As filed with the Securities and Exchange Commission on February 22, 2024
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Or
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number:
(Exact name of Registrant as specified in its charter)
(Jurisdiction of incorporation or organisation)
(Address of principal executive offices)
(Name, telephone, e-mail and/or facsimile number and address of
Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of exchange on which registered |
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Listed, not for trading, but only in connection with the listing of the applicable Registrant’s American Depositary Shares issued in respect thereof. |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of December 31, 2023:
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Number of outstanding shares |
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Ordinary shares of 14 51/116p each |
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer ☐ |
Non-accelerated filer ☐ |
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Emerging growth company
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. |
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† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. |
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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. |
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Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). |
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Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.
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US GAAP
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If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow:
Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
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Auditor Firm Id : |
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Auditor Name : |
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Auditor Location : |
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TABLE OF CONTENTS
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8 |
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ITEM 1: |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
N/A |
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ITEM 2: |
OFFER STATISTICS AND EXPECTED TIMETABLE |
N/A |
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12 |
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15 |
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ITEM 4A: |
UNRESOLVED STAFF COMMENTS |
N/A |
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17 |
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17 |
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24 |
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ITEM 13: |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
N/A |
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ITEM 14: |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
N/A |
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52 |
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55 |
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55 |
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55 |
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ITEM 16D: |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
N/A |
2
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
56 |
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ITEM 16F: |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
N/A |
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57 |
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ITEM 16H: |
MINE SAFETY DISCLOSURE |
N/A |
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ITEM 16I: |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
N/A |
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ITEM 16J: |
INSIDER TRADING POLICIES |
N/A |
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57 |
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F-1 |
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F-1 |
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F-1 |
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F-2 |
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S-1 |
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S-3 |
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The registrant has responded to Item 18 in lieu of responding to this Item. |
3
GENERAL
RELX PLC is a public limited company, and owns all of the Group.
As used in this Annual Report on Form 20-F, the terms “Group”, “RELX”, “we”, “our” or “us” refer collectively to RELX PLC and its subsidiaries, associates and joint ventures. For dates and periods ended before the corporate simplification on September 8, 2018, such terms refer collectively to RELX PLC, RELX NV, RELX Group plc and its subsidiaries, associates and joint ventures. Additional terms are defined in the Glossary of Terms on pages S-1 and S-2.
In this Annual Report on Form 20-F, references to US dollars, $ and ¢ are to US currency; references to sterling, £, pound sterling, pence or p are to UK currency; references to euro and € are to the currency of the European Economic and Monetary Union.
Statements regarding our competitive position included herein were obtained from internal surveys, market research, publicly available information and industry publications. While we believe that the market research, publicly available information and industry publications we use are reliable, we have not independently verified market and industry data from third-party sources. Moreover, while we believe our internal surveys are reliable, they have not been verified by any independent source.
This document contains references to the RELX website, either within the document or incorporated by reference. Information not specifically stated as being incorporated by reference to the RELX website or any other website referenced is not incorporated into this document and should not be considered part of this document.
Pursuant to Rule 12b-23(a) of the US Securities Exchange Act of 1934, as amended (the “Exchange Act”), certain information in this Annual Report on Form 20-F is being incorporated herein by reference to the RELX Annual Report and Financial Statements 2023 appended hereto as Exhibit 15.2. With the exception of the items and pages so specified, the RELX Annual Report and Financial Statements 2023 are not deemed to be filed as part of this Annual Report on Form 20-F. For the avoidance of doubt, other information mentioned in or contained within the RELX Annual Report and Financial Statements 2023, including the content of the RELX website and other pages or sections of the RELX Annual Report and Financial Statements 2023 referenced, but not contained, in the items and pages so specified are not deemed to be filed as part of this Annual Report on Form 20-F.
5
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 20-F contains a number of forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, with respect to, among others:
| ● | our financial condition; |
| ● | our results of operations; |
| ● | our competitive positions; |
| ● | the features and functions of and markets for the products and services we offer; and |
| ● | our business plans and strategies. |
We consider any statements that are not historical facts to be “forward-looking statements”. These statements are based on the current expectations of the management of the Group and are subject to risks and uncertainties that could cause actual results or outcomes to differ from those expressed in any forward-looking statement. These differences could be material; therefore, you should evaluate forward-looking statements in light of various important factors, including those set forth or incorporated by reference in this Annual Report on Form 20-F.
Important factors that could cause our actual results to differ materially from estimates or forecasts contained in the forward-looking statements include, among others:
| ● | regulatory and other changes regarding the collection or use of personal data; |
| ● | changes in law and legal interpretation affecting our intellectual property rights and internet communications; |
| ● | current and future geopolitical, economic and market conditions; |
| ● | changes in the payment model for our scientific, technical and medical research products; |
| ● | competitive factors in the industries in which we operate and demand for our products and services; |
| ● | our inability to realise the future anticipated benefits of acquisitions; |
| ● | compromises of our cyber security systems or other unauthorised access to our databases; |
| ● | changes in economic cycles, communicable disease epidemics or pandemics, severe weather events, natural disasters and terrorism; |
| ● | failure of third parties to whom we have outsourced business activities; |
| ● | significant failure or interruption of our systems; |
| ● | our inability to retain high-quality employees and management; |
| ● | changes in tax laws and uncertainty in their application; |
| ● | exchange rate fluctuations; |
| ● | adverse market conditions or downgrades to the credit ratings of our debt; |
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| ● | changes in the market values of defined benefit pension scheme assets and in the market related assumptions used to value scheme liabilities; |
| ● | breaches of generally accepted ethical business standards or applicable laws; |
| ● | failure to comply with consent orders by the US Federal Trade Commission (“FTC”); and |
| ● | other risks referenced from time to time in the filings of RELX PLC with the US Securities and Exchange Commission (the “SEC”), including the risks described in “Item 3: Key Information — Risk Factors”. |
The terms “outlook”, “estimate”, “forecast”, “project”, “plan”, “intend”, “expect”, “should”, “could”, “will”, “believe”, “trends” and similar expressions may indicate a forward-looking statement. Forward-looking statements are found at various places throughout this Annual Report on Form 20-F and the other information incorporated by reference in this Annual Report on Form 20-F.
You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 20-F. Except as may be required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Annual Report on Form 20-F or to reflect the occurrence of unanticipated events.
7
PART I
ITEM 3: KEY INFORMATION
RISK FACTORS
The principal and emerging risks facing our business are included below. Additional risks not presently known to us or that we currently deem immaterial may also impair our business.
EXTERNAL RISKS
Regulatory changes regarding the collection and use of personal data by us or compromises of our data privacy controls and other unauthorised access to our databases, could adversely affect our business and operations.
In the course of our business, we process personal data from customers, end users, employees and other sources. Certain business areas rely extensively upon content that includes personal data from public records, governmental authorities, publicly available information and media, and other information companies, including competitors. Changes in data privacy legislation, regulation, and/or enforcement could impact our ability to collect and use personal data, potentially affecting the availability and effectiveness of our products. Failure or perceived failure to comply with requirements for proper collection, use, storage, transfer and other processing of personal data may damage our reputation, divert time and effort of management and other resources, increase cost of operations, and expose us to risk of loss, fines and penalties, litigation, and increased regulation.
Our intellectual property rights may not be adequately protected under current laws in some jurisdictions, which may adversely affect our results and our ability to grow.
Our products and services include and utilise intellectual property. We rely on trademark, copyright, patent, trade secret and other intellectual property laws to establish and protect our proprietary rights in this intellectual property. There is a risk that our proprietary rights could be challenged, limited, invalidated, infringed, or circumvented, including by AI technologies, 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.
Current and future geopolitical, economic and market conditions, and dislocations beyond our control may adversely affect demand for our products and services .
Demand for our products and services, and our ability to operate internationally, may be adversely impacted by geopolitical, economic and market conditions beyond our control. These include acts of war and civil unrest, political conflicts and tensions, international sanctions, the impact of the effect of changes in inflation and interest rates in major economies, trading relations between the United States, Europe, China and other major economies, as well as levels of government and private funding for our markets.
Changes in the payment model for our scientific, technical and medical primary research products or alternative publication channels for our content could adversely affect our operations.
Our Scientific, Technical Medical (STM) primary research content publishing business operates under two payment models: ‘pay-to-read’, where readers or their institutions, as users of the content pay, and authors publish for free, or ‘pay-to-publish’, where authors or their institutions or funding bodies prefer to pay to publish their research, so it is freely available to read. The latter model is commonly referred to as Open Access and now represents a significant portion of the volume of primary research that we publish. There is continued debate in government, academic and library communities, regarding the payment models and the extent to which research content should be freely available to read, either immediately on publication or in some form after a period following publication. Rapid changes in customer choice or regulation in this area could impact the mix and overall level of revenue generated by our primary research publishing business.
8
STRATEGIC RISKS
We operate in a highly competitive and dynamic environment that is subject to rapid change and cannot assure you that there will be continued demand for our products and services.
Our businesses are dependent on the continued demand by our customers for our products and services and the value placed on them. We operate in highly competitive and dynamic markets, and the means of delivery, customer demand for, and the products and services themselves, continue to change in response to technological innovations, such as the use of artificial intelligence, legislative and regulatory changes, the entrance of new competitors, and other factors. Failure to anticipate and quickly adapt to these changes, or to deliver enhanced value to our customers, could impact demand for our products and services and consequently adversely affect our revenue or the long-term returns from our investment in higher value-add information-based analytics and decision tools.
We may not realise all of the future anticipated benefits of acquisitions.
We supplement our organic development with selected acquisitions. If we are unable to generate the anticipated benefits such as revenue growth and/or cost savings associated with these acquisitions, it could adversely affect return on invested capital and financial condition or lead to an impairment of goodwill or intangibles.
OPERATIONAL RISKS
Compromises of our cyber security systems and other unauthorised access to our databases, could adversely affect our business and operations.
Our businesses maintain and use 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 including through cyber, ransomware and phishing attacks on us or our third-party service providers.
Our cyber security measures, and the measures used by our third-party service providers, may not detect or prevent all attempts to compromise our systems, which may jeopardise the security of the data we maintain or may disrupt our systems. Failures of our cyber security measures could result in unauthorised access to our systems, misappropriation of our or our users’ data, deletion or modification of stored information or other interruption to our business operations. As techniques used to obtain unauthorised access to or to sabotage systems change frequently and may not be known until launched against us or our third-party service providers we may be unable to anticipate or implement adequate measures to protect against these attacks and our service providers and customers may likewise be unable to do so.
Compromises of our or our third-party service providers’ systems could adversely affect our financial performance, damage our reputation and expose us to risk of loss, fines and penalties, litigation and increased regulation.
Changes in economic cycles, communicable disease epidemics, severe weather events, natural disasters, terrorism, and lack of venues may impact our ability to organise events.
Face-to-face events are susceptible to economic cycles, communicable diseases, severe weather events and other natural disasters, terrorism and availability of venues. Each or any of these may impact our ability to hold face-to-face events, and exhibitors’ and visitors’ desire and ability to travel in person to events. These factors each have the potential to reduce revenues, increase the costs of organising events and adversely affect cash flows and reputation.
Our business may be adversely affected by the failure of third parties to whom we have outsourced business activities.
Our organisational and operational structures depend on suppliers including outsourced and offshored functions, as well as cloud service, software, and large language model providers. Poor performance, failure or breach of third parties to whom we have contracted could adversely affect our business performance, reputation and financial condition.
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We source content to enable information solutions for our professional customers. The disruption or loss of data sources, either because of regulations, or because data suppliers decide not to supply them, may impose limits on our collection and use of certain kinds of information and our ability to communicate, offer or make such information available or useful to our customers.
A significant failure or interruption of our electronic delivery platforms, networks, distribution systems or infrastructure could adversely affect our business and operations.
Our businesses are dependent on electronic platforms and networks, primarily the internet, for delivery of our products and services. These could be adversely affected if our electronic delivery platforms, networks or supporting infrastructure experience a significant failure or interruption. Climate change may increase the intensity and frequency of severe weather events which increases the risk of significant failure.
We may be unable to implement and execute our strategic and business plans if we cannot recruit and retain skilled employees and management.
The implementation and execution of our strategies and business plans depend on our ability to recruit, motivate, develop, and retain a diverse population of skilled employees and management. We compete globally and across business sectors for diverse, talented management and skilled individuals, particularly those with technology and data analytics capabilities. An inability to recruit, motivate or retain such people could adversely affect our business performance.
FINANCIAL RISKS
Changes in tax laws or uncertainty over their application and interpretation may adversely affect our reported results.
Our business operates globally, and our profits are subject to taxation in many different jurisdictions and at differing tax rates. Tax laws that currently apply to our business may be amended by the relevant authorities or interpreted differently by them, and these changes could adversely affect our reported results.
Fluctuations in exchange rates may affect our results.
The RELX PLC consolidated financial statements are expressed in pounds sterling and are subject to movements in exchange rates on the translation of the financial information of businesses whose operational currencies are other than sterling. The United States is our most important market and, accordingly, significant fluctuations in the US dollar exchange rate could significantly affect our reported results. We also earn revenues and incur costs in a range of other currencies, including the euro and the yen, and significant fluctuations in these exchange rates could also significantly impact our reported results.
