
account the cash generation cycle of the business and the uncertain size and timing of acquisition spend. To accommodate the significant
free cash flow generated by the Group and to capitalise on an inexpensive source of funding, a meaningful portion of the overall debt
portfolio is typically kept short-term as long as there exists acceptable liquidity in the commercial paper markets and sufficient capacity
under committed credit lines. The Group's treasury policies ensure adequate liquidity by requiring that (a) no more than $1.5bn of term
debt matures in any 12-month period, (b) the sum of term debt maturing over the ensuing 12 months plus short-term borrowings is less
than the sum of available cash plus committed facilities and (c) minimum levels of borrowing with maturities over three and five years
are maintained.
The treasury policies ensure debt efficiency by (a) targeting certain levels of short-term borrowings across a given year, (b) maintaining
a weighted average maturity of the gross debt portfolio of approximately five years and (c) minimising surplus cash balances. From
time to time, based on cash flow and market conditions, the Group may redeem term debt early or repurchase outstanding debt in the
open market.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 151
Overview Business review Financial review Governance Financial statements and other information
18 Financial instruments (continued)
Debt is issued to meet the funding requirements of various jurisdictions and in the currencies that are needed. It is recognised that debt
can act as a natural translation hedge of earnings, net assets and net cash flow in currencies other than the reporting currency. For this
reason, the majority of the Group’s net debt is denominated in US dollars and euros, reflecting the Group’s largest geographical markets.
There were no changes to the Group’s long-term approach to capital and liquidity management during the year.
The remaining contractual maturities for borrowings and derivative financial instruments are shown in the table below. The table shows
undiscounted principal and interest cash flows and includes contractual gross cash flows to be exchanged as part of cross-currency
interest rate swaps and forward foreign exchange contracts where there is a legal right of set-off.
AT 31 DECEMBER 2018 Contractual cash flow
Carrying
amount
£m
Within
1 year
£m
1-2 years
£m
2-3 years
£m
3-4 years
£m
4-5 years
£m
More than
5 years
£m
Total
£m
Borrowings
Fixed rate borrowings (5,315) (752) (610) (552) (879) (732) (2,555) (6,080)
Floating rate borrowings (690) (686) – – – – (4) (690)
Lease liabilities (360) (104) (92) (75) (47) (30) (63) (411)
Derivative financial liabilities
Interest rate derivatives (15) (2) (2) (2) (2) (3) (8) (19)
Cross-currency interest rate swaps (1) (48) (21) (21) (21) (39) (557) (707)
Forward foreign exchange contracts (53) (1,498) (375) (181) (25) – – (2,079)
Derivative financial assets
Interest rate derivatives 21 12 13 3 1 5 3 37
Cross-currency interest rate swaps 13 33 8 8 8 25 553 635
Forward foreign exchange contracts 13 1,473 361 173 26 – – 2,033
Total (6,387) (1,572) (718) (647) (939) (774) (2,631) (7,281)
AT 31 DECEMBER 2017 RESTATED Contractual cash flow
Carrying
amount
£m
Within
1 year
£m
1-2 years
£m
2-3 years
£m
3-4 years
£m
4-5 years
£m
More than
5 years
£m
Total
£m
Borrowings
Fixed rate borrowings (4,393) (331) (703) (575) (518) (805) (2,198) (5,130)
Floating rate borrowings (469) (464) – – – – (5) (469)
Lease liabilities (391) (100) (91) (79) (64) (34) (82) (450)
Derivative financial liabilities
Interest rate derivatives (13) (1) (1) (2) (2) (4) (8) (18)
Cross-currency interest rate swaps (2) (258) (17) (18) (18) (18) (541) (870)
Forward foreign exchange contracts (42) (2,148) (418) (188) (41) – – (2,795)
Derivative financial assets
Interest rate derivatives 20 13 11 10 1 – – 35
Cross-currency interest rate swaps 42 246 7 7 7 7 554 828
Forward foreign exchange contracts 53 2,139 422 193 42 – – 2,796
Total (5,195) (904) (790) (652) (593) (854) (2,280) (6,073)
The carrying amount of derivative financial liabilities comprises £15m (2017: £15m) in relation to fair value hedges, £41m (2017: £30m) in
relation to cash flow hedges and £13m (2017: £12m) not designated as hedging instruments. The carrying amount of derivative financial
assets comprises £33m (2017: £20m) in relation to fair value hedges, £7m (2017: £81m) in relation to cash flow hedges and £7m (2017:
£14m) not designated as hedging instruments.
152 RELX Annual report and financial statements 2018 | Financial statements and other information
18 Financial instruments (continued)
At 31 December 2018, the Group had access to a $3,000m committed bank facility, consisting of a $1,750m tranche maturing in July 2023
and a $1,250m tranche maturing in July 2021, which was undrawn. This facility backs up short-term borrowings. All borrowings that
mature within the next two years can be covered by the facility and by utilising available cash resources.
The committed bank facility is subject to a financial covenant typical to the Group’s size and financial strength. The Group had significant
headroom within this covenant for the year ended 31 December 2018. There are no financial covenants in any outstanding public bonds.
Market risk
The Group’s primary market risks are interest rate fluctuations and exchange rate movements. Derivatives are used to manage the
risks associated with interest rate and exchange rate movements and the Group does not enter into speculative derivatives. Where the
impact of derivatives on the income statement and the statement of financial position could be significant, hedge accounting is applied
(subject to satisfying the required criteria) as described in ‘Hedge accounting’ below. Derivatives used by the Group for hedging a
particular risk are not specialised and are generally available from numerous sources. The impact of market risks on net post-
employment benefit obligations and taxation is excluded from the following market risk sensitivity analysis.
Interest rate exposure management
The Group’s interest rate exposure management policy aims to minimise interest costs with an acceptable level of year on year volatility.
To achieve this, the Group uses fixed rate term debt and interest rate swaps to give a target mix of fixed rate and floating rate borrowings.
Interest rate derivatives are used only to hedge an underlying risk and no net market positions are held.
At 31 December 2018, 45% of gross bank and bond borrowings were at fixed rate. A 100 basis point reduction in interest rates would
result in an estimated decrease in net finance costs of £32m (2017: £26m), based on the composition of financial instruments including
cash, cash equivalents, bank loans and commercial paper borrowings at 31 December 2018. A 100 basis point rise in interest rates would
result in an estimated increase in net finance costs of £32m (2017: £26m).
The impact on net equity of a theoretical change in interest rates as at 31 December 2018 is restricted to the change in carrying value
of floating rate to fixed rate interest rate derivatives in a designated cash flow hedge relationship and undesignated interest rate derivatives.
A 100 basis point reduction in interest rates would result in an estimated increase in net equity of £1m (2017: £2m) and a 100 basis point
increase in interest rates would reduce net equity by an estimated £1m (2017: £2m). The impact of a change in interest rates on the carrying
value of fixed rate borrowings in a designated fair value hedge relationship would be offset by the change in carrying value of the related
interest rate derivative. Fixed rate borrowings not in a designated hedging relationship are carried at amortised cost.
Foreign currency exposure management
Translation exposures arise on the earnings and net assets of individual businesses whose operational currencies are other than sterling.
Some of these exposures are offset by denominating borrowings in US dollars, euros and other currencies. Currency exposures on
transactions denominated in a foreign currency are generally hedged using forward contracts. In addition, recurring transactions and
future investment exposures may be hedged, in advance of becoming contractual. The precise policy differs according to the specific
circumstances of the individual businesses. Highly predictable future cash flows may be covered for transactions expected to occur during
the next 24 months (50 months for the Scientific, Technical & Medical subscription businesses) within limits defined according to the period
before the transaction is expected to become contractual. Cover takes the form of foreign exchange forward contracts. Further information
is provided in ‘Cash flow hedges’ below.
A theoretical weakening of all currencies by 10% against sterling at 31 December 2018 would decrease the carrying value of net
assets, excluding net borrowings, by £782m (2017: £650m). This would be offset to a degree by a decrease in net borrowings of £625m
(2017: £473m). A strengthening of all currencies by 10% against sterling at 31 December 2018 would increase the carrying value of net
assets, excluding net borrowings, by £782m (2017: £650m) and increase net borrowings by £625m (2017: £473m).
A retranslation of the Group's net profit for the year, assuming a 10% weakening of all foreign currencies against sterling but excluding
transactional exposures, would reduce net profit by £127m (2017: £147m). A 10% strengthening of all foreign currencies against sterling
on this basis would increase net profit for the year by £127m (2017: £147m).
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 153
Overview Business review Financial review Governance Financial statements and other information
18 Financial instruments (continued)
Credit risk
The Group seeks to manage interest rate risk and limit foreign exchange risks described above by the use of financial instruments
and as a result has a credit risk from the potential non-performance by the counterparties to these financial instruments, which are
unsecured. The amount of this credit risk is normally restricted to the amounts of any hedge gain and not the principal amount being
hedged. The Group also has a credit exposure to counterparties for the full principal amount of cash and cash equivalents. Credit risks
are controlled by monitoring the credit quality of these counterparties, principally licensed commercial banks and investment banks
with strong long-term credit ratings, and the amounts outstanding with each of them.
The Group has treasury policies in place which do not allow concentrations of risk with individual counterparties and do not allow
significant treasury exposures with counterparties which are rated lower than A-/A3 by Standard & Poor’s, Moody’s and Fitch.
At 31 December 2018, cash and cash equivalents totalled £114m (2017: £111m), of which 93% (2017: 90%) was held with banks rated A-/A3
or better.
The Group also has credit risk with respect to trade receivables due from its customers, which include national and state governments,
academic institutions and large and small enterprises including law firms, book stores and wholesalers. The concentration of credit risk
from trade receivables is limited due to the large and broad customer base. Trade receivable exposures are managed locally in the
business units where they arise. Where appropriate, business units seek to minimise this exposure by taking payment in advance and
through management of credit terms. Allowance is made for bad and doubtful debts based on management’s assessment of the risk
taking into account the ageing profile, experience and circumstance. The maximum exposure to credit risk is represented by the
carrying amount of each financial asset, including derivative financial instruments, recorded in the statement of financial position.
Included within trade receivables are the following amounts which are past due, before considering loss allowance: past due up to one
month £181m (2017: £220m); past due two to three months £93m (2017: £97m); past due four to six months £37m (2017: £44m); and past
due greater than six months £35m (2017: £40m).
Hedge accounting
The hedging relationships that are designated under IFRS 9 – Financial Instruments with effect from 1 January 2018, and/or that were
previously designated under IAS 39 – Financial Instruments are described below.
Fair value hedges
The Group has entered into interest rate swaps and cross-currency interest rate swaps to hedge the exposure to changes in the fair
value of fixed rate borrowings due to interest rate and foreign currency movements which could affect the income statement. The table
below details the designated fair value hedge relationships that were in place at 31 December 2018, swapping fixed rate term debt issues
denominated in US dollars (USD) and euros to floating rate USD and euro debt respectively for the whole or part of their term, together
with the related fixed and floating rates.
FAIR VALUE HEDGE RELATIONSHIPS 31 December
2018
Principal
amount
£m
31 December
2017
Principal
amount
£m Fixed rate Floating rate
€550m loan notes and €550m interest rate swaps maturing 2020 (494) (489) 2.5% LIBOR+1.1%
€500m bond and €500m interest rate swaps maturing 2021 (449) (444) 0.4% LIBOR+0.3%
$700m bond and $700m interest rate swaps maturing 2023 (549) 0 3.5% LIBOR+0.8%
€500m bond and €500m interest rate swaps maturing 2024 (449) (444) 1.0% LIBOR+0.7%
€600m bond and €600m/$669.3m cross-currency interest rate swaps maturing 2025 (525) (495) 1.3% LIBOR+1.3%
$200m bond and $200m interest rate swaps maturing 2027 (157) (148) 7.2% LIBOR+5.8%
(2,623) (2,020)
154 RELX Annual report and financial statements 2018 | Financial statements and other information
18 Financial instruments (continued)
The gains and losses on the borrowings and related derivatives designated as fair value hedges, which are included in the income
statement as part of finance costs, together with the total carrying values of the borrowings and related derivatives included in the
statement of financial position, for the three years ended 31 December 2018, 2017 and 2016 were as follows:
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
AND CARRYING VALUES 1 January
2018
£m
Fair value
movement
gain/(loss)
£m
Exchange
gain/(loss)
£m
31 December
2018
£m
Carrying
values
£m
USD debt 12 – 1 13 (701)
Related interest rate swaps (12) (1) (1) (14) (14)
– (1) – (1) (715)
EUR debt (17) (21) (1) (39) (1,952)
Related interest rate swaps 17 21 1 39 39
– – – – (1,913)
Total relating to USD and EUR debt (5) (21) – (26) (2,653)
Total related interest rate swaps 5 20 – 25 25
Net loss on borrowings and related derivatives/ total carrying value – (1) – (1) (2,628)
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
AND CARRYING VALUES 1 January
2017
£m
Fair value
movement
gain/(loss)
£m
De-designated
£m
Exchange
gain/(loss)
£m
31 December
2017
£m
Carrying values
£m
USD debt 16 (1) (2) (1) 12 (147)
Related interest rate swaps (16) 1 2 1 (12) (12)
– – – – – (159)
EUR debt (33) 17 – (1) (17) (1,922)
Related interest rate swaps 32 (16) – 1 17 17
(1) 1 – – – (1,905)
Total relating to USD and EUR debt (17) 16 (2) (2) (5) (2,069)
Total related interest rate swaps 16 (15) 2 2 5 5
Net (loss)/gain on borrowings and related derivatives/
total carrying value (1) 1 – – – (2,064)
GAINS/(LOSSES) ON BORROWINGS AND RELATED DERIVATIVES
AND CARRYING VALUES 1 January
2016
£m
Fair value
movement
gain/(loss)
£m
De-designated
£m
Exchange
gain/(loss)
£m
31 December
2016
£m
Carrying values
£m
USD debt 2 13 – 1 16 (387)
Related interest rate swaps (2) (13) – (1) (16) (16)
– – – – – (403)
GBP debt (14) – 14 – – –
Related interest rate swaps 14 – (14) – – –
– – – – – –
EUR debt (9) (21) – (3) (33) (1,011)
Related interest rate swaps 8 21 – 3 32 32
(1) – – – (1) (979)
Total relating to USD, GBP and EUR debt (21) (8) 14 (2) (17) (1,398)
Total related interest rate swaps 20 8 (14) 2 16 16
Net loss on borrowings and related derivatives/ total
carrying value (1) – – – (1) (1,382)
All fair value hedges were highly effective throughout the three years ended 31 December 2018.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 155
Overview Business review Financial review Governance Financial statements and other information
18 Financial instruments (continued)
Gross borrowings as at 31 December 2018 included £23m (2017: £24m) in relation to fair value adjustments to borrowings previously
designated in a fair value hedge relationship which were de-designated in 2008. The related derivatives were closed out on de-designation
with a cash inflow of £62m. £3m (2017: £3m) of these fair value adjustments were amortised in the year as a reduction to finance costs.
