16th Nov 2006 07:02
Reed Elsevier PLC16 November 2006 News Release Issued on behalf of Reed Elsevier PLC and Reed Elsevier NV 0700 (GMT) 16 November 2006 REED ELSEVIER PROVIDES UPDATE ON TRADING Reed Elsevier today reaffirmed that it is on track to deliver on its targetsthis year of organic revenue growth of 5% (6% in total) and 10% growth inadjusted earnings per share at constant currencies. The Elsevier, LexisNexis and Reed Business divisions are performing strongly ingenerally favourable market conditions. These businesses, which account for over85% of Reed Elsevier's adjusted operating profits, are continuing to showencouraging revenue momentum and good underlying margin improvement. TheHarcourt Education division has however been impacted by underperformance in theAssessment business and a weak textbook market. The transition of professional markets towards technology enabled informationand solutions is progressing well for Reed Elsevier: forging new and deeperrelationships with our customers, widening our product offerings, and enablingus to reach new customers. The performance trends in Reed Elsevier's businesses are as follows: Elsevier is performing well in both the Science and Health markets. Subscriptionrenewals have been strong, the second half book publishing programme is goingwell, and there is continued good growth in online product sales. Underlyingoperating margins are improving with good revenue growth and further costefficiency. (Reported margins will be lower than in the prior year due to thecurrency effect of the weaker dollar hedge rates on subscription revenues andlower margin acquisitions.) LexisNexis is performing well. Good momentum is seen in subscription renewalsand new sales of online information and solutions in US legal and internationalmarkets. Strong growth in risk management and higher volumes of patentapplications are driving good growth in US corporate and federal markets.Underlying operating margins are improving with the growth in the business andoperational gearing. Harcourt Education overall revenues are expected to be broadly flat on the prioryear, against earlier expectations of modest growth, largely due to weakertextbook markets and the underperformance in Assessment. Within the US basal andsupplemental textbook markets, Harcourt Education has performed well and aheadof market trends, with a leading share in available state textbook adoptions andgood progress in new supplemental publishing. The Assessment business hashowever been significantly impacted by the operational difficulties and costoverruns in the state contract business. Organisational changes and newleadership are starting to make a difference in Assessment. Overall adjustedoperating margins for the Education business will be down (approximately 4percentage points) on the prior year. Reed Business is performing well with particularly strong demand in exhibitions.(The net cycling out of biennial shows in the second half reverses the cyclinggains in the first half). The magazine and information business is showingoverall solid growth with strongly growing online sales outpacing the decline inprint. Underlying operating margins are showing good progress through growth inthe higher margin exhibition business, increasing profitability of the onlinebusiness and continued cost efficiency. Commenting, Sir Crispin Davis, Chief Executive Officer, said: "The business is performing well despite the issues in Assessment, with goodrevenue growth and underlying margin improvement across the rest of thebusiness. Of long term significance is the move to online information andsolutions in our markets, which is profound and opening up real opportunitiesfor us to add more value to our customers and reach new ones. Combiningauthoritative content with technology is driving superior outcomes for theresearch scientist, medical practitioner, lawyer, teacher and businessprofessional. With the growing success of our strategy and a favourable marketoutlook, the prospects for Reed Elsevier look good." This announcement contains forward looking statements within the meaning ofSection 27A of the US Securities Act 1933, as amended, and Section 21E of the USSecurities Exchange Act 1934, as amended. These statements are subject to anumber of risks and uncertainties and actual results, and events could differmaterially from those currently being anticipated as reflected in such forwardlooking statements. The terms "expect", "should be", "will be" and similarexpressions identify forward looking statements. Factors which may cause futureoutcomes to differ from those foreseen in forward looking statements include,but are not limited to: general economic conditions in Reed Elsevier's markets;exchange rate fluctuations; customers' acceptance of our products and services;the actions of competitors; legislative, fiscal and regulatory developments;changes in law and legal interpretations affecting Reed Elsevier's intellectualproperty rights and internet communications; and the impact of technologicalchange. - ends -EnquiriesSybella Stanley Tel: +44 (0) 20 7166 5630(Investors) Patrick Kerr Tel: +44 (0) 20 7166 5646(Media) Notes to editors Reed Elsevier Group plc Reed Elsevier Group plc is a world leading publisher and information provider.It is owned equally by its two parent companies, Reed Elsevier PLC and ReedElsevier NV. The parent companies are listed on the London, Amsterdam and NewYork Stock Exchanges, under the following ticker symbols: London: REL;Amsterdam: REN; New York: RUK and ENL. In 2005, Reed Elsevier made adjustedprofit before taxation of £1,002 million on turnover of £5,166 million. Thegroup employs 36,000 people, including approximately 20,000 in North America.Operating in the scientific, legal, educational and business-to-businesssectors, Reed Elsevier provides high value and flexible information solutions toprofessional end users, with increasing emphasis on internet delivery. Forfurther information, please visit the company website www.reedelsevier.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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