Market conditions and credit ratings may affect the availability and cost of funding.
Macroeconomic, political and market conditions may adversely affect the availability and terms of 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.
Changes in the market values of defined benefit pension scheme assets and in the assumptions used to value defined benefit pension scheme obligations may adversely affect our business.
We operate a number of pension schemes around the world, including local versions of the defined benefit type in the United Kingdom and the United States. The US scheme is closed to future accruals. The UK scheme has been closed to new hires since 2010. The members who continue to accrue benefits now represent a small and reducing portion of the overall UK based workforce. The assets and obligations associated with these pension schemes are sensitive to changes in the market values of the scheme’s investments and the market-related assumptions used to value scheme liabilities. Adverse changes to asset values, discount rates, longevity assumptions or inflation could increase funding requirements.
10
REPUTATIONAL RISKS
Breaches of generally accepted ethical business standards or applicable statutes concerning bribery, corruption, fraud, sanctions and competition could adversely affect our reputation and financial condition.
As a global provider of professional information solutions we, our employees and major suppliers are expected to adhere to high standards of integrity and ethical conduct, including those related to anti-bribery and anti-corruption, fraud, sanctions, competition and principled business conduct. A breach of generally accepted ethical business standards or applicable laws could adversely affect our business performance, reputation, and financial condition.
REGULATORY RISKS
Our business, operations and reputation could be adversely affected by a failure to comply with FTC consent orders.
We are party to two consent orders entered into in 2006 and 2008 regarding our compliance with US federal laws governing consumer information and security-related issues, including certain fraudulent data access incidents. Failure to comply with these orders could result in civil penalties and adversely affect our business, operations and reputation.
11
ITEM 4: INFORMATION ON THE GROUP
BUSINESS OVERVIEW
RELX PLC is a public limited company, incorporated in England under the UK Companies Act 2006 (as amended) (the “Companies Act”).
RELX is a global provider of information-based analytics and decision tools for professional and business customers. RELX serves customers in more than 180 countries and has offices in about 40 countries. It employs over 36,000 people, over 40% of whom are in North America.
We operate in four major market segments: Risk; Scientific, Technical Medical; Legal; and Exhibitions.
| ● | Risk 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. |
| ● | Scientific, Technical Medical helps researchers and healthcare professionals advance science and improve health outcomes by combining quality information and data sets with analytical tools to facilitate insights and critical decision-making. |
| ● | Legal provides legal, regulatory and business information and analytics that help customers increase their productivity, improve decision-making and achieve better outcomes. |
| ● | Exhibitions combines industry expertise with data and digital tools to help customers connect face-to-face and digitally, learn about markets, source products and complete transactions. |
Information on revenue by geographical market is set forth in note 2 to our consolidated financial statements under the heading “Revenue, operating profit and segment analysis” on page 172 to 175 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
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Revenue Year ended December 31, |
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2020 |
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2021 |
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2022 |
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2023 |
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(in millions, except percentages) |
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Risk |
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£ |
2,417 |
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34 |
% |
£ |
2,474 |
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34 |
% |
£ |
2,909 |
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34 |
% |
£ |
3,133 |
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34 |
% |
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Scientific, Technical Medical |
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2,692 |
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38 |
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2,649 |
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37 |
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2,909 |
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34 |
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3,062 |
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34 |
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Legal |
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1,639 |
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23 |
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1,587 |
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22 |
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1,782 |
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21 |
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1,851 |
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20 |
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Exhibitions |
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362 |
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5 |
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534 |
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7 |
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953 |
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11 |
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1,115 |
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12 |
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Total |
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£ |
7,110 |
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100 |
% |
£ |
7,244 |
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100 |
% |
£ |
8,553 |
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100 |
% |
£ |
9,161 |
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100 |
% |
RISK
The information set forth under the headings ‘Business overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 14 to 17 of the RELX Annual Report and Financial Statements 2023 is incorporated herein by reference to Exhibit 15.2.
SCIENTIFIC, TECHNICAL MEDICAL
The information set forth under the headings ‘Business overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 20 to 23 of the RELX Annual Report and Financial Statements 2023 is incorporated herein by reference to Exhibit 15.2.
12
LEGAL
The information set forth under the headings ‘Business overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 26 to 29 of the RELX Annual Report and Financial Statements 2023 is incorporated herein by reference to Exhibit 15.2.
EXHIBITIONS
The information set forth under the headings ‘Business overview’, ‘Market opportunities’, ‘Strategic priorities’ and ‘Business model, distribution channels and competition’ on pages 32 to 33 of the RELX Annual Report and Financial Statements 2023 is incorporated herein by reference to Exhibit 15.2.
ORGANISATIONAL STRUCTURE
RELX PLC is a publicly held entity with its shares listed on the London, Amsterdam and New York stock exchanges.
Trading on the New York Stock Exchange is in the form of American Depositary Shares (“ADSs”) evidenced by American Depositary Receipts (“ADRs”) issued by Citibank N.A., as depositary.
Subsidiaries, Associates, Joint Ventures and Business Units
A list of subsidiaries, associates, joint ventures and business units is included as Exhibit 8.0 to this Annual Report on Form 20-F.
HISTORY AND DEVELOPMENT
Introduction
RELX PLC was originally incorporated in 1903. In 1993, RELX PLC combined with RELX NV by contributing their respective businesses into two jointly owned companies. In 2015, the structure was simplified so that all of the businesses were owned by one jointly controlled company, RELX Group plc. In 2018, the structure was further simplified whereby RELX NV merged into RELX PLC to form a single parent company, RELX PLC. RELX PLC owns 100% of the shares in RELX Group plc, which in turn owns all of the operating businesses, subsidiaries and financing activities of the Group.
Material acquisitions and disposals
Cash spent on acquisitions in 2021 was £262 million, in 2022 was £460 million and in 2023 was £132 million, excluding borrowings in acquired businesses of nil in 2021, £3 million in 2022 and nil in 2023, and including deferred consideration of £19 million in 2021, £21 million in 2022 and £16 million in 2023 on past acquisitions and investments in joint ventures and associates and venture capital investments of £8 million in 2021, £66 million in 2022 and £8 million in 2023.
Net cash inflow from disposals after timing differences and separation and transaction costs was £190 million in 2021, £3 million in 2022 and £12 million in 2023.
Capital expenditure
Capital expenditure on property, plant, equipment and internally developed intangible assets principally relates to the development of electronic products and investment in systems infrastructure, computer equipment and office facilities. Total such capital expenditure, which was financed using cash flows generated from operations, amounted to £337 million, £436 million and £477 million in 2021, 2022 and 2023, respectively. The majority of capital expenditure is incurred in the United States, the United Kingdom and the Netherlands. In 2023, there was continued investment in new products and related infrastructure. Further information on capital expenditure is included in notes 2, 14 and 16 to the consolidated financial statements under the headings ‘Revenue, operating profit and segment analysis’, ‘Intangible assets’ and ‘Property, plant and equipment’ on pages 172, 190 and 193 respectively of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
13
Principal executive offices
The principal executive office of RELX PLC is located at 1-3 Strand, London WC2N 5JR, England. Tel: +44 20 7166 5500. The principal executive office of RELX PLC located in the United States is at 230 Park Avenue, New York, New York, 10169. Tel: +1 212 309 8100. Our internet address is www.relx.com. The information on our website is not incorporated by reference into this Annual Report on Form 20-F.
Our agent in the United States is Kenneth Thompson II, Corporate General Counsel, RELX; kenneth.thompson@relx.com, 9443 Springboro Pike, B4/F5/S14, Miamisburg, Ohio, 45342.
PROPERTY, PLANT AND EQUIPMENT
We own or lease approximately 185 properties around the world as at December 31, 2023. The table below identifies the principal owned and leased properties in our property portfolio as at December 31, 2023.
|
|
|
|
|
Floor space |
|
Location |
|
Principal use(s) |
|
(square feet) |
|
Owned properties |
|
|
|
|
|
Alpharetta, Georgia |
|
Office and data centre |
|
406,000 |
|
Leased properties |
|
|
|
|
|
Miamisburg, Ohio |
|
Office and data centre |
|
267,480 |
|
Sutton, England |
|
Office |
|
191,960 |
|
Amsterdam, Netherlands |
|
Office |
|
133,474 |
|
Raleigh, North Carolina |
|
Office |
|
120,000 |
|
Horsham, Pennslyvania |
|
Office |
|
120,000 |
|
New York, New York |
|
Office |
|
116,541 |
All of the above properties are substantially occupied by RELX.
No property owned or leased by us which is considered material to us taken as a whole is currently subject to liabilities relating to environmental regulations and none has major encumbrances.
INTELLECTUAL PROPERTY
Our products and services include and utilise intellectual property content delivered through a variety of media, including online, journals and books. We rely on trademark, copyright, patent, trade secret and other intellectual property laws, as well as in some cases licensing arrangements with third parties, to establish and protect our proprietary rights in these products and services.
14
GOVERNMENT REGULATION
Certain of our businesses provide authorised customers with products and services such as access to public records and other information on individuals. Our businesses that provide such products and services are subject to increasing and evolving privacy, storage and transfer of data, data protection and consumer information laws and regulations, including US federal and state laws and regulations, UK laws and regulations, EU laws and regulations and laws and regulations of the EU member states. Our compliance obligations vary, and may include, among other things, reasonable data security programmes, submissions of regulatory reports, data localisation, providing individuals with certain notices and in some instances, limiting data or correcting inaccuracies in reports available through our products. From time to time, we respond in the ordinary course to inquiries and investigations from regulators who are charged with enforcing the laws and regulations applicable to our businesses. We are also subject to the terms of consent decrees and other settlements with certain regulators in the United States. See “Item 8: Financial Information — Legal Proceedings”.
Section 219 of the US Iran Threat Reduction and Syria Human Rights Act of 2012 (“ITRA”), which added Section 13(r) to the Exchange Act, requires disclosures regarding certain activities relating to Iran or with persons designated pursuant to various US Presidential Executive Orders. These disclosures are required even where the activities, transactions or dealings were conducted in compliance with applicable law. We engage in a limited amount of activity with Iran (a) through our non-US affiliates and businesses, as well as (b) pursuant to authorisations — in the form of exemptions or licenses — issued by the US government. We anticipate that similar transactions or dealings may occur in the future. The ownership or control of our customers in Iran is often difficult to determine with certainty.
During 2023,
| ● | our Scientific, Technical Medical business published open access and subscription articles by authors from, and provided subscriptions to online products and print publications to a number of universities, hospitals and other entities, in each case including those listed below; |
| ● | our Risk business provided online subscription services and pricing reports to a number of oil, petrochemical and other companies, including those listed below; and |
| ● | our Exhibitions business provided exhibitions-related services to a number of exhibitors. |
Numerous Iranian nationals attended conferences organised by our Exhibitions and Risk business areas. Individuals located in Iran also subscribed to or purchased certain of our scientific, medical and technical publications. Many of these individuals are researchers, doctors or other professionals who have obtained subscriptions or purchased publications in their individual capacity, but who may be employed by government agencies in Iran or by hospitals, universities or other entities owned or controlled by the government of Iran. In addition, we work with authors, other contributors and journal editorial board members who are located in Iran, many of whom are employed at hospitals, universities or research institutions that are owned or controlled by the government of Iran. We also sometimes receive open access payments from authors located in Iran who pay us to make their articles publicly available. From time to time, we may employ or engage individuals in Iran to assist with transactions in Iran.
Our aggregate revenue attributable to these Iran-related activities was approximately £1.8 million during the fiscal year ended December 31, 2022 compared to £1.9 million during the fiscal year ended December 31, 2023. We do not customarily allocate net profit on a subscription-by-subscription, individual customer or country-by-country basis. However, we estimate that our net profit during the fiscal year attributable to these activities was 0.02% of our net profit reported in our income statement for the fiscal year ended December 31, 2022 compared to 0.02% for the fiscal year ended December 31, 2023.
Entities that transacted with our Scientific, Technical Medical Business Area in 2023
Ardabil University of Medical Sciences, Ferdowsi University of Mashhad, Iran University of Medical Sciences, Iran University of Science and Technology, Isfahan University of Technology, Islamic Azad University, Kermanshah University of Medical Sciences, Semnan University, Shahid Beheshti University of Medical Sciences, University of Hormozgan, University of Kurdistan, Zanjan University of Medical Sciences.
15
Entities that transacted with our Risk Business Area in 2023
Amir Kabir Petrochemical Company, Bakhtar Commercial Company, Behran Oil Company, Fanavaran Petrochemical Company, Iran Chemical Industries Investment Company, Kharg Petrochemical Company, National Petrochemical Company, Petrochemical Commercial Company, Polynar Corporation.
CLIMATE CHANGE
See the information set forth under the heading “Task Force on Climate-related Financial Disclosures” on pages 82-87 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
16
ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion does not address certain items in respect of our fiscal year ended December 31, 2021 in reliance on amendments to disclosure requirements adopted by the SEC in 2019. A discussion of our fiscal year ended December 31, 2021 may be found in “Item 5: Operating and Financial Review and Prospects” of our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on February 23, 2023.
OPERATING RESULTS
The following discussion is based on the consolidated financial statements of the Group for the two years ended December 31, 2022 and 2023 which have been prepared in accordance with IFRS as issued by the IASB.