Cash flow hedges
As part of the Group’s interest rate exposure management, it has entered into certain cross-currency interest rate derivatives,
individual components of which have been accounted for as cash flow hedges (with the remaining components accounted for as fair
value hedges, as described above). These comprised the following:
1 Interest rate derivatives which swapped a fixed rate CHF 275m bond, issued in June 2013 and maturing in December 2018, to floating
rate USD debt for the whole of its term. The component relating to the swap of fixed rate CHF coupons to fixed rate USD cash flows was
accounted for as a cash flow hedge under IAS 39 and was de-designated on 31 December 2017. The gains which had accumulated in the
cash flow hedge reserve up to the date of de-designation were reclassified to the income statement as part of finance costs during 2018.
2 Interest rate derivatives which swapped a fixed rate €600m bond, issued in May 2015 and maturing in May 2025, to floating rate USD
debt for the whole of its term. The component relating to the swap of floating rate euro cash flows to floating rate USD cash flows
(including credit margin) was accounted for as a cash flow hedge under IAS 39 up to 31 December 2017. From 1 January 2018 the
component relating to the swap of the euro credit margin to USD is being accounted for a cash flow hedge under IFRS 9, with the
amount associated with foreign currency basis spreads recorded in the cost of hedging reserve.
As part of the Group’s foreign currency exposure management, it has entered into forward foreign exchange contracts which fix the
exchange rate on a portion of future foreign currency subscription revenues forecast by the businesses for up to 50 months. These have
been accounted for as cash flow hedges under IAS 39 and under IFRS 9 of the forecast foreign currency revenues, with gains and losses
on the forward contracts deferred in the hedge reserve until the related revenue is recognised, at which time the accumulated gains and
losses are reclassified to the income statement.
Movements in the hedge reserve in 2017 and 2018 and, with effect from 1 January 2018, the cost of hedging reserve, including gains and
losses on cash flow hedging instruments, were as follows:
Interest rate
hedge reserve
£m
Cost of
hedging
reserve
£m
Foreign
currency
hedge
reserve
£m
Total
£m
Hedge reserve at 1 January 2017: gains/(losses) deferred 8 – (169) (161)
Gains arising in 2017 63 – 74 137
Amounts recognised in income statement (65) – 90 25
Exchange translation differences (1) – (2) (3)
Hedge reserve at 31 December 2017: gains/(losses) deferred 5 – (7) (2)
Reclassification on 1 January 2018 (1) 1 – –
Losses arising in 2018 – (8) (51) (59)
Amounts recognised in income statement (3) – 20 17
Exchange translation differences – – – –
Hedge reserve at 31 December 2018: gains/(losses) deferred 1 (7) (38) (44)
All cash flow hedges were highly effective throughout the two years ended 31 December 2018.
A deferred tax credit of £8m (2017: charge of £1m) in respect of the above gains and losses at 31 December 2018 was also deferred in the
hedge reserve.
Of the amounts recognised in the income statement in the year, losses of £20m (2017: £90m) were recognised in revenue, and gains
of £3m (2017: £65m) were recognised in finance costs. A tax credit of £3m (2017: £1m) was recognised in relation to these items.
The deferred gains and losses on foreign currency cash flow hedges at 31 December 2018 are currently expected to be recognised in the
income statement in future years as shown in the table below, together with the principal amount of hedges relating to each year and
their total carrying values included within derivative assets and liabilities in the statement of financial position:
Foreign
currency
hedge reserve
£m
Principal
amount of
hedges
£m
Carrying
values
£m
2019 (14) 481 (20)
2020 (13) 486 (13)
2021 (10) 228 (10)
2022 (1) 64 (1)
Total (38) 1,259 (44)
The cash flows for these hedges are expected to occur in line with the recognition of the gains and losses in the income statement, or in
the preceding year. These cash flows are included in the table on page 151.
156 RELX Annual report and financial statements 2018 | Financial statements and other information
19 Inventories and pre-publication costs
Accounting policy
Inventories and pre-publication costs are stated at the lower of cost, including appropriate attributable overhead, and estimated net
realisable value. Such costs typically comprise direct internal labour costs and externally commissioned editorial and other fees.
Pre-publication costs, representing costs incurred in the origination of content prior to publication, are expensed systematically
reflecting the expected sales profile over the estimated economic lives of the related products, generally up to five years.
Annual reviews are carried out to assess the recoverability of carrying amounts.
2018
£m
2017
£m
Raw materials 2 2
Pre-publication costs 171 157
Finished goods 39 38
Total 212 197
20 Trade and other receivables
2018
£m
Restated
2017
£m
Trade receivables 1,829 1,682
Loss allowance (87) (79)
1,742 1,603
Prepayments and accrued income 224 213
Net finance lease receivable 49 57
Total 2,015 1,873
Trade receivables are predominantly non-interest bearing and their carrying amounts approximate to their fair value.
Trade receivables are stated net of a loss allowance for expected credit losses. The movements in the loss allowance during the year
were as follows:
2018
£m
2017
£m
At start of year 79 56
Charge for the year 14 39
Trade receivables written off (8) (15)
Exchange translation differences 2 (1)
At end of year 87 79
21 Trade and other payables
Accounting policy
Deferred income is recognised when either a customer has paid consideration, or RELX has an unconditional right to an amount of
consideration, in advance of the goods and services being delivered.
2018
£m
Restated
2017
£m
Trade payables 187 240
Accruals 711 663
Social security and other taxes 127 114
Other payables 407 371
Deferred income 2,000 1,910
Total 3,432 3,298
Trade and other payables are predominantly non-interest bearing and their carrying amounts approximate to their fair value.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 157
Overview Business review Financial review Governance Financial statements and other information
22 Borrowings
Accounting policy
Borrowings are recorded initially at fair value and subsequently carried at amortised cost, other than fixed rate borrowings in
designated hedging relationships for which the carrying amount of the hedged portion of the borrowings is subsequently adjusted
for the gain or loss attributable to the hedged risk. When the related derivative in such a hedging relationship expires, is sold or
terminated, or no longer qualifies for hedge accounting, the cumulative change in fair value of the hedged borrowing is amortised
in the income statement over the period to maturity of the borrowing using the effective interest method.
2018
Restated
2017
Falling due
within
1 year
£m
Falling due
in more than
1 year
£m
Total
£m
Falling due
within
1 year
£m
Falling due in
more than
1 year
£m
Total
£m
Financial liabilities measured at amortised cost:
Short-term bank loans, overdrafts and commercial paper 686 – 686 464 – 464
Term debt 614 1,808 2,422 209 1,682 1,891
Lease liabilities 92 268 360 89 302 391
Term debt in fair value hedging relationships – 2,652 2,652 – 2,069 2,069
Term debt previously in fair value hedging relationships – 245 245 – 438 438
Total 1,392 4,973 6,365 762 4,491 5,253
The total fair value of financial liabilities measured at amortised cost (excluding lease liabilities) is £3,254m (2017: £2,522m). The total fair
value of term debt in fair value hedging relationships is £2,742m (2017: £2,148m). The total fair value of term debt previously in fair value
hedging relationships is £283m (2017: £501m).
RELX PLC has given guarantees in respect of certain long-term and short-term borrowings issued by subsidiaries. Included within term
debt above are debt securities issued by RELX Capital Inc., a 100% indirectly owned finance subsidiary of RELX PLC, which have been
registered with the US Securities and Exchange Commission. RELX PLC has fully and unconditionally guaranteed these securities,
which are not guaranteed by any other subsidiary of RELX PLC.
Analysis by year of repayment
2018
Restated
2017
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
Term debt
£m
Lease
liabilities
£m
Total
£m
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
Term debt
£m
Lease
liabilities
£m
Total
£m
Within 1 year 686 614 92 1,392 464 209 89 762
Within 1 to 2 years – 508 87 595 – 593 85 678
Within 2 to 3 years – 451 70 521 – 508 74 582
Within 3 to 4 years – 688 42 730 – 444 58 502
Within 4 to 5 years – 669 27 696 – 630 28 658
After 5 years – 2,389 42 2,431 – 2,014 57 2,071
After 1 year – 4,705 268 4,973 – 4,189 302 4,491
Total 686 5,319 360 6,365 464 4,398 391 5,253
Short-term bank loans, overdrafts and commercial paper were backed up at 31 December 2018 by a $3,000m (£2,354m) committed
bank facility, consisting of a $1,750m (£1,373m) tranche maturing in July 2023 and a $1,250m (£981m) tranche maturing in July 2021,
which was undrawn.
158 RELX Annual report and financial statements 2018 | Financial statements and other information
22 Borrowings (continued)
Analysis by currency
2018
Restated
2017
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
Term
debt
£m
Lease
liabilities
£m
Total
£m
Short-term
bank loans,
overdrafts
and
commercial
paper
£m
Term
debt
£m
Lease
liabilities
£m
Total
£m
US dollars 19 2,493 177 2,689 103 2,044 187 2,334
£ sterling 317 300 66 683 262 299 69 630
Euro 318 2,526 85 2,929 76 2,055 97 2,228
Other currencies 32 – 32 64 23 – 38 61
Total 686 5,319 360 6,365 464 4,398 391 5,253
Included in the US dollar amounts for term debt above is £544m of debt denominated in euros (€600m) (2017: £742m of debt
denominated in euros (€600m) and Swiss francs (CHF 275m)) that was swapped into US dollars on issuance and against which there are
related derivative financial instruments, which, as at 31 December 2018, had a fair value of £19m (2017: £38m).
23 Lease arrangements
Accounting policy
All leases where RELX is the lessee (with the exception of short-term and low-value leases) are recognised in the statement of
financial position. A lease liability is recognised based on the present value of the future lease payments, and a corresponding
right-of-use asset is recognised. The right-of-use asset is depreciated over the shorter of the lease term or the useful life of the
asset. Lease payments are apportioned between finance charges and a reduction of the lease liability.
Low-value items and short-term leases with a term of 12 months or less are not required to be recognised on the balance sheet and
payments made in relation to these leases are recognised on a straight-line basis in the income statement.
The leases held by the Group can be split into two categories: property and non-property. The Group leases various properties,
principally offices, which have varying terms and renewal rights that are typical to the territory in which they are located.
Non-property includes all other leases, such as cars and printers.
Right-of-use assets
Property
£m
Non-
property
£m
2018
£m
Property
£m
Non-
property
£m
Restated
2017
£m
At start of year 264 23 287 298 27 325
Additions 26 5 31 41 5 46
Acquisitions 7 5 12 – – –
Remeasurement 13 – 13 8 – 8
Disposals (2) (8) (10) (8) – (8)
Depreciation (68) (9) (77) (67) (8) (75)
Exchange translation differences 6 1 7 (8) (1) (9)
At end of year 246 17 263 264 23 287
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 159
Overview Business review Financial review Governance Financial statements and other information
23 Lease arrangements (continued)
Lease liability
2018
£m
Restated
2017
£m
Current
Property (83) (81)
Non-property (9) (8)
Non-current
Property (260) (295)
Non-property (8) (7)
Total (360) (391)
Interest expense on the lease liabilities recognised within finance costs was £14m (2017: £17m, 2016: £18m).
As at 31 December 2018, RELX was committed to leases with future cash outflows totalling £40m which had not yet commenced and as
such are not accounted for as a liability as at 31 December 2018. A liability and corresponding right-of-use asset will be recognised for
these leases at the lease commencement date.
RELX subleases vacant space available within its leased properties. IFRS 16 specifies conditions whereby a sublease is classed as a
finance lease for the sub-lessor. The finance lease receivable balance held is as follows:
2018
£m
Restated
2017
£m
Net finance lease receivable 49 57
Interest income recognised in relation to finance lease receivables is disclosed in note 7.