The following discussion should be read in conjunction with, and is qualified by reference to, the consolidated financial statements on pages 166 to 211 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
The following tables analyse the Group’s revenue in each of the two years ended December 31, 2022 and 2023 by type, format and geographic market. We derive our revenue principally from subscriptions and transactional sales. Transactional sales include revenue from exhibitions. For additional information, see note 2 to the consolidated financial statements under the heading ‘Revenue, operating profit and segment analysis’ on pages 172 to 175 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
Revenue by type
Year ended December 31,
|
|
|
2022 |
|
2023 |
|
||||||
|
|
|
(in millions, except percentages) |
|
||||||||
|
Subscriptions |
|
£ |
4,655 |
|
54 |
% |
£ |
4,976 |
|
54 |
% |
|
Transactional |
|
|
3,898 |
|
46 |
|
|
4,185 |
|
46 |
|
|
Total |
|
£ |
8,553 |
|
100 |
% |
£ |
9,161 |
|
100 |
% |
Revenue by format
Year ended December 31,
|
|
|
2022 |
|
2023 |
|
||||||
|
|
|
(in millions, except percentages) |
|||||||||
|
Electronic |
|
£ |
7,112 |
|
83 |
% |
£ |
7,625 |
|
83 |
% |
|
Face-to-face |
|
|
912 |
|
11 |
|
|
1,060 |
|
12 |
|
|
|
|
|
529 |
|
6 |
|
|
476 |
|
5 |
|
|
Total |
|
£ |
8,553 |
|
100 |
% |
£ |
9,161 |
|
100 |
% |
Revenue by geographic market
Year ended December 31,
|
|
|
2022 |
|
2023 |
|
||||||
|
|
|
(in millions, except percentages) |
|
||||||||
|
North America |
|
£ |
5,101 |
|
60 |
% |
£ |
5,386 |
|
59 |
% |
|
Europe |
|
|
1,800 |
|
21 |
|
|
1,908 |
|
21 |
|
|
Rest of world |
|
|
1,652 |
|
19 |
|
|
1,867 |
|
20 |
|
|
Total |
|
£ |
8,553 |
|
100 |
% |
£ |
9,161 |
|
100 |
% |
The cost profile of individual businesses within the Group varies and costs are controlled on an individual business unit basis. Our most significant cost item is staff costs. Staff costs, excluding cost of contractors and employer costs of benefits provided to employees but including amounts that are capitalised, increased from £2,906 million in 2022 to £3,108 million in 2023.
17
The following tables show revenue and adjusted operating profit for each of our business segments in each of the two years ended December 31, 2022 and 2023 together with the percentage change in 2022 and 2023 at both actual and constant currencies. We also show reported operating profit for the Group in each of the two years ended December 31, 2022 and 2023 together with the percentage change in 2022 and 2023 at actual currency. The effect of currency movements on the 2023 results is further described separately below (see “— Effect of Currency Translation” on page 24). Adjusted operating profit is included on the basis that it is the key segmental profit measure used by management to evaluate performance and allocate resources to the business segments, as reported under IFRS 8 — ‘Operating Segments’ in note 2 to the consolidated financial statements under the heading ‘Revenue, operating profit and segment analysis’ on pages 172 to 175 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2. Adjusted operating profit represents operating profit before amortisation of acquired intangible assets and acquisition-related items, and is grossed up to exclude the equity share of finance income, finance costs and taxes in joint ventures and associates. A reconciliation of reported operating profit to adjusted operating profit is set out on page 19.
Revenue by segment, reported operating profit and adjusted operating profit by segment are as follows:
|
|
|
Revenue for the year ended |
|
||||||||
|
|
|
December 31 |
|
||||||||
|
|
|
2022 |
|
2023 |
|
% change |
|
||||
|
|
|
|
|
|
|
|
|
actual |
|
constant |
|
|
|
|
|
|
|
|
|
|
rates |
|
rates (1) |
|
|
|
|
(in millions, except percentages) |
|
||||||||
|
Risk |
|
£ |
2,909 |
|
£ |
3,133 |
|
+8 |
% |
+8 |
% |
|
Scientific, Technical Medical |
|
|
2,909 |
|
|
3,062 |
|
+5 |
% |
+4 |
% |
|
Legal |
|
|
1,782 |
|
|
1,851 |
|
+4 |
% |
+5 |
% |
|
Exhibitions |
|
|
953 |
|
|
1,115 |
|
+17 |
% |
+19 |
% |
|
Total |
|
£ |
8,553 |
|
£ |
9,161 |
|
+7 |
% |
+7 |
% |
|
|
|
Reported operating profit for |
|
||||||
|
|
|
the year ended December 31 |
|
||||||
|
|
|
2022 |
|
2023 |
|
% change |
|
||
|
|
|
|
|
|
|
|
|
actual |
|
|
|
|
|
|
|
|
|
|
rates |
|
|
|
|
(in millions, except percentages) |
|
||||||
|
Reported operating profit |
|
£ |
2,323 |
|
£ |
2,682 |
|
+15 |
% |
|
|
|
Adjusted operating profit for the year ended December 31 |
|
||||||||
|
|
|
2022 |
|
2023 |
|
% change |
|
||||
|
|
|
|
|
|
|
|
|
actual |
|
constant |
|
|
|
|
|
|
|
|
|
|
rates |
|
rates (1) |
|
|
|
|
(in millions, except percentages) |
|
||||||||
|
Risk |
|
£ |
1,078 |
|
£ |
1,165 |
|
+8 |
% |
+8 |
% |
|
Scientific, Technical Medical |
|
|
1,100 |
|
|
1,165 |
|
+6 |
% |
+3 |
% |
|
Legal |
|
|
372 |
|
|
393 |
|
+6 |
% |
+7 |
% |
|
Exhibitions |
|
|
162 |
|
|
319 |
|
+97 |
% |
+105 |
% |
|
Subtotal |
|
£ |
2,712 |
|
£ |
3,042 |
|
|
|
|
|
|
Unallocated central costs and other operating items (2) |
|
|
(29) |
|
|
(12) |
|
|
|
|
|
|
Total |
|
£ |
2,683 |
|
£ |
3,030 |
|
+13 |
% |
+12 |
% |
| (1) | Represents percentage change from 2022 to 2023 using constant currency. These rates were used in the preparation of the 2022 consolidated financial statements. |
| (2) | In 2022, unallocated central costs and other operating items includes a charge of £24 million relating to STM incurred from exchange rate movements from the translation of working capital items such as accounts receivable and payable, and intercompany balances, into relevant functional currencies and the outcome of STM’s hedging program. The net effect of these amounts was higher in 2022 due to the extent and timing of exchange rate movements in the year and such amounts were insignificant in 2023. |
18
Non-GAAP financial 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 track more clearly 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 items treated as exceptional, when applicable. This provides our investors with a clear basis for assessing our ability to raise debt and invest in new business opportunities.
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.
The adjusted and underlying financial measures used in the results of operations discussion on pages 20 to 23 are: underlying revenue growth, adjusted operating profit, underlying adjusted operating profit growth, adjusted operating margin, adjusted net profit attributable to shareholders and adjusted earnings per share. These measures as well as certain other metrics are defined in the Glossary of Terms beginning on page S-1.
Underlying revenue and adjusted operating profit 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 the effects of exhibition cycling.
Adjusted operating profit excludes amortisation of acquired intangible assets and acquisition-related items, and is grossed up to exclude the equity share of finance income, finance costs and taxes in joint ventures and associates.
Adjusted operating margin is calculated as adjusted operating profit divided by revenue.
Adjusted net profit attributable to shareholders is reconciled to reported net profit attributable to shareholders and adjusted earnings per share is shown to be calculated by dividing adjusted net profit attributable to shareholders by the total weighted average number of shares in note 10 to the consolidated financial statements under the heading ‘Earnings per share’ on page 186 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2. Reconciliations of all other non-GAAP financial measures to the most directly comparable measure reported under IFRS are set forth in the tables below.
In the tables below and the results of operations commentary that follows, percentage movements are calculated using the average exchange rates for the period unless otherwise stated.
Adjusted operating profit reconciles to reported operating profit as follows:
|
|
|
2022 |
|
2023 |
||
|
|
|
(in millions) |
||||
|
Reported operating profit |
|
£ |
2,323 |
|
£ |
2,682 |
|
Adjustments: |
|
|
|
|
|
|
|
Amortisation of acquired intangible assets |
|
|
296 |
|
|
280 |
|
Acquisition-related items |
|
|
62 |
|
|
56 |
|
Reclassification of tax in joint ventures and associates |
|
|
4 |
|
|
12 |
|
Reclassification of net finance income in joint ventures and associates |
|
|
(2) |
|
|
— |
|
Adjusted operating profit |
|
£ |
2,683 |
|
£ |
3,030 |
19
The calculations of the year-on-year changes in reported revenue and underlying revenue growth are presented below:
|
|
|
Revenue |
|
||
|
|
|
£m |
|
% change |
|
|
Year to December 31, 2021 |
|
7,244 |
|
+2 |
% |
|
Underlying revenue growth (1) |
|
656 |
|
+9 |
% |
|
Exhibition cycling |
|
106 |
|
+2 |
% |
|
Acquisitions |
|
38 |
|
0 |
% |
|
Disposals |
|
(34) |
|
0 |
% |
|
Currency effects |
|
543 |
|
+7 |
% |
|
Year to December 31, 2022 |
|
8,553 |
|
+18 |
% |
|
Underlying revenue growth (1) |
|
635 |
|
+8 |
% |
|
Exhibition cycling |
|
(52) |
|
-1 |
% |
|
Acquisitions |
|
28 |
|
0 |
% |
|
Disposals |
|
(18) |
|
0 |
% |
|
Currency effects |
|
15 |
|
0 |
% |
|
Year to December 31, 2023 |
|
9,161 |
|
+7 |
% |
| (1) | Represents the year-on-year movement in reported revenue excluding the impact of the adjustments set forth in the table. |
The calculations of the year-on-year changes in adjusted operating profit and underlying adjusted operating profit growth are presented below:
|
|
|
Adjusted operating profit |
|
||
|
|
|
£m |
|
% change |
|
|
Year to December 31, 2021 |
|
2,210 |
|
+6 |
% |
|
Underlying adjusted operating profit growth (1) |
|
326 |
|
+15 |
% |
|
Acquisitions |
|
(6) |
|
0 |
% |
|
Disposals |
|
(14) |
|
-1 |
% |
|
Currency effects |
|
167 |
|
+7 |
% |
|
Year to December 31, 2022 |
|
2,683 |
|
+21 |
% |
|
Underlying adjusted operating profit growth (1) |
|
335 |
|
+13 |
% |
|
Acquisitions |
|
(8) |
|
-1 |
% |
|
Disposals |
|
(3) |
|
0 |
% |
|
Currency effects |
|
23 |
|
+1 |
% |
|
Year to December 31, 2023 |
|
3,030 |
|
+13 |
% |
| (1) | Represents the year-on-year movement in adjusted operating profit excluding the impact of the adjustments set forth in the table. |
Results of Operations for the Year Ended December 31, 2023
Compared to the Year Ended December 31, 2022
Reported revenue was up 7% from £8,553 million in 2022 to £9,161 million in 2023. Underlying revenue growth was 8%, with all four market segments contributing to underlying growth. The underlying growth rate reflects strong growth in electronic and face-to-face revenues, partially offset by continued print revenue declines. Risk continued to deliver strong growth, STM maintained its improved growth, and Legal growth continued to improve. Exhibitions saw strong growth in revenue due to higher activity levels and the lower cost structure. The impact of currency movements was broadly neutral to growth. Acquisitions and disposals together had a broadly neutral impact on revenue, while exhibition cycling effects decreased growth, giving total revenue growth at constant currency of 7%.
Reported operating costs, which comprises cost of sales, selling and distribution costs, and administration and other expenses, were up 4% from £6,249 million in 2022 to £6,525 million in 2023. Cost of sales was up 6% from £3,045 million in 2022 to £3,216 million in 2023, selling and distribution costs were up 5% from £1,385 million in 2022 to £1,459 million in 2023 and administration
20
and other expenses were up 2% from £1,819 million in 2022 to £1,850 million in 2023. The increase reflects the investment in global technology platforms, the launch of new products and services and the increased activity levels within Exhibitions, partly offset by the benefits of continued process innovation. Actions continue to be taken across the group to improve cost efficiency.
Reported operating profit, which includes amortisation of acquired intangible assets and acquisition-related items, was up 15% from £2,323 million in 2022 to £2,682 million in 2023 reflecting the increase in adjusted operating profit and a lower amortisation charge in respect of acquired intangible assets. Adjusted operating profit was up 13% from £2,683 million in 2022 to £3,030 million in 2023.
The reported operating margin was up from 27.2% in 2022 to 29.3% in 2023. The overall adjusted operating margin increased 1.7 percentage points from 31.4% in 2022 to 33.1% in 2023. On an underlying basis, including cycling effects, the margin improved by 1.7 percentage points with portfolio changes reducing margins by 0.2 percentage points and currency movements improving margins by 0.2 percentage points.