24 Provisions
Accounting policy
Provisions are recognised when a present obligation exists as a result of a past event, the obligation is reasonably estimable, and it
is probable that settlement will be required. Provisions are measured at the best estimate of the expenditure required to settle the
obligation at the statement of financial position date.
2018
£m
Restated
2017
£m
At start of year 63 86
Utilised (14) (17)
Exchange translation differences 2 (6)
Total 51 63
The Group has exposures to shortfalls in respect of certain property leases for periods up to 2024. Provisions are recognised for net
liabilities expected to arise on the exposures relating to non-rent costs on these properties.
At 31 December 2018, provisions are included within current and non-current liabilities as follows:
2018
£m
Restated
2017
£m
Current liabilities 15 12
Non-current liabilities 36 51
Total 51 63
160 RELX Annual report and financial statements 2018 | Financial statements and other information
25 Share capital, share premium and shares held in treasury
Accounting policy
Shares of RELX PLC that are repurchased and not cancelled are classified as shares held in treasury. The consideration paid,
including directly attributable costs, is recognised as a deduction from equity. Shares of RELX PLC that are purchased by the
Employee Benefit Trust are also classified as shares held in treasury, with the cost recognised as a deduction from equity.
RELX PLC
CALLED UP SHARE CAPITAL ISSUED AND FULLY PAID
No. of shares
2018
£m No. of shares
2017
£m
At start of year 1,123,682,106 162 1,144,122,623 165
Issue of ordinary shares 1,580,885 – 2,019,483 –
Issue of ordinary shares in exchange for RELX NV shares 930,780,110 134 – –
Cancellation of shares (45,000,000) (6) (22,460,000) (3)
At end of year 2,011,043,101 290 1,123,682,106 162
RELX NV
CALLED UP SHARE CAPITAL ISSUED AND FULLY PAID
No. of shares
2018
€m No. of shares
2017
€m
At start of year 999,961,098 70 1,019,893,404 71
Issue of ordinary shares 888,128 – 2,067,694 –
Cancellation of shares – – (22,000,000) (1)
Cancellation of ordinary shares on completion
of the corporate simplification (930,780,110) (65) – –
Cancellation of treasury shares on completion
of the corporate simplification (70,069,116) (5) – –
At end of year – – 999,961,098 70
NUMBER OF ORDINARY SHARES Year ended 31 December
Shares in
issue
(millions)
Treasury
shares
(millions)
2018
Shares in
issue net of
treasury
shares
(millions)
2017
Shares in
issue net of
treasury
shares
(millions)
RELX PLC
At start of year 1,123.6 (63.5) 1,060.1 1,080.5
Issue of ordinary shares 1.6 – 1.6 2.0
Issue of ordinary shares in exchange for RELX NV shares 930.8 (3.5) 927.3 –
Repurchase of ordinary shares – (26.9) (26.9) (23.1)
Net (purchase)/release of shares by the Employee Benefit Trust – (0.2) (0.2) 0.7
Cancellation of shares (45.0) 45.0 – –
At end of year 2,011.0 (49.1) 1,961.9 1,060.1
RELX NV
At start of year 1,000.0 (56.4) 943.6 962.2
Issue of ordinary shares 0.9 – 0.9 2.1
Repurchase of ordinary shares – (17.5) (17.5) (21.4)
Net release of shares by the Employee Benefit Trust – 0.3 0.3 0.7
Cancellation of ordinary shares on completion of the corporate simplification (930.8) 3.5 (927.3) –
Cancellation of treasury shares on completion of the corporate simplification (70.1) 70.1 – –
At end of year – – – 943.6
At end of year 2,011.0 (49.1) 1,961.9 2,003.7
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 161
Overview Business review Financial review Governance Financial statements and other information
25 Share capital, share premium and shares held in treasury (continued)
During the year, RELX PLC repurchased 26.9m (2017: 23.1m; 2016: 29.2m) RELX PLC ordinary shares for an average price of 1,578p;
these shares are held in treasury.
On completion of the corporate simplification RELX NV shares were cancelled and replaced with RELX PLC shares. This amounted to
930,780,110 RELX NV shares being cancelled and the same number of RELX PLC shares issued in exchange. The RELX NV treasury
shares were cancelled as part of the simplification. Prior to the corporate simplification, RELX NV repurchased 17.5m (2017: 21.4m;
2016: 26.1m) RELX NV ordinary shares for an average price of €17.73. These shares were held in treasury until their cancellation.
The total consideration for RELX PLC and RELX NV repurchases was £700m (2017: £700m; 2016: £700m).
The Employee Benefit Trust purchases RELX PLC shares which, at the trustees’ discretion, can be used in respect of the exercise of
share options and to meet commitments under conditional share awards. During the year, the Employee Benefit Trust purchased 2.9m
shares for a total cost of £43m (2017: £39m; 2016: £29m). At 31 December 2018, shares held by the Employee Benefit Trust were £90m
(2017: £82m; 2016: £81m) at cost.
The issue of ordinary shares in the year relates to the exercise of share options. Details of share option and conditional share schemes
are set out in note 7 on page 137.
All of the RELX PLC ordinary shares rank equally with respect to voting rights and rights to receive dividends, except for shares held in
treasury, which do not attract voting or dividend rights. There are no restrictions on the rights to transfer shares.
At 31 December 2018, RELX PLC shares held in treasury related to 7,130,366 (2017: 3,493,817; 2016: 4,229,442) RELX PLC ordinary
shares held by the Employee Benefit Trust; and 42,023,020 (2017: 60,077,786; 2016: 59,415,287) RELX PLC ordinary shares held by the
parent company. During December 2018, 45m (2017: 22.5m) RELX PLC ordinary shares held in treasury were cancelled.
On 7 December 2018, RELX PLC announced a non-discretionary programme to repurchase further ordinary shares up to the value of
£100m. At 31 December 2018, an accrual of £100m was recognised in respect of this non-discretionary commitment. A further 6.0m
RELX PLC ordinary shares have been repurchased in January and February 2019 under this programme.
26 Other reserves
Hedge
reserve
2018
£m
Other
reserves
2018
£m
Total
2018
£m
Restated
Total
2017
£m
At start of year (3) 428 425 (215)
Profit attributable to RELX PLC shareholders – 1,422 1,422 1,648
Dividends paid – (796) (796) (762)
Actuarial (losses)/gains on defined benefit pension schemes – (91) (91) 233
Fair value movements on cash flow hedges (59) – (59) 137
Transfer to net profit from cash flow hedge reserve 17 – 17 25
Tax recognised in other comprehensive income 9 15 24 (89)
Increase in share based remuneration reserve (net of tax) – 35 35 42
Issue of ordinary shares, net of expenses – (227) (227) –
Cancellation of shares – 262 262 (566)
Settlement of share awards – (35) (35) (37)
Exchange translation differences – 7 7 9
At end of year (36) 1,020 984 425
Other reserves principally comprise retained earnings and the share based remuneration reserve.
162 RELX Annual report and financial statements 2018 | Financial statements and other information
27 Related party transactions
Transactions between RELX PLC and subsidiaries of the Group have been eliminated within the consolidated financial statements.
Transactions with joint ventures were made on normal market terms of trading and comprise sales of goods and services of £3m (2017:
£16m; 2016: £2m) and the rendering and receiving of goods and services of £0.1m (2017: £0.1m; 2016: nil). As at 31 December 2018, amounts
owed by joint ventures were £2m (2017: £2m; 2016: nil) and amounts due to joint ventures were £0.9m (2017: £1m; 2016: nil). See note 6 for
details of the Group’s participation in defined benefit pension schemes.
Key management personnel are also related parties as defined by IAS 24 – Related Party Disclosures and comprise the Executive
and Non-Executive Directors of RELX PLC. Key management personnel remuneration is set out below. For reporting purposes, salary,
benefits and annual incentive payments are considered short-term employee benefits.
KEY MANAGEMENT PERSONNEL REMUNERATION
2018
£m
2017
£m
2016
£m
Salaries, other short-term employee benefits and non-executive fees 7 5 5
Post-employment benefits 1 1 1
Share based remuneration* 7 8 12
Total 15 14 18
EXECUTIVE DIRECTORS
Salary
£’000
Benefits
£’000
Annual
incentive
£’000
Cost of share
based
remuneration*
£’000
Cost of
pension
provision*
£’000
Total
£’000
Total Executive Directors 2018 1,935 99 3,033 7,003 741 12,811
2017 1,889 101 1,964 8,205 983 13,142
2016 1,843 88 1,881 12,038 1,052 16,902
* The figures for share based awards are calculated in accordance with the methodology set out in the UK Regulations. The figure for performance-related share
based awards includes share price appreciation since the date the award was granted. Please see page 87 for further details. The cost of pension provision is
calculated in accordance with the methodology set out in the UK Regulations. The amount is reduced by the Directors’ contributions and participation fee for
defined benefit schemes and reduced by the payments made to defined contribution schemes or in lieu of pension.
NONEXECUTIVE DIRECTORS 2018
£’000
2017
£’000
2016
£’000
Fees and benefits 1,634 1,396 1,364
The remuneration of non-executive directors comprises fees for services, and benefits primarily relating to tax filing support in respect
of filings resulting from their directorships. No deemed benefits were provided during 2018 to former Directors (2017: £2,460; 2016: nil).
No loans, advances or guarantees have been provided on behalf of any Director. The aggregate gains made by Executive Directors on the
exercise of options during 2018 were nil (2017: £2,804,358; 2016: £3,082,715).
28 Exchange rates
The following exchange rates have been applied in preparing the consolidated financial statements:
Income statement
Statement of
financial position
2018 2017 2016 2018 2017
Euro to sterling 1.13 1.14 1.22 1.11 1.12
US dollar to sterling 1.34 1.29 1.36 1.27 1.35
29 Approval of financial statements
The consolidated financial statements were approved and authorised for issue by the Board of Directors on 20 February 2019.
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 163
Overview Business review Financial review Governance Financial statements and other information
Company name
Share
class
Reg
office
Australia
Adaptris Pty Ltd Ordinary AUS1
Elsevier (Australia) Pty Ltd Ordinary AUS3
Fair Events Pty Ltd (49%) Ordinary AUS4
Fitness Show Pty Ltd (80%) Ordinary AUS6
Reed Business Information (Australia) Pty Ltd Ordinary AUS1
Reed Exhibitions Australia Pty Ltd Ordinary AUS2
Reed International Books Australia Pty Ltd Ordinary AUS3
Reed Oz Comic-Con Pty Ltd (80%) Ordinary AUS2
RELX Australia Pty Ltd Ordinary AUS2
SST Software Australia Pty Ltd Ordinary AUS7
Symbiotic Technologies Pty Ltd Ordinary AUS8
Symbiotic Technologies Operation Pty Ltd Ordinary AUS8
ThreatMetrix Pty Ltd Ordinary AUS8
Austria
Expoxx Messebau GmbH Registered Capital AUT1
LexisNexis Verlag ARD ORAC GmbH & Co KG Registered Capital AUT2
ORAC Gesellschaft m.b.H. Registered Capital AUT2
Reed CEE GmbH Registered Capital AUT1
Reed Messe Salzburg GmbH Registered Capital AUT3
Reed Messe Wien GmbH Registered Capital AUT1
RELX Austria GmbH Registered Capital AUT3
System StandBau GmbH Registered Capital AUT4
Belgium
LexisNexis BVBA Ordinary BEL1
First 4 Farming Europe NV Ordinary BEL2
Brazil
Elsevier Editora Ltda Quotas BRA1
Fircosoft Brazil Consultoria e Servicos de Informatica Ltda Ordinary BRA2
LexisNexis Informações e Sistemas Empresariais Ltda Quotas shares BRA3
LexisNexis Serviços de Análise de Risco Ltda Quotas shares BRA3
MLex Brasil Midia Mercadologica Ltda (91%) Quotas BRA4
Reed Exhibitions Alcântara Machado Ltda Quotas shares BRA3
SST Software do Brasil Ltda Ordinary BRA5
Canada
LexisNexis Canada Inc Class A ordinary CAN1
RELX Canada Ltd Unlimited Class A,
Unlimited Class B,
Unlimited Class C,
Unlimited Class D,
Unlimited Class E,
Unlimited Class F,
Unlimited Class G,
Unlimited Class H
CAN3
Science-Metrix Inc Class A common
shares
Class B common
shares
Class A preferred
shares
Class B preferred
shares
Class C preferred
shares
Class D preferred
shares
CAN4
ThreatMetrix (Canada) Inc Common shares CAN2
China
Beijing Bakery China E xhibitions Co., Ltd (25%) Registered Capital CHN1
Beijing Medtime Elsevier Educ ation Technology Co., Ltd (49%) Registered Capital CHN2
Beijing Reed Elsevier Science and Technology Co., Ltd Registered Capital CHN3
Beijing Reed Guanghe Exhibition Co., Ltd (80%) Registered Capital CHN4
C-One Energy Co., Ltd Registered Capital CHN6
Genilex Information Technology Co., Ltd (40%) Registered Capital CHN7
ICIS Consulting (Beijing) Co., Ltd Registered Capital CHN8
KeAi Communications Co., Ltd (49%) Registered Capital CHN9
LexisNexis Risk Solutions (Shanghai) Information
Technologies Co., Ltd
Registered Capital CHN10
MLex Consulting (Beijing) Co., Ltd (91%) Registered Capital CHN11
Reed Business Information (Shanghai) Co Ltd Registered Captial CHN20
Reed El sevier Information Technology (Beijing) Co., Ltd Registered Capital CHN3
Reed Exhibitions (China) Co., Ltd Registered Capital CHN4
Reed Exhibitions Henjin Co., Ltd Registered Capital CHN19
Reed Exhibitions (Shanghai) Co., Ltd Registered Capital CHN12
Reed Hongda Exhibitions (Henan) Co., Ltd (51%) Registered Capital CHN13
Reed Huabai Exhibitions (Beijing) Co., Ltd (51%) Registered Capital CHN4
Reed Huabo Exhibitions (Shenzhen) Co., Ltd (65%) Registered Capital CHN14
Company name
Share
class
Reg
office
Reed Huaqun Exhibitions Co., Ltd (52%) Registered Capital CHN4
Reed Kuozhan Exhibitions (Shanghai) Co., Ltd (60%) Registered Capital CHN12
Reed Sinopharm Exhibitions Co., Ltd (50%) Registered Capital CHN4
RELX (China) Investment Co., Ltd Registered Capital CHN15
Shanghai Datong Medical Information Technology Co., Ltd Registered Capital CHN17
Shanghai SinoReal Exhibitions Co., Ltd (27.5%) Registered Capital CHN18
Colombia
LexisNexis Risk Solutions S.A.S. Ordinary COL1
Denmark
Elsevier A/S Ordinary DNK1
Reed Elsevier Denmark ApS Ordinary DNK1
Dubai, UAE
Reed Exhibitions Free Zone-LLC Ordinary UAE1
RELX Middle East FZ-LLC Ordinary UAE2
Egypt
Elsevier Egypt LLC Ordinary EGY1
France
Elsevier Holding France SAS Registered Capital FRA1
Elsevier Masson SAS Registered Capital FRA1
Evoluprint SAS Ordinary FRA2
Fircosoft SAS Ordinary FRA3
Gie Edi-Data (83%) Ordinary FRA4
Gie Juris-Data Ordinary FRA4
GIE PRK – Publicite Rober t Krier Registered capital FRA5
LexisNexis Business Information Solutions S.A. Ordinary FRA4
LexisNexis Business Information Solutions Holding S.A. Ordinary FRA6
LexisNexis International Development Services S.A. Ordinary FRA4
LexisNexis SA Ordinary FRA4
Reed Exhibitions ISG SARL Registered capital FRA7
Reed Expositions France SA S Ordinary FRA5
Reed Midem SA S Registered capital FRA7
Reed Organisation SAS Ordinary FRA5
RELX France S.A. Registered capital FRA7
SAFI SA (50%) Ordinary FRA8
Germany
Aries Medical Knowledge GmbH & Co KG Registered Capital DEU9
Aries Medical Knowledge Verwaltungsgesellschaft GmbH Registered Capital DEU9
Elsevier GmbH Registered Capital DEU3
Elsevier Information Systems GmbH Registered Capital DEU3
LexisNexis GmbH Registered Capital DEU5
PatentSight GmbH Registered Capital DEU8
REC Publications GmbH Registered Capital DEU1
Reed Exhibitions (Germany) GmbH Registered Capital DEU1
Reed Exhibitions Deutschland GmbH Registered Capital DEU1
Reed Travel Group (Germany) GmbH Ordinary DEU6
RELX Deutschland GmbH Registered Capital DEU1
Tschach Solutions GmbH Ordinary DEU7
Hong Kong
Ascend China Holding Ltd Ordinary HNK1
Reed Business Information (China) Ltd Ordinary HNK2
JC Exhibition and Promotion Ltd (65%) Ordinary HNK1
JYLN Sager Ltd (40%) Ordinary HNK5
MLex Asia Ltd (91%) Ordinary HNK6
Reed Exhibitions Ltd Ordinary HNK5
RELX (Greater China) Ltd Ordinary HNK7
India
Comic Con India Private Ltd (36%) Ordinary IND2
FircoSoft India Private Ltd Ordinary IND3
Reed El sevier Publishing (India) Pvt Ltd Ordinary IND4
Reed Manch Exhibitions Private Ltd (70%) Ordinary IND5
Reed SI E xhibitions Private Ltd (51%) Ordinary IND6
Reed Triune Exhibitions Private Ltd (72%) Ordinary IND7
RELX India Private Ltd Ordinary IND1
Indonesia
PT Reed Exhibitions Indonesia (70%) Class A
Class B
IDN2
PT Reed Panorama Exhibitions (50%) Ordinary IDN1
30 Related undertakings
A full list of related undertakings (comprising subsidiaries, joint ventures, associates and other significant holdings) is set out below.
All are 100% owned directly or indirectly by the Group except where percentage ownership denoted in (x%).
164 RELX Annual report and financial statements 2018 | Financial statements and other information
30 Related undertakings (continued)
Company name
Share
class
Reg
office
Ireland
Butterworth (Ireland) Ltd Ordinary, A Ordinary IRL2
Elsevier Services Ireland Ltd Ordinary IRL4
LexisNexis Risk Solutions (Ireland) Ltd Ordinary IRL1
LexisNexis Risk Solutions (Europe) Ltd Ordinary IRL1
Israel
LexisNexis Israel Ltd Ordinary ISR1
Italy
Elsevier SRL Registered Capital ITA1
ICIS Italia SRL Ordinary ITA2
Reed Exhibitions ISG Italy SRL Ordinary ITA1
Reed Exhibitions Italia SRL Ordinary ITA1
Japan
Ascend Japan KK Ordinary JPN1
Elsevier Japan KK Ordinary JPN2
LexisNexis Japan KK Common Stock JPN3
PatentSight Japan Inc Common Shares JPN6
Reed Exhibitions Japan KK Ordinary JPN4
Reed ISG Japan KK Ordinary JPN5
ThreatMetrix GK Membership Interest JPN7
Korea (South)
Elsevier Korea LLC Ordinary KOR1
LexisNexis Legal and Professional Service Korea Ltd Ordinary KOR2
Reed Exhibitions Korea Ltd Ordinary KOR3
Reed Exporum Ltd (60%) Ordinary KOR4
Reed K. Fairs Ltd (70%) Ordinary KOR3
Luxembourg
FIRCOSOFT Luxembourg Sàrl Ordinary LUX1
Malaysia
LexisNexis Malaysia Sdn Bhd Ordinary MYS1
Reed Exhibitions Sdn Bhd Ordinary MYS1
Mexico
Masson-Doyma Mexico, S.A. Ordinary MEX1
Reed Exhibitions Mexico S.A. de C.V. Ordinary MEX1
Morocco
Reed Exhibitions Morocco SARL Ordinary MAR1
New Zealand
LexisNexis NZ Ltd Ordinary NZL1
Philippines
Reed El sevier Shared Services (Philippines) Inc. Ordinary PHL1
Poland
Elsevier sp. z.o.o. Ordinary POL1
Russia
Ecwatech Company ZAO Ordinary RUS1
LexisNexis OOO Registered Capital RUS2
Real Estate Events Direct OOO (80%) Registered Capital RUS3
RELX OOO Registered Capital RUS2
Saudi Arabia
Reed Sunaidi E xhibitions (50%) Ordinary SAU1
Singapore
Elsevier (Singapore) Pte Ltd Ordinary SGP1
F4F Agriculture (Asia Pacific) Pte Ltd Ordinary SGP2
Lexis-Nexis Philippines Pte Ltd (75%) Preference shares SGP3
Reed Business Information Pte Ltd Ordinary SGP4
RE (HAPL) Pte Ltd Ordinary SGP1
RELX (Singapore) Pte. Ltd Ordinary SGP3
SAFI Asia P te Ltd (50%) Ordinary SGP4
ThreatMetrix PTE Ltd Ordinary SGP5
South Africa
Fircosoft South Africa (P ty) Ltd Ordinary ZAF1
Globalrange SA (P ty) Ltd Ordinary ZAF2
Korbitec (Pty) Ltd (90%) Ordinary ZAF3
LegalPerfectTSoftware Solutions (Pty) Ltd (90%) Ordinary ZAF3
LexisNexis Academic (Pty) Ltd (90%) Ordinary ZAF3
LexisNexis (Pty) Ltd (90%) Ordinary ZAF3
LexisNexis Risk Management (Pty) Ltd (90%) Ordinary ZAF3
Property Payment Exchange (SA) (Pty) Ltd (90%) Ordinary ZAF3
Company name
Share
class
Reg
office
RELX (Pty) Ltd Ordinary ZAF3
Reed Exhibitions (Pty) Ltd (90%) A-shares ZAF4
Reed Events Management (Pty) Ltd (90%) A-shares ZAF4
Reed Exhibitions Group(Pty) Ltd (90%) Ordinary ZAF4
Reed Venue Management (Pty) Ltd (90%) A-shares ZAF4
Winsearch Services (Pty) Ltd (90%) Ordinary ZAF3
Spain
Elsevier Espana, S.L. Participations ESP1
Switzerland
Elsevier Finance SA Ordinary CHE1
Fircosoft Schweiz GmbH Ordinary CHE2
RELX Risks SA Ordinary CHE1
RELX Swiss Holdings SA Ordinary CHE1
Taiwan
Elsevier Taiwan LLC Registered Capital TWN1
Thailand
Reed Holding (Thailand) Co., Ltd Ordinary THA2
Reed Tradex Company Ltd (49%) Preference shares THA1
The Netherlands
AGRM Solutions C.V. Partnership Interest NLD1
Elsevier B.V. Ordinary NLD1
Elsevier Employment Services B.V. Ordinary NLD1
LexisNexis Business Information Solutions B.V. Ordinary NLD1
LexisNexis Univentio B.V. Ordinary NLD2
Misset Uitgeverij B.V.(49%) Ordinary NLD4
One Business B.V. Registered Capital NLD5
Reed Business B.V. Ordinary NLD1
RELX Finance B.V. Ordinary NLD1
RELX Holdings B.V. Ordinary NLD1
RELX Nederland B.V. E Shares / RE Shares NLD1
RELX Overseas B.V. E Shares / RE Shares NLD1
RELX US Holdings (Amsterdam) B.V. Ordinary NLD1
ThreatMetrix BV Ordinary NLD3
Turkey
Elsevier STM Bilgi Hizmetleri Limited Şirketi Ordinary TUR1
Reed Tüyap Fuarcilik A.Ș.(50%) A-shares / B-shares TUR2
United Kingdom
Adaptris Group Ltd Ordinary GBR2
Adaptris Ltd Ordinary GBR2
Bradfield Brett Holdings Ltd 7 1/2% Preferred
Income, Ordinary
GBR1
Butterworth & Co. (Overseas) Ltd Ordinary GBR1
Butterworth & Co. (Publishers) Ltd 4.5% Cum.