Depreciation of property, plant and equipment and amortisation of internally developed intangible assets increased from £356 million in 2022 to £373 million. Depreciation of right-of-use assets increased from £63 million in 2022 to £65 million in 2023.
The amortisation charge in respect of acquired intangible assets, including the share of amortisation in joint ventures and associates decreased from £296 million in 2022 to £280 million in 2023.
Acquisition-related costs decreased from £62 million in 2022 to £56 million in 2023, due to the lower level of acquisition activity in the year.
Reported net finance costs increased from £201 million in 2022 to £315 million in 2023 due to higher average interest rates and a charge of £26 million in respect of the early redemption of bonds that were due to be repaid in August 2027. This includes the net financing charge on defined benefit pension schemes, which decreased from £5 million in 2022 to £1 million in 2023.
Reported profit before tax was up 9% from £2,113 million in 2022 to £2,295 million in 2023 reflecting the improvement in reported operating profit, the higher interest expense, an impairment charge for some assets held for sale within Risk and a net downward valuation of the Ventures portfolio.
The reported tax charge increased from £481 million in 2022 to £507 million in 2023 including tax associated with the amortisation of acquired intangible assets, disposals and other non-operating items. The 2023 charge benefitted from non-recurring tax credits arising from the resolution of certain historical tax matters. The UK corporation tax rate increased from 19% to 25% from April 1, 2023.
The reported net profit attributable to shareholders was up 9% from £1,634 million in 2022 to £1,781 million in 2023. The adjusted net profit attributable to shareholders was up 10% from £1,961 million in 2022 to £2,156 million in 2023.
The reported earnings per share increased by 10% from 85.2p in 2022 to 94.1p in 2023. Adjusted earnings per share increased by 12% from 102.2p in 2022 to 114.0p in 2023. At constant currency, adjusted earnings per share increased by 11%.
Ordinary dividends paid to shareholders in 2022, being the 2021 final and 2022 interim dividend, amounted to £983 million. Ordinary dividends paid to shareholders in 2023, being the 2022 final and 2023 interim dividend, amounted to £1,059 million.
The final dividend proposed by the Board increased from 38.9p in 2022 to 41.8p per share in 2023. Total dividends for the year increased 8% from 54.6p in 2022 to 58.8p in 2023.
During 2023, a total of 30.9 million RELX PLC shares were repurchased at an average price of 2,588p. Total consideration for these repurchases was £800 million. A further 2 million shares were purchased by the Employee Benefit Trust. During 2023, 31 million RELX PLC shares held in treasury were cancelled. As at December 31, 2023, total shares in issue, net of shares held in treasury and shares held by the Employee Benefit Trust, amounted to 1,882 million. A further 4.6 million shares have been repurchased in 2024 as at February 14, 2024.
21
Risk: 2023 financial performance
|
|
|
2022 |
|
2023 |
|
Underlying |
|
Portfolio |
|
Currency |
|
Total |
|
|
|
|
£m |
|
£m |
|
growth |
|
changes |
|
effects |
|
growth |
|
|
Revenue |
|
2,909 |
|
3,133 |
|
+8 |
% |
0 |
% |
0 |
% |
+8 |
% |
|
Adjusted operating profit |
|
1,078 |
|
1,165 |
|
+9 |
% |
-1 |
% |
0 |
% |
+8 |
% |
Strong fundamentals continuing to drive underlying revenue growth.
Reported revenue growth was +8%. Underlying revenue growth of +8% continues to be driven by our deeply embedded analytics and decision tools across segments.
Underlying adjusted operating profit growth was +9%, with a small increase in adjusted operating margin after portfolio effects.
In Business Services, which represents around 45% of divisional revenue, growth continued to be driven by Financial Crime Compliance and digital Fraud and Identity solutions, with new sales strengthening in the second half of the year.
In Insurance, which represents just under 40% of divisional revenue, strong growth reflected the further extension of solution sets across insurance markets, continued new sales momentum, and positive market factors.
Specialised Industry Data Services, which represents just over 10% of divisional revenue, delivered strong growth, led by Commodity Intelligence and Aviation.
In Government, growth continued to be driven by the development and roll-out of analytics and decision tools.
Scientific, Technical Medical: 2023 financial performance
|
|
|
2022 |
|
2023 |
|
Underlying |
|
Portfolio |
|
Currency |
|
Total |
|
|
|
|
£m |
|
£m |
|
growth |
|
changes |
|
effects |
|
growth |
|
|
Revenue |
|
2,909 |
|
3,062 |
|
+4 |
% |
0 |
% |
+1 |
% |
+5 |
% |
|
Adjusted operating profit |
|
1,100 |
|
1,165 |
|
+4 |
% |
-1 |
% |
+3 |
% |
+6 |
% |
Further development of analytics continuing to drive underlying revenue growth.
Reported revenue growth was +5%. Underlying revenue growth of +4% continues to be driven by the evolution of the business mix, with higher growth segments representing an increasing proportion of divisional revenue.
Underlying adjusted operating profit growth was +4%, with a small increase in adjusted operating margin after portfolio changes and currency effects.
Databases, Tools Electronic Reference and Corporate Primary Research, which together represent around 45% of divisional revenue, continued to deliver strong growth, driven by content development and further evolution of higher value-add analytics and decision tools.
Primary Research Academic Government segments, which also represent around 45% of divisional revenue, continue to be driven by volume growth. Article submissions returned to strong growth, with pay-to-publish open access articles continuing to grow particularly strongly.
22
Legal: 2023 financial performance
|
|
|
2022 |
|
2023 |
|
Underlying |
|
Portfolio |
|
Currency |
|
Total |
|
|
|
|
£m |
|
£m |
|
growth |
|
changes |
|
effects |
|
growth |
|
|
Revenue |
|
1,782 |
|
1,851 |
|
+6 |
% |
-1 |
% |
-1 |
% |
+4 |
% |
|
Adjusted operating profit |
|
372 |
|
393 |
|
+8 |
% |
-1 |
% |
-1 |
% |
+6 |
% |
Further improvement in underlying revenue growth driven by legal analytics.
Reported revenue growth was +4%. Underlying revenue growth improved to +6%, driven by the continuing shift in business mix towards higher growth legal analytics.
Underlying adjusted operating profit growth was +8%, with underlying cost growth below underlying revenue growth, leading to a continued improvement in adjusted operating margin.
Law Firms Corporate Legal markets, which account for over 60% of divisional revenue, saw strong growth. Lexis+, our integrated platform with leading analytics based on extractive AI functionality, continues to see increasing customer adoption and usage across markets. In October, we announced the commercial launch of Lexis+ AI, our new platform leveraging generative AI functionality. Initial customer reaction has been positive, and the roll-out has started well.
Government Academic, which accounts for around 20% of divisional revenue, and News Business, which accounts for just under 10% of divisional revenue, both delivered good growth.
Renewals and new sales remain strong across all key segments.
Exhibitions: 2023 financial performance
|
|
|
2022 |
|
2023 |
|
Underlying |
|
Portfolio |
|
Currency |
|
Total |
|
|
|
|
£m |
|
£m |
|
growth |
|
changes |
|
effects |
|
growth |
|
|
Revenue (1) |
|
953 |
|
1,115 |
|
+30 |
% |
-11 |
% |
-2 |
% |
+17 |
% |
|
Adjusted operating profit |
|
162 |
|
319 |
|
+100 |
% |
+5 |
% |
-8 |
% |
+97 |
% |
| (1) | Portfolio changes includes cycling effects of -11% |
Strong underlying revenue growth and profitability improvement.
Reported revenue growth was +17%. Strong underlying revenue growth was driven by a significant increase in face-to-face activity across geographies, with average like-for-like event revenue across the portfolio ahead of pre-pandemic levels.
We continue to make good progress on digital initiatives, with increased usage of a growing range of value enhancing digital tools for the customers of our face-to-face events.
The improvement in profitability reflects the higher activity levels and the structurally lower cost base of the streamlined event portfolio, with the adjusted operating margin now above pre-pandemic levels.
Critical Accounting Policies
The accounting policies of the Group under IFRS as issued by the IASB are described within the relevant notes to the consolidated financial statements as set forth on pages 171 to 211 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2. The most critical accounting policies and estimates used in determining the financial condition and results of the Group, and those requiring the most subjective or complex judgments, relate to capitalisation of development spend and accounting for defined benefit pension obligations.
The Audit Committee of RELX PLC has reviewed the development and selection of critical accounting estimates, and the disclosure of critical accounting policies in the financial statements.
23
Effect of Currency Translation
The consolidated financial statements are expressed in sterling and are therefore subject to the impact of movements in exchange rates on the translation of the financial information of individual businesses whose operational currencies are other than sterling. The principal exposures in relation to the results reported in sterling are to the US dollar and the euro, reflecting our business exposure to the United States and the European Economic and Monetary Union, our most important markets. Some of these exposures are offset by denominating debt in US dollars and euros.
Individual businesses are subject to foreign exchange transaction exposures caused by the effect of exchange rate movements on their revenue and operating costs, to the extent that such revenue and costs are not denominated in their functional currencies. Individual businesses generally hedge their exposures at market rates through the centralised treasury department. Hedging of foreign exchange transaction exposure is the only hedging activity undertaken by the individual businesses. For further details see note 17 to the consolidated financial statements as set forth on pages 194 to 200 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
Compared to 2022, currency differences increased the Group’s revenue by £15 million in 2023. Acquired intangible asset amortisation and acquisition-related items are predominantly denominated in US dollars and, after these charges, compared to 2022, currency differences increased operating profit by £23 million from 2022 to 2023. The majority of our debt is denominated in US dollars and euros and after charging net finance costs, currency differences increased profit before tax by £21 million in 2023.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements are included in note 1 to the consolidated financial statements under the heading ‘Basis of preparation and accounting policies’ on page 171 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
Cash flows from operating activities
The Group’s cash generated from operations increased from £3,061 million in 2022 to £3,370 million in 2023. Included in these net cash inflows are cash outflows, including acquisition-related items, which decreased from £62 million in 2022 to £56 million in 2023 and Exhibitions exceptional costs charged in 2020, which decreased from £25 million in 2022 to £5 million in 2023. A substantial proportion of revenue is received through subscription and similar advanced receipts, principally for scientific and medical journals. At December 31, 2023 subscriptions and other revenues received in advance decreased from £2,368 million in 2022 to £2,297 million in 2023. The Group paid tax of £495 million in 2022 and £619 million in 2023, which was higher than the income statement charge, with the difference reflecting timing of tax payments.
Cash flows from investing activities
The Group’s cash outflow on the purchase of property, plant and equipment decreased from £36 million in 2022 to £30 million in 2023 while proceeds from the sale of property, plant and equipment increased from nil in 2022 to £7 million in 2023. The cash outflow on internally developed intangible assets increased from £400 million in 2022 to £447 million in 2023, reflecting sustained investment in new products.
During 2022, the Group paid a total of £460 million for acquisitions, excluding £3 million of borrowings in acquired businesses and including deferred consideration of £21 million on past acquisitions and investments in joint ventures and associates and venture capital investments of £66 million. During 2023, the Group paid a total of £132 million for acquisitions, excluding nil borrowings in acquired businesses and including deferred consideration of £16 million on past acquisitions and investments in joint ventures and associates and venture capital investments of £8 million.
24
Cash flows from financing activities
21.7 million shares were repurchased by RELX PLC in 2022 for total consideration of £500 million. 30.9 million shares were repurchased by RELX PLC in 2023 for total consideration of £800 million, with a further £150 million repurchased in 2024 as at February 14, 2024. In addition, the Employee Benefit Trust purchased shares of RELX PLC to meet future obligations in respect of share based remuneration totalling £50 million and £50 million in 2022 and 2023, respectively. Proceeds from the exercise of share options increased from £26 million in 2022 to £41 million in 2023.
During 2022 and 2023, the Group paid ordinary dividends totalling £983 million and £1,059 million, respectively, to shareholders of RELX PLC. Dividend payments are funded by the operating cash flow of the business after capital spend.
Debt
Debt as at December 31, 2022 and December 31, 2023 was £6,730 million and £6,497 million, respectively. Net debt, used in assessing the Group’s financial position was £6,604 million as at December 31, 2022 and £6,446 million as at December 31, 2023, comprising gross bank and bond borrowings of £6,356 million and lease liabilities under IFRS 16 of £141 million, plus £108 million of related derivative financial instrument liabilities, less cash and cash equivalents of £155 million and finance lease receivables of £4 million. The majority of our debt is denominated in US dollars and euros. Sterling was stronger against the US dollar and euro at the end of the year which decreased net debt overall when translated into sterling. Excluding currency translation effects, net debt increased by £26 million.
Net debt is reconciled as follows:
|
As at December 31 |
|
2022 |
|
2023 |
|
|
|
£m |
|
£m |
|
Cash cash equivalents |
|
334 |
|
155 |
|
Debt |
|
(6,730) |
|
(6,497) |
|
Related derivative financial instruments |
|
(213) |
|
(108) |
|
Finance lease receivables |
|
5 |
|
4 |
|
Net debt |
|
(6,604) |
|
(6,446) |
Liquidity
In June 2023, €750 million of euro denominated term debt was issued with a coupon of 3.75% and a maturity of eight years.