Preference,
‘A’ Ordinary,
‘B’ Ordinary
GBR1
Butterworths Ltd Ordinary GBR5
Cordery Compliance Ltd (72%) Ordinary GBR5
Cordery Ltd (72%) Ordinary GBR5
Crediva Ltd Ordinary GBR6
Dew Events Ltd Ordinary GBR4
Digital Foundry Network (50%) Ordinary GBR4
Drayton Legal Recoveries Ltd Ordinary GBR7
E & P Events LLP (50%) No Shares GBR4
Elsevier Ltd Ordinary GBR8
Elsevier Life Sciences IP Ltd Ordinary GBR8
Formpart (EPS) Ltd Ordinary GBR1
Formpart (HPL) Ltd Ordinary GBR1
Gamer Edition Ltd Ordinary GBR4
Gamer Events Ltd Ordinary GBR4
Gamer Net work Ltd Ordinary GBR4
Gamermania Ltd Ordinary GBR2
Hallplaza Ltd Ordinary GBR4
Imbibe Media Ltd Ordinary GBR4
Indicium Financial Ltd Ordinary GBR10
Information Handling Ltd (85%) Ordinary GBR1
Insurance Initiatives Ltd Ordinary GBR10
Legend Exhibitions Ltd Ordinary GBR4
LexisNexis Risk Solutions UK Ltd Ordinary GBR11
MCM Central Ltd Ordinary GBR2
MCM Expo Ltd Ordinary GBR2
MCM Stategy Ltd Ordinary GBR2
Mendeley Ltd Ordinary GBR8
MLex Ltd (91%) A Ordinary Shares,
Ordinary
GBR5
Moreover Technologies Ltd Ordinary GBR1
Mosby International Ltd Ordinary GBR1
Newsflo Ltd Ordinary GBR1
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 165
Overview Business review Financial review Governance Financial statements and other information
30 Related undertakings (continued)
Company name
Share
class
Reg
office
NLife Ltd (23.5%) Ordinary GBR14
Offshore Europe (Management) Ltd Ordinary GBR4
Offshore Europe Partnership (50%) Partnership Interest GBR4
Out There Gaming Ltd (70%) Ordinary GBR4
Ox ford Spires Management Co; Ltd (55%) Ordinary GBR12
Peopletracer Ltd Ordinary GBR6
Prean Holdings Ltd Deferred, Ordinary GBR1
RE Directors (No.1) Limited Ordinary GBR1
RE Directors (No.2) Limited Ordinary GBR1
RE (SOE) Ltd Ordinary GBR4
RE Secretaries Ltd Ordinary GBR1
Reed All-Energy Ltd Ordinary GBR4
Reed Business Information (Holdings) Ltd Ordinary GBR2
Reed Business Information Ltd Ordinary GBR2
Reed Consumer Books Ltd Ordinary GBR1
Reed El sevier (UIG) Ltd Ordinary GBR1
Reed Elsevier Pension Trustee Ltd Ordinary GBR1
Reed Events Ltd Ordinary GBR4
Reed Exhibitions Ltd Deferred, Ordinary GBR4
Reed Midem Ltd Ordinary GBR4
Reed Nominees Ltd Ordinary GBR1
Reed Overseas Corporation Ltd Ordinary GBR1
Reed Publishing Corporation Ltd Ordinary GBR1
RELX (Holdings) Ltd Ordinary GBR1
RELX (Investments) plc Ordinary GBR1
RELX (UK) Ltd Ordinary GBR1
RELX Finance Ltd Ordinary GBR1
RELX Group plc Ordinary
‘R’ Ordinary
GBR1
RELX Overseas Holdings Ltd Ordinary, GBR1
RE V Venture Par tners Ltd Ordinary GBR1
RPS Gaming Ltd Ordinary GBR4
Symbiotic Technologies Operations Ltd Ordinary GBR11
Tracesmart Group Ltd Ordinary GBR6
Tracesmart Ltd Ordinary GBR6
VG247 Ltd Ordinary GBR4
Wunelli Ltd Ordinary GBR13
United States
Accuity Asset Verification Services Inc Common Stock USA1
Accuity Inc Common Stock USA1
Aries Systems Corporation Common
Ordinary
USA3
Derman, Inc Common Stock USA4
Dunlap-Hanna Publishers (50%) Partnership Interest USA8
Elsevier Inc Common Stock USA3
Elsevier Holdings Inc Common Stock USA3
Elsevier Medical Information LLC Membership Interest USA3
Elsevier STM Inc Common Stock USA3
Enclarity, Inc Common Stock USA2
ExitCare LLC Membership Interest USA3
Flightstats, Inc Common Stock USA5
Gamer Network Inc. Common Stock USA3
Gaming Business Asia LLC (50%) Membership Interest USA3
Health Market Science, Inc Common Stock USA2
IDG-RBI China Publishers LLC (50%) Membership Interest USA3
Intelligize, Inc Common Stock USA3
Knovel Corporation Common Stock USA3
Lex Machina Inc Common Stock USA3
LexisNexis Claims Solutions Inc Common Stock USA2
LexisNexis Coplogic Solutions Inc Common Stock USA2
LexisNexis of Puerto Rico Inc Common Stock USA10
LexisNexis Risk Assets Inc Common Stock USA2
LexisNexis Risk Data Management Inc Common Stock USA2
LexisNexis Risk Holdings Inc Common Stock USA2
LexisNexis Risk Solutions Inc Common Stock USA2
LexisNexis Special Services Inc Common Stock USA6
LexisNexis Rule of Law Foundation Non stock
corporation
USA10
LexisNexis VitalChek Network Inc Common Stock USA2
Managed Technology Services LLC (51%) Membership Interest USA9
Matthew Bender & Company, Inc. Common Stock USA3
MLex US, Inc (91%) Common Stock USA3
PoliceReports.US, LLC Membership Interest USA2
Portfolio Media, Inc Common Stock USA3
Reed Business Information Inc Common Stock USA5
Reed Technology and Information Ser vices Inc. Common Stock USA3
RELX Capital Inc Common Stock USA4
RELX Inc Common Stock USA3
RELX US Holdings Inc Common Stock USA3
Reman, Inc Common Stock USA3
RE V IV Partnership LP No shares USA4
SAFI Americas LLC (50%) Membership Interest USA3
Science-Metrix Corporation Common Stock USA3
Symbiotic Technologies Operations Inc. Common USA2
The Elsevier Foundation No Shares USA3
Company name
Share
class
Reg
office
The Reed Elsevier Ventures 2005 Partnership LP Partnership Interest USA4
The Reed Elsevier Ventures 2006 Partnership LP Partnership Interest USA4
The Reed Elsevier Ventures 2008 Partnership LP Partnership Interest USA4
The Reed Elsevier Ventures 2009 Partnership LP Partnership Interest USA4
The Reed Elsevier Ventures 2010 Partnership LP Partnership Interest USA4
The Reed Elsevier Ventures 2011 Par tnership LP Partnership Interest USA4
The Reed Elsevier Ventures 2012 Partnership LP Partnership Interest USA4
The Reed Elsevier Ventures 2013 Partnership LP Partnership Interest USA4
The Remick Publishers (50%) Partnership Interest USA8
ThreatMetrix, Inc. Common
Ordinary
USA2
World Compliance, Inc Common Stock USA4
Vietnam
Reed Tradex V ietnam LLC (49%) Ordinary VIE1
166 RELX Annual report and financial statements 2018 | Financial statements and other information
30 Related undertakings (continued)
Registered offices
Australia
AUS1: Building B, Level 2, Unit 11, 1 Maitland Place, Baulkham Hills NSW 2153,Australia
AUS2: Level 10, 10 Help Street, Chatswood NSW 2067, Australia
AUS3: ‘Tower 2’ Level 10, 475 Victoria Avenue, Chatswood NSW 2067
AUS4: Grant Thornton, Level 17, 393 Kent St, Sydney, NSW 2000, Australia
AUS5: KPMG, 147 Collins Street, Melbourne, Vic, 3000
AUS6: Fordham Business Advisors Pty Ltd, Rialto South Tower Level 35, 525 Collins
Street, Melbourne, Vic, 3000
AUS7: Level 1, 439 Gympie Road, Strathpine, QLD 4500
AUS8: 1303, 799 Pacific Highway, Chatswood, NSW 2067
Austria
AUT1: Messeplatz 1, 1020, Wien, Austria
AUT2: Marxergasse 25, 1030, Wien, Austria
AUT3: Am Messezentrum 6, 5020, Salzburg, Austria
Belgium
BEL1: Grotesteenweg-Zuid 39, 9052 Gent, Belgium
BEL2: Leernseteenweg 128 Box E, 9800 Deinze, Belgium
BEL3: 67 rue de la Loi, 1040 Etterbeek, Belgium
Brazil
BRA1: Rua Sete de Setembro, nº 111, salas 601,1501/1502, 1601/1602, 1701/1702 e 802 – 8º
Andar, Centro, cidade do Rio de Janeiro, estado do Rio de Janeiro, CEP 20.050-006
BRA2: São Paulo, State of São Paulo, at Rua Bela Cintra, nº 1.200, 8th floor, CEP 01415-002
BRA3: Rua Bela Cintra no. 1200, 10th floor, Sâo Paulo, 01415-001, Brazil
BRA4: Avenida paulista, 2300-Piso Pilotis room 28, Sao Paulo, Sao Paulo 01310-300
BRA5: Rua Cel Fonseca, 203 A-Centro, Botucatu, SP, 18600-200
Canada
CAN1: 123 Commerce Valley Drive East, Suite 700, Markham, Ontario, L3T 7W8, Canada
CAN2: 160 Elgin Street, Suite 2600,Ottawa, Ontario, K1P 1C3, Canada
CAN3: 555 RIichmond Street West, Toronto, Ontario, Canada, M5V 3B1
CAN4: 26E-1501 av. McGill College, Montreal, Quebec, H3A 3N9, Canada
China
CHN1: Zhongkun Building, Room 612, Gaoliangqiaoxie Street, No. 59, Haidan District,
Beijing, 100044, China
CHN2: West Building of Administration Building, Xueyuan Road No. 38 Peking University
Health Science Center, Haidan District, Beijing, 100191, China
CHN3: Oriental Plaza, No. 1 East Chang An Ave, Tower W1, 7th Floor, Unit 1-7, Dong Cheng
District, Beijing, 100738, China
CHN4: Ping An International Finance Center, Room 1504, 15th Floor, Tower A-101, 3-24
floor, Xinyuan South Road, Chaoyang District, Beijing, 100027, China
CHN5: 4/F Block C, No 999 Jingzhong Road, Changning District, Shanghai, China
CHN6: 9/F, No 3 Zhongshan Er Road, Guangzhou, China
CHN7: Unit 2480, Building 2, No. 7, Chuangxin Road, Science Park of Changping District,
Beijing, China
CHN8: Room 12B, 7th Floor, Oriental Plaza, 1 East Chang An Avenue, Beijing, China
CHN9: 16 Donghuangchenggen North Street, Beijing, 100717, China
CHN10: Room 5106, Raffle City, 268 Middle Xizang Road, Huangpu District, Shanghai,
200001, China
CHN11: Room A 100 of Room 0307, Floor 3, Building 3, 7 Middle Dongsanhuan road,
Chaoyang District, Beijing
CHN12: Intercontinental Center, 42F, 100 Yutong Road, Zhabei District, Shanghai, 200070,
China
CHN13: World Expo Mansion, 14F, No. 04-05, No. 8 Business Out Ring Road, Zhengzou New
District, Zhengzou, 450000, China
CHN14: Shenzhen International Chamber of Commerce Tower, Room 1801-1802, 1805,
Fuhua 3rd Road, Futian District, Shenzhen, 518048, China
CHN15: Room 319, 238 Jiangchangsan Road, Jing’an District, Shanghai, China
CHN16: Room 702-2, 200 Huiyuan Road, Jiading Industrial Area, Shanghai
CHN17: No 498, GouShouJing Road, Building 6 Unit 12502-505, Shanghai, Pudong New
District, 201203, China
CHN18: Building 2, Room No. 3895, Changjiang Avenue, No. 161, Changliang Farm,
Chongming County, Shanghai Municipality
CHN19: FL2, No.979, Yunhan Road, Nicheng Town, Pudong New Area
CHN20: 4/F Block C, No 999 Jingzhong Road, Changning District, Shanghai, China
Colombia
COL1: Philippe Prietocarrizosa & Uria Abogados, Carrera 9 No. 74-08 Oficina 105, Bogotá,
d.c., 76600, Colombia
Denmark
DNK1: Niels Jernes Vej 10, 9220, Aalborg Øst, Denmark
Dubai, UAE
UAE1: Office No. 328, Building 02, third floor, P.O. Box 502425, Dubai, United Arab Emirates
UAE2: Al Sufouh Complex, Floor 3, No. 304, Dubai, United Arab Emirates
Egypt
EGY1: Land Mark Office Building, 2nd Floor, 90th Street, City Center, 5th Settlement,
New Cairo, Cairo, Egypt
Registered offices
France
FRA1: 65, rue Camille Desmoulins, 92130, Issy les Moulineaux, France
FRA2: Parc Euronord – 10, rue du Parc – 31150 Bruguieres
FRA3: 247 rue de Bercy 75012 Paris
FRA4: 141 rue de Javel, 75015 Paris
FRA5: 52 Quai de Dion Bouton 92800 Puteaux
FRA6: Immeuble « Technopolis », 350 rue Georges Besse –Nîmes (30000)
FRA7: 27 quai Alphonse Le Gallo, 92100, Boulogne-Billancourt, France
FRA8: 6-8 Rue Chaptal, 75009 Paris
Germany
DEU1: Völklinger Strasse 4, 40219, Düsseldorf, Germany
DEU3: Theodor-Heuss-Allee 108, D-60488, Frankfurt am Main, Hesse, Germany
DEU4: Hackerbrücke 6, 80335, Munich, Germany
DEU5: Heerdter Sandberg 30, 40549, Düsseldorf, Germany
DEU6: Schwannstr. 6, 40476 Düsseldorf
DEU7: Steinhäuserstrasse 9, 76135, Karlsruhe, Germany
DEU8: Joseph-Schumpeter-Allee 33, 53227, Bonn
DEU9: Hauptstrasse 47, 40764, Lagenfeld
Hong Kong
HNK1: 20/F Alexandra House, 18 Chater Road, Central, Hong Kong