The Group believes that it has ample liquidity and access to debt capital markets, providing the ability to repay or refinance debt as it matures and to fund ongoing requirements. This includes access to a $3.0 billion committed bank facility which provides security of funding for short-term debt, which was undrawn at December 31, 2023. In March 2023 the maturity date of the facility was extended to April 2026.
Contractual Obligations
The contractual obligations of the Group relating to debt and leases at December 31, 2023 analysed by when payments are due, are summarised below.
|
|
|
|
|
|
Less than |
|
|
|
|
|
|
|
After 5 |
||
|
|
|
Total |
|
1 year |
|
1-3 years |
|
3-5 years |
|
years |
|||||
|
|
|
|
(in millions) |
||||||||||||
|
Short-term debt (1)(2) |
|
£ |
(1,331) |
|
£ |
(1,331) |
|
|
— |
|
|
— |
|
|
— |
|
Long-term debt (2) |
|
|
(6,130) |
|
|
(129) |
|
|
(1,588) |
|
|
(1,348) |
|
|
(3,065) |
|
Total |
|
£ |
(7,461) |
|
£ |
(1,460) |
|
£ |
(1,588) |
|
£ |
(1,348) |
|
£ |
(3,065) |
| (1) | Short-term debt primarily comprises term debt issues maturing within one year and commercial paper, and is supported by the $3.0 billion committed bank facility maturing in April 2026 and by the central management of cash and cash equivalents. At December 31, 2023 the committed bank facility was undrawn. |
25
| (2) | Short and long-term debt obligations comprise undiscounted principal and interest cash flows. Interest cash flows are calculated by reference to the contractual payment dates and the fixed interest rates (for fixed rate debt) or the relevant forecast interest rates (for floating rate debt). |
Information on retirement benefit obligations is set forth in note 6 to the consolidated financial statements under the heading ‘Pension schemes’ on pages 177 to 181 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
Off-Balance Sheet Arrangements
Except as disclosed above under “Contractual Obligations”, we have no off-balance sheet arrangements that currently have or are reasonably likely to have a material effect on RELX’s financial condition, results of operations, liquidity, capital expenditure or capital resources.
Treasury Policies
The main treasury risks faced by the Group are liquidity risk, interest rate risk, foreign currency risk and credit risk. The Board agrees overall policy guidelines for managing each of these risks. A summary of these policies is provided in note 17 to the consolidated financial statements under the heading ‘Financial Instruments’ on pages 194 to 200 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
Financial instruments are used to finance our business and to hedge transactions. We do not enter into speculative derivative transactions.
Capital and Liquidity Management
The capital structure is managed to support the Group’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, the Group seeks to maintain cash flow conversion of 90% or higher and credit rating agency metrics that are consistent with a solid investment grade credit rating.
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 our capital and liquidity management, including material cash requirements and other material commitments, is provided in note 17 to the consolidated financial statements under the heading ‘Financial Instruments’ on pages 194 to 200 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
SHORT-TERM DEBT
The Group operates a number of commercial paper programmes that provide flexibility for funding operational requirements on a daily basis, at short notice and at competitive rates. Commercial paper is issued under both US and Euro programmes and guaranteed by RELX PLC. In addition, short-term borrowing facilities are established with local banks to support the daily requirements of businesses operating in certain countries where there may be restrictions on borrowing from affiliates. Term debt in the table below consists of debt with an original maturity of greater than one year and which mature within 12 months of the reporting date. This short-term debt was backed up at December 31, 2023 by the $3.0 billion committed bank facility maturing in 2026. This facility was undrawn at December 31, 2023. The short-term debt programmes are run in conjunction with term debt programmes which comprise the majority of our debt and provide the Group with security of funding.
26
The average amount and the average interest rate during the year have been calculated by taking the average of the amounts outstanding at each month end (translated to sterling at the respective month end rate) and the average of the interest rate applicable at each month end. Commercial paper issuance reached a maximum month end level of £511 million in September 2023 following cash outflows in respect of shareholder dividends and share repurchases, and short-term loans and overdrafts reached a maximum month end level of £103 million in September 2023 as a result of movements in trading cash flows and acquisition spend. Term debt reached a maximum month end level of £1,189 million in November 2023 as the maturity of the €700 million and €500 million term debt issues both expiring in March 2024 were below 12 months and notice had been given to redeem in December 2023 the $200 million term debt issue that was due to mature in August 2027.
Lease liabilities have been excluded from the balances below.
|
|
|
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
|
|
|
Weighted |
|
|
|
|
Weighted |
|
|
|
|
|
|
average |
|
|
|
|
average |
|
|
|
2022 |
|
interest |
|
2023 |
|
interest |
||
|
Short-term debt as at December 31, |
|
(in millions) |
|
rate % |
|
(in millions) |
|
rate % |
||
|
Commercial paper |
|
£ |
— |
|
— |
|
£ |
179 |
|
5.5 |
|
Short-term loans and overdrafts |
|
|
102 |
|
7.4 |
|
|
41 |
|
5.6 |
|
Term debt |
|
|
701 |
|
5.7 |
|
|
1,036 |
|
1.9 |
|
Total short-term debt |
|
£ |
803 |
|
— |
|
£ |
1,256 |
|
— |
|
|
|
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
|
|
|
Weighted |
|
|
|
|
Weighted |
|
|
|
|
|
|
average |
|
|
|
|
average |
|
|
|
2022 |
|
interest |
|
2023 |
|
interest |
||
|
Average short-term debt during the year ended December 31, |
|
(in millions) |
|
rate % |
|
(in millions) |
|
rate % |
||
|
Commercial paper |
|
£ |
122 |
|
2.2 |
|
£ |
241 |
|
5.2 |
|
Short-term loans and overdrafts |
|
|
68 |
|
4.9 |
|
|
83 |
|
6.5 |
|
Term debt |
|
£ |
527 |
|
3.6 |
|
£ |
1,061 |
|
2.6 |
|
|
|
2022 |
|
2023 |
||
|
Maximum month end short-term debt |
|
(in millions) |
|
(in millions) |
||
|
Commercial paper |
|
£ |
345 |
|
£ |
511 |
|
Short-term loans and overdrafts |
|
|
102 |
|
|
103 |
|
Term debt |
|
£ |
737 |
|
£ |
1,189 |
TREND INFORMATION
Material trends, uncertainties and events which can affect the revenue, operating profit and liquidity and capital resources of RELX include the usage, penetration and customer renewal of our products and the prices that customers pay for our products, the migration of products to online services, investment in new products and services, cost control and the impact of our cost reduction programmes on operational efficiency, the levels of legal industry and academic library funding, the impact of economic conditions on corporate and other customer budgets, the actions of competitors and regulatory, legislative and legal developments.
Trends, uncertainties and events which could have a material impact on our revenue, operating profit and liquidity and capital resources are discussed in further detail in “Item 3: Key Information — Risk Factors”; “Item 4: Information on the Group”; and “Item 5: Operating and Financial Review and Prospects — Operating Results; Liquidity and Capital Resources”.
RESEARCH AND DEVELOPMENT
In 2022 and 2023 RELX spent £400 million and £447 million, respectively, in respect of capitalised development costs. This reflects sustained investment in new products. This expenditure was mainly incurred in the United States, the United Kingdom and the Netherlands. For additional information, see note 14 to the consolidated financial statements under the heading ‘Intangible assets’ on pages 190 to 192 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
27
ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
DIRECTORS
The information on the Directors of RELX PLC as at February 22, 2024 is set forth under the heading ‘Board Directors’ on pages 108 to 109 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
As a general rule, Non-Executive Directors serve for an initial term of three years, and are typically expected to be available to serve for a second three-year period. If invited to do so, they may also serve for a third period of three years.
The Directors of RELX PLC as at February 22, 2024 are as follows:
|
Name (Age) |
|
Function |
|
Erik Engstrom (60) |
|
Executive Director and Chief Executive Officer |
|
Nick Luff (56) |
|
Executive Director and Chief Financial Officer |
|
Paul Walker (66) |
|
Non-Executive Chair (2)(3)(4) |
|
Alistair Cox (62) |
|
Non-Executive Director (1)(2)(4) |
|
June Felix (67) |
|
Non-Executive Director (1)(2)(4) |
|
Charlotte Hogg (53) |
|
Non-Executive Director (1)(4) |
|
Robert MacLeod (59) |
|
Non-Executive Director (2)(3)(4) |
|
Marike van Lier Lels (64) |
|
Non-Executive Director (3)(4)(5) |
|
Andrew Sukawaty (68) |
|
Non-Executive Director (1)(4) |
|
Suzanne Wood (63) |
|
Non-Executive Director (1)(3)(4) |
| (1) | Member of the Audit Committee. |
| (2) | Member of the Remuneration Committee. |
| (3) | Member of the Nominations Committee. |
| (4) | Member of the Corporate Governance Committee. |
| (5) | Marike van Lier Lels will retire from the Board with effect from the conclusion of the Annual General Meeting on April 25, 2024, as announced by the Company on February 13, 2024. |
The following changes to the RELX PLC Board of Directors took place during the period from January 1, 2023 to December 31, 2023:
Wolfhart Hauser, a Non-Executive Director who held the roles of Senior Independent Director and Chair of the Remuneration Committee and was a member of the Nominations Committee and the Corporate Governance Committee, retired from the Board with effect from the conclusion of the Annual General Meeting on April 20, 2023, having served on the Board for over nine years.
Alistair Cox joined the Board as a Non-Executive Director with effect from the conclusion of the Annual General Meeting on April 20, 2023 and also joined the Audit Committee, Remuneration Committee and Corporate Governance Committee.
Suzanne Wood joined the Nominations Committee and became Senior Independent Director (for the purposes of the UK Corporate Governance Code) with effect from April 20, 2023.
Robert MacLeod became Chair of the Remuneration Committee with effect from April 20, 2023.
On December 8, 2023, RELX PLC announced the appointment of Bianca Tetteroo as a Non-Executive Director, effective July 1, 2024, subject to her election by shareholders at the Annual General Meeting on April 25, 2024.
Biographical details: Bianca Tetteroo (54)
Other appointments: Chief Executive Officer and Chair of the Executive Board of Achmea BV.
Past appointments: Served with Achmea BV for 12 years in a variety of senior executive and financial roles prior to taking up the role of Chief Executive Officer in 2021. Previously spent 13 years with the Fortis Group, working across multiple business lines including
28
banking, insurance and investments. Qualified as a Chartered Accountant at Fortis, prior to which she worked at international accountancy firm, Mazars.
Nationality: Dutch
Experience/skills: Has considerable and relevant international experience and strategic expertise for the RELX Board together with a clear appreciation of the importance of aligning business success and stakeholder interests.
Education: Holds a BSC in Information Management Accountancy from Nyenrode University.
SENIOR MANAGEMENT
The executive officers, other than Directors, at February 22, 2024 were:
Henry Udow : Chief Legal Officer and Company Secretary. A US and British citizen who is admitted to the Bar of New York State. Joined the Group in 2011. Prior to joining the Group, he was Chief Legal Officer and Company Secretary of Cadbury plc.
Rose Thomson : Chief Human Resources Officer of RELX PLC. Joined the Group in 2021. Prior to joining the Group, she was the Chief People Officer at ABRDN PLC a global investment and asset management company.
COMPENSATION
At the 2020 Annual General Meeting, a remuneration policy was approved, which is incorporated herein by reference to Exhibit 15.3. The 2023 grants were made under the multi-year incentive plans to Executive Directors under this policy.
At the 2023 Annual General Meeting, a new remuneration policy was approved, with the first awards under this new policy to be made in 2024. The new remuneration policy is set out on pages 142 to 148 of the RELX Annual Report and Financial Statements 2023 and is incorporated herein by reference to Exhibit 15.2.
The policy relating to payment for loss of office of Executive Directors and Non-Executive Directors is set out on pages 146 to 147 of Exhibit 15.2 of this Annual Report on Form 20-F and is incorporated herein by reference.
Compensation of Executive Officers
The aggregate compensation (salary, annual incentive, benefits, pension, cash allowance in lieu of pension and dividend equivalents received in respect of shares vested during 2023) paid during 2023 (and in respect of the annual incentive earned in respect of 2023) to those who were executive officers (other than Directors) of RELX during the year ended December 31, 2023 was £3,240,326 which included contributions made to the pension plans in respect of such officers of £16,727.
The executive officers participate in an annual incentive plan (“AIP”) which is based on financial targets and individual key performance objectives measured over a one-year period. The resulting AIP payout comprises a cash payout in March following the end of the relevant financial year (2/3rds) and deferred shares (1/3rd) which are released to participants after three years. The 2023 aggregate compensation for executive officers includes both the cash and the deferred share elements of the 2023 AIP.
In 2023, we also granted conditional share awards to the executive officers under the LTIP 2013 (as defined below) (see “— Share Ownership — Share Ownership by Directors and Executive Officers” below).
ANNUAL REMUNERATION REPORT
The Annual Remuneration Report is set out on pages 130 to 141 of the RELX Annual Report and Financial Statements 2023 and is incorporated herein by reference to Exhibit 15.2.