HNK2: Level 28, Building 8, 3 Pacific Place, 1 Queens Road East, HONG KONG, Hong Kong
HNK3: Unit 204 2/F, Malaysia Bldg., 50 Gloucester Rd, Wanchai, Hong Kong
HNK4: Level 54 Hopewell Center, 183 Queens Road East (Tricor Office), Hong Kong
HNK5: Flat 2, 19/F Henan Building 90-92, Jaffe Road Wanchai, Hong Kong, Hong Kong
HNK6: 703 Silvercord, Tower 2, 30 Canton Road, Tsimshatsui, Kowloon, Hong Kong
HNK7: 3901, 39th Floor Hopewell Center, 183 Queens Road East, Wanchai, Hong Kong,
Hong Kong
India
IND1: 818, 8th Floor, Indraprakash Builing, 21 Barakhamba Road, New Delhi, 110001,
India
IND2: B9/5 Vasant Vihar, New Delhi, 110057, India
IND3: n°664 Level 6 – Chennai Regus – Citi Centre – 10/11 Dr Radhakrishnan Salai,
Mylapore – Chennai 600004
IND4: 18, Kotla Lane, Rouse Avenue, New Delhi, 110002, India
IND5: B-15/192, Pharma Apartments, Patparganj, I.P. Extension, New Delhi, 110092, India
IND6: B-9, "A" Block, LSC, Naraina Vihar, Ring Road, New Delhi, 110028, India
IND7: #25, 3rd floor, 8th Main Road, Vasanthnager, Bangalore, 560052, India
Indonesia
IDN1: Panorama Building, 5th Floor, Jalan Tomang Raya No. 63, Jakarta, 11440, Indonesia
IDN2: Menara Citicon Level 8. Unit 8011 & 8012 Jl. Letjen S. Parman No. 8 Kav 72 Slipi
Palmerah Jakarta Barat 11410 Indonesia
Ireland
IRL1: 80 Harcourt Street, Dublin 2, Ireland
IRL2: Arthur Cox Building, Earlsfort Terrace, Dublin 2, Ireland
IRL3: (A&L Goodbody Secretarial Services), 25/28 North Wall Quay, Dublin 1, D01 H104,
Ireland
IRL4: Suite 4320, Atlantic Avenue, Westpark Business Campus, Shannon, Clare, Ireland
Israel
ISR1: Meitar, attorneys at Law, 16 Abba Hillel Road, Ramat Gan, 5250608, Israel
Italy
ITA1: Via Marostica 1, 20146, Milan, Italy
ITA2: Studio Colombo e Associati, Via Cino del Duca 5, 20122, Milano, Italy
Japan
JPN1: Kyodo Tsushin Kaikam 2F, 2-2-5 Toronomon, Minato-ku, Tokyo, 105-0001
JPN2: Ark Mori Building, 1-12-32 Akasaka, Minato-ku, Tokyo, 107-6029, Japan
JPN3: 1-9-15, Higashi Azabu, Minato-ku Tokyo Japan
JPN4: Shinjuku-Nomura Bldg., 1-26-2 Nishi-shinjuku, Shinjuku-ku, Tokyo, Japan
JPN5: 13-12 Rokubancho, Chiyoda-ku, Tokyo, Japan
JPN6: 7F Cross Office Uchisaiwaicho, 1-18-6 Nishi-Shinbashi, Minato-ku, Tokyo
JPN7: 2-6, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo
Korea (South)
KOR1: Chunwoo Building, 4th floor, 534 Itaewon-dong, Yongsan-gu, Seoel, 140-861,
Korea, Republic of
KOR2: 206 Noksapyeong-daero, Yongsan-gu, Seoel, Korea, Republic of
KOR3: Room 4401, Trade Tower, 159-1, Samseong-dong, Gangnam-gu Seoul, 135-729,
Republic of Korea
KOR4: 1324 Block A Tera Tower II, 201, Songpa-daero, Songpa-gu, Seoul, 05854
Luxembourg
LUX1: Bloc B 19-21, Route d’Arlon, L-8009 Strassen, Luxembourg
Notes to the consolidated financial statements
for the year ended 31 December 2018
RELX Annual report and financial statements 2018 | Notes to the consolidated financial statements 167
Overview Business review Financial review Governance Financial statements and other information
Registered offices
Malaysia
MYS1: 6th Floor, Akademi Etiqa, No. 23 Jalan Melaka, 50100 Kuala Lumpur, Malaysia
Mexico
MEX1: Insurgentes Sur # 1388 Piso 8, Col. Actipan, Deleg. Benito Juarez, C.P. 03230 Ciudad
de México, México
Morocco
MAR1: Forum Bab Abdelaziz au 62, Angle Blvd. d’Anfa, 6ème étage, Apt 61, Casablanca,
Morocco
New Zealand
NZL1: Level 1, 138 The Terrace, P.O. Box 472, Wellington 6011, New Zealand
Philippines
PHL1: Building H, 2nd Floor, U.P. Ayalaland TechnoHub, Commonwealth Avenue, Quezon
City, Metro Manila, 1101, Philippines
Poland
POL1: Natpoll Building, ul. Migdalowa 4/59, 02-796, Warsaw, Poland
Russia
RUS1: Pokrovka Street 27, Building 1, Moscow, Russian Federation
RUS2: 24 Bolshaya Nikitskaya Str., bldg. 5, Moscow 125009, Russian Federation
RUS3: Petrozavodskaya street 28/4, Building VI, room 2, 125475, Moscow, Russian
Federation
Saudi Arabia
SAU1: Al Fadl Commercial Center, Jeddah, 21411, Saudi Arabia
Singapore
SGP1: 3 Killiney Road, #08-01 Winsland House 1, Singapore, 239119, Singapore
SGP2: 16 Raffles Quay, #33-03 Hong Leong Building, Singapore, 048581, Singapore
SGP3: 80 Robinson Road, #02-00, Singapore, 068898, Singapore
SGP4: 1 Changi Business Park Crescent, #06-01 Plaza 8 & CBP, Singapore, 48602551,
Singapore
SGP5: 8 Robinson Road #03-00 ASO Building Singapore 048544
South Africa
ZAF1: Regus Brooklyn Bridge, 3rd Floor Steven House, Brooklyn Bridge Office Park,
Fehrsen Street, Brooklyn, Pretoria
ZAF2: Fourways Gold Park, 1st Floor – Wentworth Building, 32 Roos Street, Fourways,
2191, South Africa
ZAF3: 215 Peter Mokaba Road (North Ridge Road), Morningside, Durban, Kwa-Zulu Natal,
4001, South Africa
ZAF4: Thebe House, 2nd Floor, 166 Jan Smuts Avenue, Rosebank, Johannesburg, 2196,
South Africa
ZAF5: 14 Hertzog Street, Oranjeville, 9415
Spain
ESP1: C/ Josep Tarradellas 20-30, 1º / 20029, Barcelona, Spain
ESP2: Calle Zancoeta 0009, 48013, Bilbao, Viscaya, Spain
Switzerland
CHE1: Espace de L’Europe 3, 2002 Neuchatel, Switzerland
CHE2: Bahnhofstrasse 100 – 8001 Zurich
Taiwan
TWN1: Suite N-818, 8/F, Chia Hsin Cement Building, 96 Zhong Shan North Road, Section 2,
Taipei, 10449, Taiwan
Thailand
THA1: Sathorn Nakorn Building, Floor 32, No. 100/68-69 North Sathon Road, Silom,
Bangrak, Bangkok, 10500, Thailand
THA2: 540 Mercury Tower, 22nd Floor, Ploenchit Road, Lumpini, Pathumwan, Bangkok
10330
The Netherlands
NLD1: Radarweg 29, 1043 NX Amsterdam, Netherlands
NLD2: Galileiweg 8, 2333 BD Leiden, Netherlands
NLD3: Evert van de Beekstraat 1 The Base 3 / F, 1118CL Schiphol
NLD4: Prins Hendrikstraat 17, 7001GK Doetinchem
NLD5: Spaklerweg 53, 1114 AE Amsterdam-Duivendrecht
Turkey
TUR1: Maslak Mah. Bilim Sokak Sun Plaza Kat:13 Şişli-Maslak, Istanbul, Turkey
TUR2: Tüyap Fuar ve Kongre Merkezi, E – 5 Karayolu Üzeri, Gürpınar Kavşağı 34500,
Büyükçekmece, Istanbul, 34500, Turkey
Registered offices
United Kingdom
GBR1: 1-3 Strand, London, WC2N 5JR, United Kingdom
GBR2: Quadrant House, The Quadrant, Sutton, Surrey, SM2 5AS, United Kingdom
GBR3: AG Gateway Global Network, 85 Great Portland Street, First Floor, London,
W1W 7LT, United Kingdom
GBR4: Gateway House 28 The Quadrant, Richmond, Surrey, TW9 1DN, United Kingdom
GBR5: Lexis House, 30 Farringdon Street, London, EC4A 4HH, United Kingdom
GBR6: Global Reach, Dunleavy Drive, Cardiff, CF11 0SN, United Kingdom
GBR7: The Eye, 1 Procter Street, London, WC1V 6EU, United Kingdom
GBR8: The Boulevard, Langford Lane, Kidlington, Oxford, OX5 1GB, United Kingdom
GBR9: c/o RELX (UK) Limited, Butterworths Limited, 4 Hill Street, Edinburgh,
EH2 3JZ, Scotland
GBR10: 35 – 37 St. Marys Gate, Nottingham, United Kingdom, NG1 1PU
GBR11: 1st Floor 80 Moorbridge Road, Maidenhead, Berkshire, SL6 8BW
GBR12: 40 Kimbolton Road, Bedford, England, MK40 2NR
GBR13: 1000 Lakeside, Western Road, Portsmouth, PO6 3EN, United Kingdom
GBR14: Unit 18-19 Loughborough Technology Centre, Epinal Way, Loughborough,
England, LE11 3GE
United States
USA1: 1007 Church Street, Evanston IL 60201
USA2: 1000 Alderman Dr., Alpharetta, GA 30005
USA3: 230 Park Ave, New York, NY 10169
USA4: 1105 North Market St, Wilmington, DE 19801
USA5: 3355 West Alabama Street, Houston, TX 77098
USA6: Puerta Del Condado #1095, Wilson Ave, Local #3, San Juan, PR 00907
USA7:
USA8:
N909 N. Sepulveda Blvd., 11th Floor, El Segundo, CA 90245
313 Washington Street, Suite 400, Newton, MA 02458
USA9: 1209 Orange Street, Wilmington, DE 19801
USA10: 9443 Springboro Pike, Miamisburg, OH 45342
Vietnam
VIE1: 78 Nguyen Bieu, Ward 1, District 5, Ho Chi Minh City
30 Related undertakings (continued)
168 RELX Annual report and financial statements 2018 | Financial statements and other information
5 year summary
Restated
(3)
Note
2018
£m
2017
£m
2016
£m
2015
£m
2014
£m
RELX consolidated financial information
Revenue 7,492 7,341 6,889 5,971 5,773
Reported operating profit 1,964 1,905 1,708 1,497 1,402
Adjusted operating profit 1 2,346 2,284 2,114 1,822 1,739
Reported net profit attributable to RELX PLC shareholders 1,422 1,648 1,150 1,008 955
Adjusted net profit attributable to RELX PLC shareholders 1 1,674 1,620 1,473 1,275 1,213
RELX PLC financial information
Reported earnings per ordinary share (pence) 71.9p 81.6p 55.8p 46.4p 43.0p
Adjusted earnings per ordinary share (pence) 84.7p 80.2p 71.4p 60.5p 56.3p
Dividend per ordinary share (pence) 2 42.1p 39.4p 35.95p 29.7p 26.0p
(1) Adjusted figures are presented as additional performance measures used by management. A reconciliation of the adjusted measures to the comparable GAAP
measures can be found on page 176. Adjusted measures are stated before amortisation and impairment of acquired intangible assets and goodwill, the net
financing cost on defined benefit pension schemes and acquisition-related costs, exceptional tax credits and in respect of attributable net profit, reflect a tax
rate that excludes the effect of movements in deferred taxation assets and liabilities that are not expected to crystallise in the near term and includes the benefit
of tax amortisation where available on acquired goodwill and intangible assets. Acquisition-related financing costs and profit and loss from disposal gains and
losses and other non-operating items are also excluded from the adjusted figures.
(2) Dividend per ordinary share is based on the interim dividend and proposed final dividend for the relevant year.
(3) 2017 and 2016 numbers have been restated to reflect the adoption of new accounting standards. See note 1 on page 126 for further details.
RELX Annual report and financial statements 2018 169
RELX PLC
Annual Report and
Financial Statements
In this section
170 RELX PLC statement of financial position
171 RELX PLC statement of changes in equity
171 RELX PLC accounting policies
172 Notes to the RELX PLC financial statements
Overview Financial review GovernanceOverview Business review Financial statements and other information
170 RELX Annual report and financial statements 2018 | Financial statements and other information
RELX PLC statement of financial position
AS AT 31 DECEMBER
Note
2018
£m
2017
£m
Non-current assets
Investments in subsidiary undertakings 1 18,314 –
Investments in joint ventures 1 – 3,027
18,314 3,027
Current assets
Cash and cash equivalents 1 –
Trade and other receivables 1 –
Receivables: amounts due from subsidiary undertakings 1,536 –
Receivables: amounts due from joint venture – 205
Total assets 19,852 3,232
Current liabilities
Taxation 4 2
Other payables 109 56
113 58
Net assets 19,739 3,174
Capital and reserves
Share capital 290 162
Share premium 1,415 1,309
Shares held in treasury (643) (753)
Capital redemption reserve 31 25
Other reserves 164 160
Merger reserve 15,150 –
Net profit 2,063 817
Reserves 1,269 1,454
Shareholders’ equity 19,739 3,174
The RELX PLC Company financial statements were approved by the Board of Directors and authorised for issue on 20 February 2019.
They were signed on its behalf by:
A J Habgood N L Luff
Chairman Chief Financial Officer
171
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018
RELX PLC statement of changes in equity
Share
capital
£m
Share
premium
£m
Shares
held in
treasury
£m
Capital
redemption
reserve
(1)
£m
Other
reserves
(2)
£m
Merger
reserve
(1)
£m
Net
profit
£m
Reserves
(3)
£m
Total
£m
Balance at 1 January 2017 165 1,295 (645) 22 158 – 717 1,400 3,112
Total comprehensive income for the year – – – – – – 817 – 817
Dividends paid
(4)
– – – – – – – (400) (400)
Repurchase of ordinary shares – – (371) – – – – – (371)
Cancellation of shares (3) – 263 3 – – – (263) –
Issue of ordinary shares, net of expenses – 14 – – – – – – 14
Equity instruments granted to employees of the Group – – – – 2 – – – 2
Transfer of net profit to reserves – – – – – – (717) 717 –
Balance at 1 January 2018 162 1,309 (753) 25 160 – 817 1,454 3,174
Total comprehensive income for the year – – – – – – 2,063 – 2,063
Dividends paid
(4)
– – – – – – – (420) (420)
Repurchase of ordinary shares – – (472) – – – – (472)
Cancellation of shares (6) – 582 6 – – – (582) –
Issue of ordinary shares, net of expenses – 13 – – – – – – 13
Issue of ordinary shares in exchange for
RELX NV shares 134 93 – – – 15,150 – – 15,377
Equity instruments granted to employees of the Group – – – – 4 – – – 4
Transfer of net profit to reserves – – – – – – (817) 817 –
Balance at 31 December 2018 290 1,415 (643) 31 164 15,150 2,063 1,269 19,739
(1) The capital redemption and merger reserve do not form part of the distributable reserves balance.
(2) Other reserves relate to equity instruments granted to employees of the Group under share based remuneration arrangements, and do not form part of the
distributable reserves balance.
(3) Distributable reserves at 31 December 2018 were £2,689m (2017: £1,518m) comprising net profit and reserves, net of shares held in treasury.
(4) Refer to note 13 of the RELX consolidated financial statements on page 143 for further dividend disclosure.
RELX PLC accounting policies
Basis of preparation
RELX PLC meets the definition of a qualifying entity under FRS 100
(Financial Reporting Standard 100) issued by the Financial
Reporting Council (FRC). Accordingly, the financial statements
are prepared in accordance with FRS 101 (Financial Reporting
Standard 101) – Reduced Disclosure Framework as issued by the
Financial Reporting Council, incorporating the Amendments to
FRS 101 issued by the FRC in July 2015 and the amendments to
company law made by The Companies, Partnerships and Groups
(Accounts and Reports) Regulations 2015.
As permitted by FRS 101, RELX PLC has taken advantage of the
disclosure exemptions available under that standard in relation to
share based payments, financial instruments, capital management,
presentation of comparative information in respect of certain
assets, presentation of a cash flow statement, standards not yet
effective, impairment of assets and related party transactions.
The RELX PLC financial statements have been prepared on the
historical cost basis.
Unless otherwise indicated, all amounts in the financial statements
are in millions of pounds.
The RELX PLC financial statements should be read in conjunction
with the Group consolidated financial statements and notes
presented on pages 121 to 167, which are also presented as the
RELX PLC consolidated financial statements. See the Basis of
preparation of the consolidated financial statements on page 126.
The RELX PLC financial statements are prepared on a going
concern basis, as explained on page 111.
As permitted by section 408 of the Companies Act 2006, and in
compliance with The Companies, Partnerships and Groups
(Accounts and Reports) Regulations 2015, the Company has not
presented its own profit and loss account but has presented the
net profit for the year on the statement of financial position.
The RELX PLC accounting policies under FRS 101 are set out below.
Investments
Fixed asset investments are stated at cost, less provision, if
appropriate, for any impairment in value. The fair value of the
award of share options and conditional shares over RELX PLC
ordinary shares to employees of the Group are treated as a
capital contribution.
Other assets and liabilities are stated at historical cost, less
provision, if appropriate, for any impairment in value.
Shares held in treasury
The consideration paid, including directly attributable costs, for
shares repurchased is recognised as shares held in treasury and
presented as a deduction from total equity. Details of share capital
and shares held in treasury are set out in note 25 of the Group
consolidated financial statements.
Foreign exchange translation
Transactions entered into in foreign currencies are recorded at
the exchange rates applicable at the time of the transaction.
Taxation
Refer to note 9 on pages 138 to 141 of the consolidated financial
statements for the taxation accounting policies.
172 RELX Annual report and financial statements 2018 | Financial statements and other information
1 Investments
Subsidiary
undertaking
£m
Joint
venture
£m
Total
£m
At 1 January 2017 77 3,025 3,102
Impairment (77) – (77)
Equity instruments granted to employees of the Group – 2 2
At 1 January 2018 – 3,027 3,027
Acquisition of interest in RELX Group plc not already owned 18,310 (3,027) 15,283
Equity instruments granted to employees of the Group 4 – 4
At 31 December 2018 18,314 – 18,314
The acquisition of the remaining RELX Group plc interest relates to the transfer of RELX NV’s previously held interest in RELX Group plc
as a result of the corporate simplification. Following the simplification, RELX Group plc is recognised as a 100% owned subsidiary of
RELX PLC.
2 Related party transactions
All transactions with joint ventures, subsidiaries and the Group’s employees, which are related parties of RELX PLC, are reflected in
these financial statements. Transactions with key management personnel including share based remuneration costs are set out in note
27 of the Group consolidated financial statements and details of the Directors’ remuneration are included in the Directors’
Remuneration Report on pages 85 to 105.
3 Contingent liabilities
There are contingent liabilities in respect of borrowings of subsidiaries guaranteed by RELX PLC as follows:
2018
£m
2017
£m
Contingent liabilities guaranteed by RELX PLC 5,775 4,644
Financial instruments disclosures in respect of the borrowings covered by the above guarantees are given in note 18 of the Group’s
consolidated financial statements.
Notes to the RELX PLC financial statements
173
Overview Business review Financial review Governance
Other financial
information
In this section
174 Summary financial information in euros
175 Summary financial information in US dollars
176 Reconciliation of adjusted to GAAP measures
Financial statements and other information
RELX Annual report and financial statements 2018
Summary financial information in euros
Basis of preparation
The Group’s consolidated financial information is presented in sterling. The summary financial information is a simple translation
of the Group’s consolidated financial statements into euros at the stated rates of exchange.
EXCHANGE RATES FOR TRANSLATION
Income statement
Statement of
financial position
2018 2017 2016 2018 2017 2016
Euro to sterling 1.13 1.14 1.22 1.11 1.12 1.17
Consolidated income statement
FOR THE YEAR ENDED 31 DECEMBER
2018
€m
Restated
2017
€m
Restated
2016
€m
Revenue 8,466 8,369 8,405
Operating profit 2,219 2,172 2,084
Profit before tax 1,944 1,962 1,780
Net profit attributable to RELX PLC shareholders 1,607 1,879 1,403
Adjusted operating profit 2,651 2,604 2,579
Adjusted profit before tax 2,424 2,395 2,338
Adjusted net profit attributable to RELX PLC shareholders 1,892 1,847 1,797
Adjusted earnings per ordinary share €0.957 €0.915 €0.871
Basic earnings per ordinary share €0.813 €0.930 €0.680
Net dividend per ordinary RELX PLC share paid in the year €0.453 €0.426 €0.397
Net dividend per ordinary RELX PLC share paid and proposed in relation to the financial year €0.476 €0.449 €0.439
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER
2018
€m
Restated
2017
€m
Restated
2016
€m
Net cash from operating activities 2,243 2,182 2,124
Net cash used in investing activities (1,436) (473) (805)
Net cash used in financing activities (806) (1,760) (1,308)
Increase/(decrease) in cash and cash equivalents 1 (51) 11
Movement in cash and cash equivalents
At start of year 124 190 166
Increase/(decrease) in cash and cash equivalents 1 (51) 11
Exchange translation differences 2 (15) 13
At end of year 127 124 190
Adjusted cash flow 2,535 2,505 2,463
Consolidated statement of financial position
AS AT 31 DECEMBER
2018
€m
Restated
2017
€m
Restated
2016
€m
Non-current assets 12,928 11,673 13,223
Current assets 2,609 2,475 2,815
Assets held for sale 1 – 7
Total assets 15,538 14,148 16,045
Current liabilities 5,906 5,224 6,274
Non-current liabilities 7,010 6,333 7,065
Liabilities associated with assets held for sale 4 – 6
Total liabilities 12,920 11,557 13,345
Net assets 2,618 2,591 2,700
174 RELX Annual report and financial statements 2018 | Financial statements and other information
Summary financial information in US dollars
Basis of preparation
The Group’s consolidated financial information is presented in sterling. The summary financial information is a simple translation of
the Group’s consolidated financial statements into US dollars at the stated rates of exchange. It does not represent a restatement under
US GAAP which would be different in some significant respects.
EXCHANGE RATES FOR TRANSLATION
Income statement
Statement of
financial position
2018 2017 2016 2018 2017 2016
US dollars to sterling 1.34 1.29 1.36 1.27 1.35 1.23
Consolidated income statement
FOR THE YEAR ENDED 31 DECEMBER
2018
US$m
Restated
2017
US$m
Restated
2016
US$m
Revenue 10,039 9,470 9,369
Operating profit 2,632 2,457 2,323
Profit before tax 2,305 2,220 1,984
Net profit attributable to RELX PLC shareholders 1,905 2,126 1,564
Adjusted operating profit 3,144 2,946 2,875
Adjusted profit before tax 2,874 2,710 2,606
Adjusted net profit attributable to RELX PLC shareholders 2,243 2,090 2,003
Adjusted earnings per American Depositary Share (ADS) $1.134 $1.035 $0.971
Basic earnings per ADS $0.963 $1.053 $0.758
Net dividend per RELX PLC ADS paid in the year $0.537 $0.482 $0.443
Net dividend per RELX PLC ADS paid and proposed in relation to the financial year $0.564 $0.508 $0.489
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER
2018
US$m
Restated
2017
US$m
Restated
2016
US$m
Net cash from operating activities 2,660 2,469 2,368
Net cash used in investing activities (1,703) (535) (898)
Net cash used in financing activities (956) (1,992) (1,458)
Increase/(decrease) in cash and cash equivalents 1 (58) 12
Movement in cash and cash equivalents
At start of year 150 199 179
Increase/(decrease) in cash and cash equivalents 1 (58) 12
Exchange translation differences (6) 9 8
At end of year 145 150 199
Adjusted cash flow 3,006 2,834 2,746
Consolidated statement of financial position
AS AT 31 DECEMBER 2018
US$m
Restated
2017
US$m
Restated
2016
US$m
Non-current assets 14,792 14,070 13,902
Current assets 2,986 2,984 2,959
Assets held for sale 1 – 7
Total assets 17,779 17,054 16,868
Current liabilities 6,758 6,296 6,595
Non-current liabilities 8,020 7,635 7,428
Liabilities associated with assets held for sale 5 – 6
Total liabilities 14,783 13,931 14,029
Net assets 2,996 3,123 2,839
175
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018
The Group uses adjusted figures, which are not defined by generally accepted accounting principles (“GAAP”) such as IFRS, as additional
performance measures. These measures are used by management, alongside the comparable GAAP measures, in evaluating the business
performance. The measures may not be comparable to similarly reported measures by other companies.
A reconciliation of non-GAAP measures to relevant GAAP measures is as follows:
YEAR ENDED 31 DECEMBER
2018
£m
Restated
2017
£m
Operating profit 1,964 1,905
Adjustments:
Amortisation of acquired intangible assets 288 314
Acquisition-related costs 84 56
Reclassification of tax in joint ventures 11 10
Reclassification of finance income in joint ventures (1) (1)
Adjusted operating profit 2,346 2,284
Profit before tax 1,720 1,721
Adjustments:
Amortisation of acquired intangible assets 288 314
Acquisition-related costs 84 56
Reclassification of tax in joint ventures 11 10
Net interest on net defined benefit pension obligation 9 15
Disposals and other non-operating items 33 (15)
Adjusted profit before tax 2,145 2,101
Tax charge (292) (65)
Adjustments:
Deferred tax movements on goodwill and acquired intangible assets 34 42
Tax on acquisition-related costs (13) (13)
Reclassification of tax in joint ventures (11) (10)
Tax on net interest on net defined benefit pension obligation (2) (4)
Tax on disposals and other non-operating items (14) 16
Other deferred tax credits from intangible assets* (55) (93)
Exceptional tax credit** (112) (346)
Adjusted tax charge (465) (473)
Net profit attributable to RELX PLC shareholders 1,422 1,648
Adjustments (post-tax):
Amortisation of acquired intangible assets 322 356
Acquisition-related costs 71 43
Net interest on net defined benefit pension obligation 7 11
Disposals and other non-operating items 19 1
Other deferred tax credits from intangible assets* (55) (93)
Exceptional tax credit** (112) (346)
Adjusted net profit attributable to RELX PLC shareholders 1,674 1,620
Cash generated from operations 2,555 2,526
Adjustments:
Dividends received from joint ventures 30 38
Purchases of property, plant and equipment (56) (51)
Proceeds on disposals of property, plant and equipment 4 1
Expenditure on internally developed intangible assets (306) (303)
Payments in relation to acquisition-related costs/other 97 62
Repayment of lease principal (82) (76)
Sublease payments received 1 –
Adjusted cash flow 2,243 2,197
* Movements on deferred tax liabilities arising on acquired intangible assets that do not qualify for tax amortisation.
** In 2018 relates to the substantial resolution of certain prior year tax matters and deferred tax effect of tax rate reductions in the Netherlands and US. In 2017
relates to a one-off non-cash credit from a deferred tax adjustment arising from the US Tax Cuts and Jobs Act.