29
SHARE OWNERSHIP
Executive Directors’ Multi-Year Incentive Interests
This information is set forth under the heading ‘Multi-year incentive interests’ on pages 136 to 137 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
Equity-Based Plans
As of December 31, 2023, we operated and/or had awards outstanding under a number of equity-based plans as follows:
|
(i) |
All-Employee Equity-Based Plans |
The following four plans are local all-employee equity based plans:
|
(a) |
UK SAYE Share Option Scheme (“SAYE Scheme 2013”) and ShareSave 2023 |
Options over RELX PLC ordinary shares have been granted under the SAYE Scheme. Shares may be acquired at the exercise price, which is not less than the higher of (i) 80% of the closing market price for the relevant share on The London Stock Exchange three dealing days before invitations to apply for options are issued, and (ii) if new shares are to be subscribed, their nominal value.
All UK employees of RELX Group plc and participating companies under its control in employment at the date of invitation are eligible to participate in the SAYE Scheme. In addition, the Directors of RELX Group plc may permit other employees of RELX Group plc and participating companies under its control to participate.
Participants can save between £10 and £500 per month for a period of three or five years. During a period of six months following the end of the period, the participant can use his/her savings to buy shares at the exercise price. However, options may be exercised earlier than the normal exercise date in certain specified circumstances, including death, or on ceasing employment on account of injury, disability, redundancy, or upon retirement under our self-standing retirement policy for the SAYE Scheme or the sale of the business or subsidiary for which the participant works, or provided the option has been held for at least three years. Exercise is allowed in the event of an amalgamation, reconstruction or take-over of the company whose shares are under option; alternatively, such options may, with the agreement of an acquiring company or a company associated with it, be exchanged for options over shares in the acquiring company or that associated company. Options may also be exercised in the event of the voluntary winding-up of the company whose shares are under option. In the event that options are exercised before the normal exercise date, the participant may acquire only the number of shares that can be purchased with the accumulated savings up to the date of exercise, plus interest (if any).
As the plan was expiring, a replacement plan, ShareSave 2023, was approved at the 2023 AGM on the same terms as above. Awards were made under this plan in 2023, for a savings period of three years.
The Executive Directors have waived their right to participate in the SAYE Scheme 2013 and ShareSave 2023.
|
(b) |
Netherlands Convertible Debenture Stock Arrangements |
Subscriptions under this scheme ceased in 2017, but there are still option (formerly conversion) rights outstanding under this scheme. This facility consisted of an annual issue of a convertible debenture loan that was open for subscription by staff employed by our companies in the Netherlands or temporarily seconded to affiliates abroad. These convertible debenture loans had a term of 10 years and accrued interest on a quarterly basis, payable in arrears after the end of each year. During the 10-year term of the loan, employees could decide to convert their claim into RELX PLC shares at an exercise (conversion) price equal to the share price on Euronext Amsterdam on the last dealing day of the month in which the employee subscribed for the loan (the exercise price). All remaining debenture loans, together with accrued interest up to the payment date, were repaid to bond holders in November 2019. When the loans were repaid, subsisting conversion rights became standalone option rights on substantially the same terms, with no change to the relevant exercise price and 10-year exercise (conversion) period.
30
The Executive Directors were not eligible to participate in this scheme.
|
(c) |
Dutch Share Purchase Plan (“DSPP”) |
All employees of RELX Nederland BV and participating companies under its control who are neither in their probation period nor under notice at the date of invitation and who are in receipt of salary via a Dutch payroll are entitled to participate in the DSPP. Each cycle of the DSPP operates on a standalone basis and eligibility is assessed for each cycle that is offered. The 2023 cycle of the DSPP launched in February 2023 and completed in December 2023.
Participating employees make monthly contributions out of net salary which are used to purchase RELX PLC shares, listed on Euronext Amsterdam (investment shares). Minimum and maximum annual contribution amounts apply to each cycle. In 2023, the minimum annual contribution amount was €250 and the maximum annual contribution amount was €6,000. At the end of the 2023 DSPP cycle, participants who were still in RELX employment, and who had not sold any of the investment shares purchased during the year, received matching shares from RELX equal to 20% of the investment shares purchased during 2023. Investment shares acquired under the DSPP accrue normal RELX dividends which are automatically reinvested into additional RELX PLC shares.
The Executive Directors are not eligible to participate in the DSPP.
|
(d) |
Employee Share Purchase Plan 2023 (“ESPP 2023”) |
At the 2023 AGM, approval was sought for a new all employee plan in the US, the Employee Share Purchase Plan 2023 (“ESPP 2023”). The ESPP 2023 offers eligible US employees the opportunity to acquire RELX American Depositary Receipts (ADRs) at a discount. The ESPP 2023 is designed to comply with section 423 (b) of the US Internal Revenue Code of 1986. Employees of participating US subsidiaries of RELX PLC are eligible to participate. Participation may exclude certain employees, within the limits of the IRS Code, based on their period of continuous employment, weekly or annual hours or if they are highly compensated.
Minimum and maximum annual contribution amounts apply to each cycle. For the first award, the minimum annual contribution amount will be $300 and the maximum $6,000. The upper limit in the ESPP rules is the IRS Code limit, currently $25,000 per year. The award is made in the form of an option to acquire ADRs at a fixed price which may be set at a discount (of up to 15%) to the market value of the ADRs at the date of grant or exercise. At the end of the contribution period, the options will be exercised unless the employee chooses to withdraw.
The Executive Directors are not eligible to participate in the ESPP 2023.
|
(ii) |
Executive Equity-Based Plans |
Our executive equity-based plans comprise:
|
(a) |
Long-term incentive plan 2013 (“LTIP 2013”) |
The LTIP 2013 applies to senior executives (including executive officers and the Executive Directors). Awards may be granted as performance share awards or nil-cost options but it is currently intended to only grant performance share awards. Awards vest subject to performance measured over three financial years. Awards may be satisfied with new issue shares, a transfer of treasury shares or shares purchased in the market, but it is currently intended to continue the existing practice of satisfying awards with shares purchased in the market. The performance measures and targets applicable to awards granted in 2023 under this plan are detailed in the table below. The vesting of awards is also subject to participants meeting a minimum shareholding requirement and continued employment (except for certain categories of approved leavers). Dividend equivalents accrue over the performance period and are paid out in cash at the end to the extent that the awards vest. Further, shares vested from awards granted to the Executive Directors in 2016 and 2017 are subject to a further six months holding period post vesting which has been increased to two years for shares vested from awards granted to the Executive Directors from 2018 onwards.
31
LTIP: 2023-2025 cycle
Vesting is dependent on three separate performance measures: a total shareholder return (“TSR”) measure (comprising three comparator groups), an EPS measure and a return on invested capital (“ROIC”) measure, weighted 20%:40%:40% respectively and assessed independently. (1)
|
Vesting percentage of each third |
|
TSR ranking within the relevant |
|
of the TSR tranche(2) |
|
TSR comparator group |
|
0% |
|
below median |
|
25% |
|
median |
|
100% |
|
upper quartile |
| (1) | The calculation methodology for TSR, EPS and ROIC is set out in the 2013 Notice of Annual General Meeting, which can be found on our website, www.relx.com . The information on our website is not incorporated by reference into this Annual Report on Form 20-F. |
Each comparator group comprises around 50 companies. The companies for the 2023-25 LTIP cycle were selected on the same basis as the comparator groups for prior cycles under this plan.
| (2) | Vesting is on a straight-line basis for performance between the minimum and maximum levels. |
|
|
|
Average growth in adjusted |
|
|
|
Vesting percentage of EPS |
|
EPS over the three-year |
|
ROIC in the third year of |
|
and ROIC tranches* |
|
performance period |
|
the performance period |
|
0% |
|
below 5% p.a. |
|
below 11.0% |
|
25% |
|
5% p.a. |
|
11.0% |
|
50% |
|
6% p.a. |
|
11.5% |
|
65% |
|
7% p.a. |
|
12.0% |
|
75% |
|
8% p.a. |
|
12.5% |
|
85% |
|
9% p.a. |
|
13.0% |
|
92.5% |
|
10% p.a. |
|
13.5% |
|
100% |
|
11% p.a. or above |
|
14.0% or above |
* Vesting is on a straight-line basis for performance between the stated average adjusted EPS growth/ROIC percentages.
|
(b) |
Executive Share Option Scheme 2013 (“ESOS 2013”) |
The ESOS 2013 applies to around 1,000 executives. Market value options are granted which vest (subject to performance in the case of Executive Directors) after three years and remain exercisable, subject to continued employment, until the tenth anniversary of grant. Options may be satisfied with new issue shares, a transfer of treasury shares or shares purchased in the market, but it is currently intended to continue the existing practice of satisfying options with new issue shares.
No grants under ESOS 2013 were made to Executive Directors in 2023. Vested awards held by the executives and Directors remain exercisable, as applicable.
|
(c) |
Retention Share Plan (“RSP”) and Restricted Share Plan (“RSP 2014”) |
The RSP was used to facilitate the grant of one-off awards of restricted shares, where appropriate, to senior new hires for example, to buy out share-based awards from previous employment. The restricted shares which have been awarded will be satisfied by shares purchased in the market and Executive Directors are not eligible to participate. In 2014, the RSP 2014 replaced the RSP for the type of awards described above.
Since 2006, employees eligible to participate in the ESOS 2013 (see (b) above), other than Executive Directors, have been able to choose prior to the date of grant whether to receive all or part of their grant in the form of restricted shares based on a pre-determined conversion ratio of one share for every five options that would otherwise be granted to them under ESOS. The RSP is the vehicle used to deliver the award of such restricted shares. The restricted shares vest after the expiry of three years from the date of
32
grant, subject to the participant remaining employed by us or a participating company under our control. The restricted shares awarded are satisfied by shares purchased in the market.
|
(d) |
Long-term incentive plan (“LTIP 2023”) |
The rules of the LTIP 2013 expired at the 2023 AGM. Shareholder approved new rules for a replacement plan at the 2023 AGM on substantially the same terms. The LTIP 2023 applies to senior executives (including executive officers and the Executive Directors). Awards are granted as a right to receive shares without payment, which normally vest subject to performance measured over three financial years. Awards may be satisfied with new issue shares, a transfer of treasury shares or shares purchased in the market, but it is currently intended to continue the existing practice of satisfying awards with shares purchased in the market. The vesting of awards is also subject to participants meeting a minimum shareholding requirement and continued employment (except for certain categories of approved leavers). Dividend equivalents accrue over the performance period and are paid out in cash at the end to the extent that the awards vest. Shares vested from awards granted to the Executive Directors are subject to a further two years holding period post vesting.
The first awards under this plan were granted after the 2023 AGM.
|
(e) |
Executive Share Ownership Scheme (“ESOS 2023”) |
This plan effectively replaces and combines the ESOS 2013 and RSP 2014 under a single plan. Under ESOS 2023, eligible employees may be granted options (at market value or nil cost) over RELX PLC ordinary shares or ADRs. Awards may also be granted as a right to receive shares without payment. The normal vesting period will be three years. Market value options remain exercisable, subject to continued employment, until the tenth anniversary of grant. Awards may be satisfied with new issue shares, a transfer of treasury shares or shares purchased in the market, but it is currently intended to continue the existing practice of satisfying options with new issue shares and share awards with market purchased shares.
Executive Directors are not eligible to receive awards under the ESOS 2023 except in exceptional circumstances and subject to the applicable remuneration policy (for example, on recruitment, to satisfy buy-out of awards forfeited from a previous employer).
The first awards under this plan were granted after the 2023 AGM.
Share Options and Conditional Share Awards
At February 14, 2024 the total number of shares subject to outstanding options was:
|
|
|
Number of |
|
|
|
|
|
|
|
|
outstanding |
|
Options over |
|
Option price |
|
|
|
|
options |
|
shares |
|
range |
|
|
UK SAYE Scheme |
|
2,022,831 |
|
RELX PLC |
|
£ |
13.168-19.76 |
|
Netherlands Convertible Debenture Stock Scheme |
|
377,548 |
|
RELX PLC |
|
€ |
13.735 -19.39 |
|
ESPP |
|
303,806 |
|
RELX PLC |
|
$ |
33.473 |
|
ESOS |
|
6,972,418 |
|
RELX PLC |
|
£ |
9.245-26.05 |
|
|
|
1,201,098 |
|
RELX PLC |
|
€ |
10.286-17.785 |
Share options are expected, upon exercise, to be met by the issue of new ordinary shares.