Reconciliation of adjusted to GAAP measures
176 RELX Annual report and financial statements 2018 | Financial statements and other information
RELX Annual report and financial statements 2018
Shareholder
information
In this section
178 Shareholder information
180 Shareholder information and contacts
IBC 2019 financial calendar
177
Business review Financial statements and other informationOverview GovernanceFinancial review
Shareholder information
Annual Report and Financial Statements 2018
The Annual Report and Financial Statements for RELX PLC for the
year ended 31 December 2018 are available on the Group’s
website, and from the registered office of RELX PLC shown
on page 180. Additional financial information, including the
interim and full-year results announcements, trading updates
and presentations, is also available on the Group’s website,
www.relx.com
The consolidated financial statements set out in the Annual Report
and Financial Statements are expressed in sterling, with summary
financial information expressed in euros and US dollars.
Share price information
RELX PLC’s ordinary shares are traded on the London Stock
Exchange.
PLC
Trading symbol REL
ISIN GB00B2B0DG97
RELX PLC’s ordinary shares are also traded on the Euronext
Amsterdam Stock Exchange.
PLC
Trading symbol REN
ISIN GB00B2B0DG97
The RELX PLC ordinary shares are traded on the New York Stock
Exchange in the form of American Depositary Shares (ADSs),
evidenced by American Depositary Receipts (ADRs).
PLC ADRs
Ratio to ordinary shares 1:1
Trading symbol RELX
CUSIP code 759530108
The RELX PLC ordinary share price and the ADS price may be
obtained from the Group’s website, other online sources and the
financial pages of some newspapers.
For further information visit the ‘Investor Centre’ section
of the Group’s website www.relx.com/investorcentre
Information for registered
ordinary shareholders
Shareholder services
The RELX PLC ordinary share register is administered by Equiniti
Limited. Equiniti provides a free online portal for shareholders at
www.shareview.co.uk. Shareview allows shareholders to monitor
the value of their shareholdings, view their dividend payments and
submit dividend mandate instructions. Shareholders can also
submit their proxy voting instructions ahead of company meetings,
as well as update their personal contact details. Shareview
Dealing provides a share purchase and sale facility. Equiniti’s
contact details are shown on page 180.
Electronic communications
While hard copy shareholder communications continue to be
available to those shareholders requesting them, in accordance
with the Companies Act 2006 and the Company's articles of
association, the Company uses the Group’s website as the main
method of communicating with shareholders. By registering their
details online at Shareview, shareholders can be notified by email
when shareholder communications are published on the Group’s
website. Shareholders can also use the Shareview website to
appoint a proxy to vote on their behalf at shareholder meetings.
Shareholders who hold their Company shares through CREST
may appoint proxies for shareholder meetings through the CREST
electronic proxy appointment service by using the procedures
described in the CREST manual.
Dividend mandates
Shareholders are encouraged to have their dividends paid
directly into a UK bank or building society account. This method
of payment reduces the risk of delay or loss of dividend cheques
in the post and ensures the account is credited on the dividend
payment date. A dividend mandate form can be obtained online
at www.shareview.co.uk, or by contacting Equiniti at the address
shown on page 180.
Equiniti has established a service for overseas shareholders
in over 90 countries, which enables shareholders to have their
dividends automatically converted from sterling and paid
directly into their nominated bank account. Further details
of this service, and the fees applicable, are available at
www.shareview.co.uk/info/ops or by contacting Equiniti
at the address shown on page 180.
Dividend Reinvestment Plan
Shareholders can choose to reinvest their Company dividends
by purchasing further shares through the Dividend Reinvestment
Plan (DRIP) provided by Equiniti. Further information
concerning the DRIP facility, together with the terms and
conditions and an application form can be obtained online at
www.shareview.co.uk/info/drip or by contacting Equiniti at the
address shown on page 180.
178 RELX Annual report and financial statements 2018 | Financial statements and other information
Share dealing service
A telephone and internet dealing service is available through
Equiniti, which provides a simple way for UK resident shareholders
to buy or sell their shares. For telephone dealing call 0345 603
7037 between 8.30am and 5.30pm (UK time), Monday to Friday
(excluding public holidays in England and Wales), and for internet
dealing log on to www.shareview.co.uk/dealing. You will need your
shareholder reference number shown on your dividend
confirmation.
ShareGift
The Orr Mackintosh Foundation operates a charity share donation
scheme for shareholders with small parcels of shares whose
value makes it uneconomic to sell them. Details of the scheme
can be obtained from the ShareGift website at www.sharegift.org,
or by telephoning ShareGift on 020 7930 3737.
Sub-division of ordinary shares and share consolidation
On 28 July 1986, each RELX PLC ordinary share of £1 nominal
value was sub-divided into four ordinary shares of 25p each.
On 2 May 1997, each 25p ordinary share was sub-divided into two
ordinary shares of 12.5p each. On 7 January 2008, the ordinary
shares of 12.5p each were consolidated on the basis of 58 new
ordinary shares of 1451⁄
116
p nominal value for every 67 ordinary
shares of 12.5p each held.
Capital gains tax
The mid-market price of RELX PLC’s £1 ordinary shares on 31
March 1982 was 282p. Adjusting for the sub-divisions and
share consolidation referred to above results in an equivalent
mid-market price of 40.72p for each existing ordinary share
of 1451⁄
116
p nominal value.
Warning to shareholders –
unsolicited investment advice
From time to time shareholders may receive unsolicited calls
from fraudsters
Fraudsters use persuasive and high-pressure tactics to lure
investors into scams, sometimes known as boiler room scams
They may offer to sell shares that turn out to be worthless or
non-existent, or to buy shares at an inflated price in return for
an upfront payment
While high profits are promised, if you buy or sell shares in this
way you will probably lose your money
Thousands of people contact the Financial Conduct Authority
about investment fraud each year, with victims losing an
average of £32,000
How to avoid share fraud and boiler room scams
The Financial Conduct Authority (FCA) has issued some guidance
on how to recognise and avoid investment fraud:
Legitimate firms authorised by the FCA are unlikely to contact
you unexpectedly with an offer to buy or sell shares
If you receive an unsolicited phone call, do not get into a
conversation, note the name of the person and firm contacting
you and then end the call
Check the Financial Services Register available at
https://register.fca.org.uk/ to see if the person and firm
contacting you is authorised by the FCA. If you wish to call the
person or firm back, only use the contact details listed on the
Register
Call the FCA on 0800 111 6768 if the firm does not have any
contact details on the Register, or if you are told that they are
out of date
Search the list of unauthorised firms to avoid at
https://www.fca.org.uk/consumers/unauthorised-firms-
individuals#list
If you do buy or sell shares through an unauthorised firm, you
will not have access to the Financial Ombudsman Service or the
Financial Services Compensation Scheme
Consider obtaining independent financial and professional
advice before you hand over any money. If it sounds too good
to be true it probably is.
How to report a scam
If you are approached by fraudsters, please tell the FCA using
the share fraud reporting form at www.fca.org.uk/consumers/
report-scam-unauthorised-firm, where you can find out more
about investment scams. You can also call the FCA Consumer
Helpline on 0800 111 6768.
If you have already paid money to share fraudsters, you should
contact Action Fraud on 0300 123 2040 or use their online tool:
http://www.actionfraud.police.uk/report_fraud
Overview Business review Financial review Governance Financial statements and other information
RELX Annual report and financial statements 2018 | Shareholder information 179
Shareholder information and contacts
Information for holders of ordinary shares
held through Euroclear Nederland
Shareholders with enquiries concerning RELX PLC ordinary
shares that are not held directly on the Register of Members and
are ultimately held through Nederlands Centraal Instituut voor
Giraal Effectenverkeer BV (Euroclear Nederland) should direct
their enquiries to the broker, financial intermediary, bank or other
financial institution that holds the shares on their behalf.
Dividend Reinvestment Plan
Shareholders can choose to reinvest their dividends by purchasing
shares through the Dividend Reinvestment Plan (DRIP) provided
by ABN AMRO Bank NV. Further information concerning the DRIP
facility can be obtained online at www.securitiesinfo.com.
Information for ADR holders
ADR shareholder services
Enquiries concerning RELX PLC ADRs should be addressed
to the ADR Depositary, Citibank NA, at the address shown below.
Dividend payments on RELX PLC ADRs are converted into US
dollars by the ADR Depositary.
Annual Report on Form 20-F
The RELX Annual Report on Form 20-F is filed electronically with
the United States Securities and Exchange Commission. A copy of
the Form 20-F is available on the Group’s website, or from the ADR
Depositary at the address shown below.
Contacts
RELX PLC
Head Office and Registered Office
1-3 Strand
London WC2N 5JR
United Kingdom
Tel: +44 (0)20 7166 5500
Fax: +44 (0)20 7166 5799
Auditors
Ernst & Young LLP
1 More London Place
London SE1 2AF
United Kingdom
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing BN99 6DA
West Sussex
United Kingdom
www.shareview.co.uk
Tel: 0371 384 2960 (UK callers)
Tel: +44 121 415 0165 (callers outside the UK)
Dividend currency elections
Following the completion of the corporate simplification in
September 2018, shareholders appearing on the Register of
Members or holding their shares through CREST will continue to
receive their dividends in Pounds Sterling, but will have the option
to elect to receive their dividends in Euro. Euro payments will be
made by cheque only.
Shareholders who appear on the Register of Members and wish
to receive their dividend in Euro should contact our Registrar,
Equiniti on 0371 384 2960 (UK) or +44 (0) 121 415 0165 (from outside
the UK) for a dividend election form and further information
regarding the Euro dividend option. Alternatively, shareholders
can view and update their current dividend elections by registering
for a Shareview Portfolio at www.shareview.co.uk/register.
Shareholders who hold their shares through CREST and wish to
receive their dividend in Euro, must do so by following the CREST
Elections process.
Former RELX NV shareholders who now hold RELX PLC shares
through Euroclear Nederland (via banks and brokers), will
automatically receive their dividends in Euro, but will have the
option to elect to receive their dividends in Pounds Sterling.
Shareholders who hold their shares through Euroclear Nederland
and wish to receive their dividends in Pounds Sterling should
contact their broker, financial intermediary, bank or other financial
institution that holds the shares on their behalf.
Listing/paying agent for shares listed on Euronext Amsterdam
held through Euroclear Nederland
ABN AMRO Bank NV
Department Corporate Broking HQ7212
Gustav Mahlerlaan 10
1082 PP Amsterdam
The Netherlands
Email: corporate.broking@nl.abnamro.com
www.securitiesinfo.com
RELX PLC ADR Depositary
Citibank Depositary Receipt Services
PO Box 43077
Providence, RI 02940-3077
USA
www.citi.com/dr
Email: citibank@shareholders-online.com
Tel: +1 877 248 4327
+1 781 575 4555 (callers outside the US)
180 RELX Annual report and financial statements 2018 | Financial statements and other information
2019 financial calendar
21 February Results announcement for the year ended 31 December 2018
25 April Trading update issued in relation to the 2019 financial year
25 April Annual General Meeting – Amba Hotel , Strand, London WC2N 5HX
2 May Ex-dividend date – 2018 final dividend, ordinary shares and ADRs
3 May Record date – 2018 final dividend, ordinary shares and ADRs
20 May Dividend currency and DRIP election deadline
23 May Euro dividend equivalent announcement
4 June Payment date – 2018 final dividend, ordinary shares
7 June Payment date – 2018 final dividend, ADRs
25 July Interim results announcement for the six months to 30 June 2019
1 August* Ex-dividend date – 2019 interim dividend, ordinary shares and ADRs
2 August * Record date – 2019 interim dividend, ordinary shares and ADRs
* Please note that these dates are provisional and subject to change. The 2019 Interim Dividend payment dates in respect of ordinary
shares and ADRs will be confirmed by the Company in its 2019 Interim Results announcement, currently scheduled for release on
25 July 2019.
Dividend history
The following tables set out dividends paid (or proposed) in relation to the three financial years 2016–2018.
ORDINARY SHARES pence per PLC ordinary share Payment date
Final dividend for 2018** 29.70 4 June 2019
Interim dividend for 2018 12.40 24 August 2018
Final dividend for 2017 27.70 22 May 2018
Interim dividend for 2017 11.70 25 August 2017
Final dividend for 2016 25.70 22 May 2017
Interim dividend for 2016 10.25 26 August 2016
**Proposed dividend, to be submitted for approval at the Annual General Meeting of RELX PLC in April 2019.
ADRS $ per PLC ADR Payment date
Final Dividend for 2018*** *** 7 June 2019
Interim Dividend for 2018 0.15914 29 August 2018
Final dividend for 2017 0.37159 25 May 2018
Interim dividend for 2017 0.15085 30 August 2017
Final dividend for 2016 0.33387 25 May 2017
Interim dividend for 2016 0.13452 31 August 2016
***Payment will be determined using the appropriate £/US$ exchange rate on 4 June 2019.
Credits
Designed and produced by
Conran Design Group
Board photography by
Douglas Fry, Piranha Photography
Printed by
Pureprint Group, ISO14001, FSC
®
certified and CarbonNeutral
®
Printed on Revive 100 Silk which is made from 100% recovered
waste. All of the pulp is bleached using an elemental chlorine
free process (ECF). Printed in the UK by Pureprint using their
environmental printing technology; vegetable inks were used
throughout. Pureprint is a CarbonNeutral
®
company. Both
manufacturing mill and printer are ISO14001 registered and are
Forest Stewardship Council
®
(FSC) chain-of-custody certified.
Annual Report and Financial Statements 2018
www.relx.com