At February 14, 2024 the following conditional share awards were also outstanding:
|
|
|
Number of |
|
|
|
|
|
outstanding |
|
Awards over |
|
|
|
awards |
|
shares in |
|
LTIP |
|
5,645,491 |
|
RELX PLC |
|
RSP |
|
1,029,941 |
|
RELX PLC |
33
Share Ownership by Directors and Executive Officers
The interests of those individuals who were Directors of RELX PLC as at December 31, 2023 in the issued share capital of RELX PLC at the beginning and end of the year are shown under the heading ‘Statement of Directors’ shareholdings and other share interests’ on page 135 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
The interests of the current Executive Directors of RELX PLC in the issued share capital of RELX PLC as at February 21, 2024 were:
|
|
|
Interest in |
|
|
|
RELX |
|
|
|
PLC shares |
|
Erik Engstrom |
|
1,175,520 |
|
Nick Luff |
|
286,267 |
|
* |
Comprises ordinary shares and ADRs. |
The following table indicates the total aggregate number of RELX PLC securities beneficially owned (comprising ordinary shares and ADRs) and the total aggregate number of share options (comprising ordinary shares only) and conditional share awards (comprising ordinary shares and ADRs) held by the executive officers (other than Directors) of the Company in office as of February 14, 2024:
|
|
|
|
|
RELX |
|
RELX |
|
|
|
|
|
|
|
PLC £ |
|
PLC € |
|
RELX |
|
|
|
|
|
ordinary |
|
ordinary |
|
PLC |
|
|
|
|
|
shares |
|
shares |
|
conditional |
|
|
|
RELX PLC |
|
subject to |
|
subject to |
|
share |
|
|
|
shares |
|
options |
|
options |
|
awards |
|
Executive officers (other than Directors) |
|
631,777 |
|
33,595 |
|
33,957 |
|
315,631 |
The options over RELX PLC pound sterling denominated ordinary shares included in the above table are exercisable at prices ranging from £11.52 to £19.766 per share between the 3rd anniversary of their respective grant date and 2027 (except for SAYE options which will be exercisable for six months from the respective maturity date). The options over RELX PLC Euro denominated ordinary shares included in the above table are exercisable at prices ranging from €15.003 to €16.7225 per share between the 3rd anniversary of their respective grant date and 2027. The RELX PLC conditional share awards included in the above table will vest between 2024 and 2026.
In 2023, we granted a total of 96,251 conditional share awards to the executive officers under the LTIP 2013 (which is described above under “Executive Equity-Based Plans”).
34
BOARD PRACTICES
The Board currently consists of two Executive Directors and eight Non-Executive Directors. Persons nominated by the Nominations Committee will be required to be approved by the Board, prior to appointment to the Board. A copy of the terms of reference of the Nominations Committee is available on request and can be viewed on our website, www.relx.com. The information on our website is not incorporated by reference into this Annual Report on Form 20-F.
Notwithstanding the provisions outlined above in relation to the appointment to the Board, shareholders retain their rights under RELX PLC’s articles of association to appoint Directors to the Board by ordinary resolution. Shareholders may also, by ordinary resolution, remove a Director from the Board.
The Board has also established the following Committees:
| — | Audit — currently comprising five independent Non-Executive Directors; |
| — | Corporate Governance — currently comprising all Non-Executive Directors; |
| — | Nominations — currently comprising four Non-Executive Directors including the Chair of the Board; and |
| — | Remuneration — currently comprising four Non-Executive Directors including the Chair of the Board, which is responsible for determining the remuneration policy (subject to shareholders approval) and monitoring and deciding its implementation for the Executive Directors and the Chair, and approving the remuneration for senior executives below Board level. |
For additional information regarding the Board membership positions and executive officer positions within the Group, see “Directors” on page 28 and “Senior Management” on page 29. Details of the membership of the Audit Committee and details of the membership of the Remuneration Committee are given under “Directors” on page 28.
Under the articles of association of RELX PLC, one-third of the Directors shall retire from office and, if they wish, make themselves available for re-election by shareholders at the Annual General Meeting. Notwithstanding these provisions in the articles of association, in accordance with the provisions of the UK Corporate Governance Code all Directors normally retire and, unless they are standing down, will offer themselves for re-election/election at each Annual General Meeting.
The main roles and responsibilities of the Remuneration Committee are set out in written terms of reference and include:
| (i) | to determine the remuneration policy and monitor and decide its implementation, subject to and in accordance with applicable law, for the executive directors and senior management of RELX PLC; |
| (ii) | to review the ongoing appropriateness and relevance of the remuneration policy and in particular the performance-related elements and their compatibility with risk policies and systems ; |
| (iii) | to review and recommend amendments to the rules of all share based incentive plans and, where appropriate, to formulate suitable performance conditions for share based awards and options ; |
| (iv) | t o have due regard in the performance of its duties to any published corporate governance guidelines, codes or recommendations regarding the remuneration of directors of listed companies and formation and operation of share schemes which the Committee considers relevant or appropriate including but not limited to the UK Corporate Governance Code ; |
| (v) | to assist in maintaining an open and ongoing dialogue with institutional investors on major remuneration policy issues ; and |
| (vi) | to review workforce remuneration and related policies, and the alignment of incentives and rewards with culture, and take these into account when setting the remuneration policy for executive directors . |
The Remuneration Committee Chair reports formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities and the Committee has due regard that prevailing requirements and best practice regarding disclosure of all information are met and produces an annual report of RELX’s remuneration policy and practices which forms part of RELX’s Annual Report and Financial Statements.
35
The terms of reference for the Remuneration Committee are reviewed annually and a copy is published on our website, www.relx.com. The information on our website is not incorporated by reference into this Annual Report on Form 20-F.
EMPLOYEES
The number of people employed is disclosed in note 5 to the consolidated financial statements under the heading ‘Personnel’ on page 176 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
The Board of RELX PLC is fully committed to the concept of employee involvement and participation, and encourages each of its business areas to formulate its own tailor-made approach with the co-operation of employees. We are an equal opportunity employer, and recruit and promote employees on the basis of suitability for the job. Appropriate training and development opportunities are available to all employees. RELX has adopted a code of ethics and business conduct applicable to all employees within the Group.
36
ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
MAJOR SHAREHOLDERS
As at February 22, 2024, we had been notified by the following shareholders that they held an interest of 3% or more in voting rights (1) of the issued share capital of RELX PLC. The number of shares and percentage interests stated below are as disclosed at the date on which the interests were notified to us:
|
|
|
Number of |
|
|
|
Identity of Person or Group (2) |
|
Shares |
|
% of Class |
|
BlackRock, Inc |
|
186,631,180 |
|
9.67 |
|
Invesco Limited |
|
52,329,893 |
|
4.99 |
| (1) | Under the UK Disclosure and Transparency Rules, subject to certain limited exceptions, persons or groups with an interest of 3% or more in voting rights of the issued ordinary share capital are required to notify RELX PLC, and the UK Financial Conduct Authority of their interest. Shares held in treasury, which do not carry voting rights, are disclosed in “Item 10: Additional Information”. |
| (2) | Under the UK Large and Medium-sized Companies and Groups (Financial Statements and Reports) Regulations 2008, RELX PLC is required to disclose information it is aware of regarding the identity of each person with a significant direct or indirect holding of securities in RELX PLC as at the financial year end. |
As far as RELX PLC is aware, except as disclosed herein, it is neither directly or indirectly owned nor controlled by one or more corporations or by any government.
There were no material or unusual transactions between RELX and any of the entities listed above.
At December 31, 2023, there were 73 ordinary shareholders with a registered address in the United States, holding 70,377,956 ordinary shares of RELX PLC, representing 3.69% of the total number of ordinary shares issued. This includes Citibank N.A., depositary for RELX PLC’s ADR programme, which held 70,287,860 ordinary shares of RELX PLC, representing 3.69% of the total number of ordinary shares issued. At December 31, 2023, there were 161 registered ADR holders (holding together 47,369 ADRs), who all have a registered address in the United States, representing less than 0.01% of the total number of ordinary shares issued.
RELX PLC is not aware of any arrangements the operation of which may at a subsequent date result in a change in control of RELX PLC. The major shareholders of RELX PLC do not have different voting rights to other ordinary shareholders.
RELATED PARTY TRANSACTIONS
Transactions with joint ventures and key management personnel, comprising the Executive and Non-Executive Directors of RELX PLC, are set out in note 25 to the consolidated financial statements under the heading ‘Related party transactions’ on page 206 of the RELX Annual Report and Financial Statements 2023 and is incorporated herein by reference to Exhibit 15.2.
Further details of remuneration of key management personnel are set out in “Item 6: Directors, Senior Management and Employees”.
37
ITEM 8: FINANCIAL INFORMATION
FINANCIAL STATEMENTS
See “Item 18: Financial Statements”, incorporated herein by reference.
DIVIDEND POLICY
The dividend policy of RELX PLC is, over the longer term, to grow dividends broadly in line with adjusted earnings per share paying out approximately half of adjusted earnings in dividend each year.
LEGAL PROCEEDINGS
Various of RELX PLC’s subsidiaries operating in the United States have been the subject of regulatory actions and legal proceedings relating to alleged non-compliance with privacy, data protection and consumer protection laws and regulations regarding the obtaining and disclosure by such subsidiaries of personal information of the individuals involved, as well as historic data security incidents, pursuant to which unauthorised persons were alleged to have obtained personal information from our databases. These types of actions and investigations are generally settled, with the substantial portion of any cash payments agreed to be paid by these subsidiaries being reimbursed by insurance and third-party indemnities. The regulatory settlements generally require comprehensive data security programmes, submissions of regulatory reports and on-going monitoring by independent third parties to ensure our compliance with the terms of those settlements. While the costs of such compliance and on-going monitoring will be borne by us, neither the costs of compliance nor the costs of such on-going monitoring are expected to have a material adverse effect on our financial position or the results of our operations.
Various of RELX PLC’s subsidiaries offer products that require that we meet certain obligations in connection with the disclosure of information. Certain of these laws further provide for statutory penalties and attorneys’ fees for non-compliance. In the normal course of its business, Risk deals with individual and class action lawsuits claiming violation of one or more of these statutes. Other than pending matters, to date, these cases have either been settled or successfully defended with a substantial portion of cash payments agreed to be paid by our insurance providers. These lawsuits have not had, and are not expected to have, a material adverse effect on our financial position or the results of our operations.
We are party to various other legal proceedings arising in the ordinary course of our business, the ultimate resolutions of which are not expected to have a material adverse effect on our financial position or the results of our operations.
38
ITEM 9: THE OFFER AND LISTING
TRADING MARKETS
The RELX PLC ordinary shares are listed on the London Stock Exchange, Euronext Amsterdam and the New York Stock Exchange. The London Stock Exchange is the principal trading market for RELX PLC ordinary shares. Trading on the New York Stock Exchange is in the form of American Depositary Shares (“ADSs”), evidenced by American Depositary Receipts (“ADRs”) issued by Citibank N.A., as depositary. Each ADS represents one RELX PLC ordinary share. The tickers for each of RELX PLC’s listings are detailed below:
| — | London Stock Exchange — ‘REL’ |
| — | Euronext Amsterdam — ‘REN’ |
| — | New York Stock Exchange — ‘RELX’ |
39
ITEM 10: ADDITIONAL INFORMATION
ARTICLES OF ASSOCIATION
A copy of RELX PLC’s current Articles of Association (the “Articles”) is filed as Exhibit 1.1 to this Annual Report on Form 20-F.
The following is a summary of the current Articles. As a summary, it is not exhaustive and is qualified in its entirety by reference to UK law and the Articles.
Company’s Objects
RELX PLC’s objects are unrestricted.
Share Capital
As at December 31, 2023 the Company’s issued ordinary share capital comprised 1,906,907,605 shares of 14 51/116p and the number of shares held in treasury totaled 25.4 million. Of these, 5.7 million ordinary shares were held by the Employee Benefit Trust and 19.7 million ordinary shares were held in treasury by RELX PLC. During 2023, RELX PLC bought back a total of 30.9 million ordinary shares to be held in treasury pursuant to the authority given by shareholders at the Annual General Meeting held on April 20, 2023, and the previous authority given by shareholders at the Annual General Meeting held on April 21, 2022. On December 7, 2023, RELX PLC cancelled 31 million ordinary shares held in treasury. These share purchases and cancellations are reflected in the number of ordinary shares held in treasury at, December 31, 2023. All share capital is fully paid up.
RELX PLC by ordinary resolution and subject to the UK Companies Act 2006 (as amended) (the “Companies Act”) may:
| 1. | Allot shares up to a limit of 1/3 of the issued share capital, a further 1/3 of the issued share capital may be allotted but only in connection with a fully pre-emptive rights issue; |
| 2. | Sub-divide all or part of the share capital into shares of a smaller nominal value than the existing shares; and |
| 3. | Consolidate and divide all or part of the share capital into shares of a larger nominal value than the existing shares. |
All shares created by an increase of RELX PLC’s share capital by consolidation, division or sub-division shall be subject to all the provisions of the Articles.
RELX PLC by special resolution and subject to the Companies Act may:
| 1. | Disapply shareholders pre-emption rights on new issue shares up to a limit of 5% of the issued share capital, and disapply pre-emption rights on new issue shares up to a further 5% of the issued share capital in connection with an acquisition or specified capital investment subject to certain conditions; |
| 2. | Buy back its own shares up to a limit of 10% of the issued share capital; and |
| 3. | Reduce its share capital. |
40
Transfer of ordinary shares
A certificated shareholding may be transferred in the usual form or in any other form approved by the Board. The Board in its discretion may refuse to register the transfer of a certificated share which is not fully paid and may also refuse to register the transfer of a certificated share unless the instrument of transfer:
| 1. | is stamped or certified and lodged, at the registered office or other place that the Board decides, accompanied by the relevant share certificate and any other evidence that the Board may reasonably require to prove a legitimate right to transfer; |
| 2. | is in respect of only one class of shares; and |
| 3. | is in favour of not more than four transferees. |
Where the Board refuses to register a transfer of certificated shares, it must notify the transferee of the refusal within two months after the date on which the instrument of transfer was lodged with RELX PLC.
For those members holding uncertificated shares, such transfers must be conducted using a relevant system as defined in the UK Uncertificated Securities Regulations 2001.
Untraced shareholders
RELX PLC is entitled to sell any of its ordinary shares if:
| 1. | during the period of 12 years prior to the publication of any advertisement stating the intent to sell, at least three dividends have become payable on the shares which have remained uncashed; and |
| 2. | during the period of three months following the publication of any advertisement stating the intent to sell, RELX PLC has received no indication of the location, or existence of the member, or the person entitled to the shares by way of transmission. |
Dividend Rights
Subject to the provisions of the Companies Act, the shareholders may by ordinary resolution declare a dividend no larger than the amount recommended by the Board requiring a simple majority of the votes cast. Interim dividends may also be payable if the Board deems that there is sufficient profit available for distribution. Except as otherwise provided by the rights attached to the shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is declared. No dividend payable in respect of a share shall bear interest against RELX PLC, unless otherwise provided by the rights attached to the share.
Dividends may only be paid if RELX PLC has profits available for distribution. “Profits available for distribution” is defined in the Companies Act as “accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made.” RELX PLC is not permitted to pay dividends out of share capital, which includes share premium. Profits available for distribution are determined in accordance with generally accepted accounting principles at the time the relevant accounts are prepared. RELX PLC will not be permitted to make a distribution if, at the time the proposed dividend is to be made, the amount of its net assets is less than the aggregate of its called-up share capital and undistributable reserves, or if the proposed dividend will reduce the net assets below such amount.
Dividends may be paid in cash, or (subject to shareholder approval and to the procedure set out in the Articles) by way of a distribution of assets, including, without limitation, paid up shares or debentures of another body corporate or further issuance of fully paid-up RELX PLC Shares.
41
Unclaimed dividends
Any dividend which remains unclaimed for 12 years from the date when it became due for payment shall, if the Board so resolves, be forfeited and cease to be owed by RELX PLC to the shareholder. RELX PLC may stop issuing dividend cheques or warrants:
| 1. | Where on at least two consecutive occasions dividend cheques/warrants are left uncashed or returned undelivered; or |
| 2. | Where after one such occasion reasonable enquiries have failed to establish an updated address. |
If the member goes on to claim a dividend or warrant, RELX PLC must recommence issuing dividend cheques and warrants.
Distribution of assets on winding up
In the event of RELX PLC being wound up, on the authority of a special resolution of RELX PLC and subject to the UK Insolvency Act 1986 (as amended) the liquidator may:
| 1. | Divide among the members the whole or any part of the assets of RELX PLC. |
| 2. | Value any assets and determine how the division should be made between the members or different classes of members. |
| 3. | Place the whole or any part of the assets in trust for the benefit of the members and determine the scope and terms of these trusts. |
A member cannot be compelled to accept an asset with an inherent liability.
Variation of rights
Subject to the Companies Act, where the capital of RELX PLC is divided into different classes of shares, the unique rights attached to the respective classes may be varied or cancelled:
| 1. | With the written consent of the holders of 75% in nominal value of the issued shares of the class (excluding any treasury shares held in that class); or |
| 2. | By authority of a special resolution passed at a separate general meeting of the holders of the shares of the class. |
General meetings of shareholders
Under the RELX PLC Articles, a resolution put to the vote of a general meeting will be decided on a show of hands unless a vote by poll is duly demanded.
Subject to the Companies Act, RELX PLC must hold a general meeting as its annual general meeting within six months from January 1 every year. The Board may convene a general meeting when necessary and must do so promptly upon requisition by the shareholders. The notice period for annual general meetings is 21 clear days and 14 clear days for other general meetings. Subject to the Companies Act and the Articles, the notice shall be sent to every member at their registered address. If, on two consecutive occasions notices are sent to a member’s registered address and have been returned undelivered the member shall not be entitled to receive any subsequent notice.
Voting rights
On a vote on a resolution by way of a show of hands, every shareholder or duly appointed proxy who is present at the general meeting in person has one vote. On a vote on a resolution by way of a poll every shareholder present in person or by proxy has one vote for every RELX PLC Share of which he, she or it is the holder.
42
In the case of joint holders of a RELX PLC Share, the vote of the senior shareholder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names of the holders are listed in the register of shareholders.
Subject to the provisions of the Companies Act, a poll may be demanded by: (i) the chair of the meeting; (ii) at least five shareholders present in person or by proxy having the right to vote on the resolution (except on the election of the chair of the meeting or on a question of adjournment); (iii) any shareholder or shareholders present in person or by proxy representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding any voting rights attached to any RELX PLC Shares held as treasury shares); or (iv) any shareholder or shareholders present in person or by proxy holding shares conferring a right to vote on the resolution, being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all shares conferring that right (excluding any shares conferring a right to vote on the resolution which are held as treasury shares).
No member is entitled to vote on a partly paid share. The Board also has the discretion to prevent a member from voting in person or by proxy if they are in default of a duly served notice under section 793 of the Companies Act, concerning a request for information about interest in RELX PLC’s shares.
Directors’ Interests
Subject to the provisions of the Companies Act, where a Director declares an interest to the Board, the Board may authorise the matter proposed to it which would otherwise constitute a conflict of interest and place a Director in breach of their statutory duty. Such authorisation is effective where the Director in question is not included in the quorum for the meeting and the matter was agreed without their vote, or would have been agreed to had their vote not been counted. A Director’s duty to declare an interest does not apply in the circumstances provided for by section 177(5) and 177(6) of the Companies Act. A Director:
| 1. | May be a party to, or otherwise interested in, any transaction or arrangement with RELX PLC or in which RELX PLC is directly or otherwise interested; |
| 2. | May act solely or with his firm in a professional capacity (not as auditor) for RELX PLC and shall be entitled to remuneration for his professional services, notwithstanding his position as Director; and |
| 3. | May be interested in a body corporate in which RELX PLC is directly or indirectly interested or where the relationship between the Director and the body corporate is at the request or direction of RELX PLC. |
A Director with a declared interest that has been authorised by the Board, is not accountable to RELX PLC or its shareholders for any benefits received.
Directors’ Remuneration
The remuneration of any Executive Director shall be determined by the Board in accordance with RELX PLC’s Remuneration Policy and may include (without limitation) admission to or continuance of membership of any scheme (including share acquisition schemes), life assurance, pension provision or other such benefits payable to the Director on or after retirement, or to his dependants on or after death.
For Directors who do not hold an executive position in RELX PLC, their ordinary remuneration shall not exceed in aggregate £500,000 per annum or such higher amount as RELX PLC may determine by ordinary resolution from time to time (and on June 27, 2018, an ordinary resolution was passed to increase such amount to £2,000,000 per annum). Each Director shall be paid a fee for their services which is deemed to accrue from day to day at such rate as determined by the Board.
The Directors may grant extra remuneration to any Director who does not hold executive office but sits on any committee of the Board, or performs any other special services at the request of RELX PLC. This extra remuneration may be paid in addition to, or in substitution for the ordinary remuneration.
43
Directors’ appointment/retirement/removal
The Board may appoint a person willing to act as Director, either to fill a vacancy or as an additional Director, provided the upper limit set by the Articles is not exceeded. RELX PLC may by ordinary resolution remove any Director from office, no special notice need be given and no Director proposed for removal under the Articles has a right of protest against such removal. Directors are not required to hold any shares by way of qualification. Directors are not subject to an age limit requirement for retirement.
Borrowing powers
Subject to the Companies Act, the Board may exercise all the powers of RELX PLC to borrow money, guarantee, indemnify, mortgage or charge its undertaking, property, assets (present and future) and uncalled capital and to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of RELX PLC or of any third-party. Without the authority of an ordinary resolution the directors are prohibited from borrowing in excess of an amount equal to the higher of (i) £12,000,000,000 and (ii) two and a half times the adjusted total of capital and reserves.
Indemnity
Subject to the Companies Act, without bar to any other existing indemnity entitlements, RELX PLC may use its assets to indemnify a Director against liability incurred through negligence, default, breach of duty or breach of trust in relation to RELX PLC’s affairs.
Redemption provision
Subject to the provisions of the Companies Act, and without prejudice to any rights attached to any existing shares or class of shares, shares may be issued which are to be redeemed or are to be liable to be redeemed at the option of RELX PLC or the holder. The board may determine the terms, conditions and manner of redemption of shares provided that it does so before the shares are allotted.
Capital call provision
Subject to the terms of allotment, the board may from time to time make calls on the members in respect of any moneys unpaid on their shares (whether in respect of nominal value or premium). Each member shall (subject to receiving at least 14 clear days’ notice specifying when and where payment is to be made) pay to RELX PLC the amount called on his shares as required by the notice. A call may be required to be paid by instalments. A call may be revoked in whole or part and the time fixed for payment of a call may be postponed in whole or part as the board may determine. A person on whom a call is made shall remain liable for calls made on him notwithstanding any subsequent transfer of the shares in respect of which the call was made. A call shall be deemed to have been made at the time when the resolution of the board authorising the call was passed. The joint holders of a share shall be jointly and severally liable to pay all calls in respect of it.
If a call or any instalment of a call remains unpaid in whole or in part after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid. The interest shall be paid at the rate fixed by the terms of allotment of the relevant share or in the notice of the call or, if no rate is fixed, at such rate, not exceeding 15% per annum or, if higher, the appropriate rate (as defined in the Companies Act), as may be determined by the board. The board shall be at liberty to waive payment of such interest wholly or in part in respect of any individual member.
EXCHANGE CONTROLS
Other than certain economic sanctions which may be in effect from time to time, there is currently no UK legislation restricting the import or export of capital or affecting the remittance of dividends or other payments to holders of RELX PLC ordinary shares who are non-residents of the United Kingdom.
There are no limitations relating only to non-residents of the United Kingdom under UK law (subject to the effect of certain economic sanctions which may be in effect from time to time) or RELX PLC’s Articles on the right to be a holder of, and to vote, RELX PLC ordinary shares.
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TAXATION
The following discussion is a summary under present law and tax authority practice of the material UK and US federal income tax considerations relevant to the purchase, ownership and disposal of RELX PLC ordinary shares or ADSs. This discussion applies to you only if you are a US holder, you hold your ordinary shares or ADSs as capital assets and you use the US dollar as your functional currency. It does not address the tax treatment of US holders subject to special rules, such as banks and other financial institutions, dealers or traders in securities or currencies, insurance companies, real estate investment trusts, persons subject to the rules relating to the timing of income inclusions in accordance with applicable financial statements, regulated investment companies, traders in securities that elect to mark-to-market, tax-exempt entities, persons liable for alternative minimum tax, pass-through entities for US federal income tax purposes (including entities treated as partnerships or S-corporations for such purposes), holders which own (actually or constructively) 10% or more of RELX PLC shares (as measured by vote or value), persons holding ordinary shares or ADSs as part of a hedging, straddle, conversion or constructive sale transaction, or persons that are resident or domiciled in the United Kingdom (or who have ceased to be resident in the United Kingdom or became treated as resident outside the United Kingdom for the purpose of a double tax treaty within the past five years of assessment). The summary also does not discuss the US federal alternative minimum tax, US estate and gift tax laws, the tax laws of particular states or localities in the United States or the Medicare tax on net investment income.
This summary does not consider your particular circumstances. It is not a substitute for tax advice. We urge you to consult your own independent tax advisors about the income, capital gains and/or transfer tax consequences to you in light of your particular circumstances of purchasing, holding and disposing of ordinary shares or ADSs.
As used in this discussion, “US holder” means a beneficial owner of ordinary shares or ADSs that is for US federal income tax purposes: (i) an individual US citizen or resident, (ii) a corporation (or other entity treated as a corporation) created or organised under the laws of the United States, any state thereof or the District of Columbia, (iii) a trust (a) that is subject to the control of one or more US persons and the primary supervision of a US court or (b) that has a valid election in effect under US Treasury regulations to be treated as a US person or (iv) an estate the income of which is subject to US federal income taxation regardless of its source.
UK Taxation
Dividends
Under current UK taxation legislation, no tax is required to be withheld at source from dividends paid on the RELX PLC ordinary shares or ADSs. Dividends payable on the ADSs or RELX PLC ordinary shares should not be chargeable to UK tax in the hands of a non-UK resident unless such person (i) is a company carrying on a trade in the United Kingdom through a UK permanent establishment, or (ii) carries on a trade (or profession or vocation) in the United Kingdom and the dividends are a receipt of that trade.
Capital Gains
Non-UK resident shareholders may be liable for UK taxation on capital gains realised on the disposal of their RELX PLC ordinary shares or ADSs if at the time of the disposal the shareholder carries on a trade, profession or vocation in the United Kingdom through a branch or agency, or in the case of a company a permanent establishment, and such ordinary shares or ADSs are or have been used, held or acquired for the purposes of such trade, profession, vocation, branch, agency or permanent establishment.
UK Stamp Duty and Stamp Duty Reserve Tax
Current UK law includes a provision whereby UK stamp duty reserve tax (SDRT) or UK stamp duty is payable upon the transfer or issue of RELX PLC ordinary shares to the depositary in exchange for RELX PLC ADSs evidenced by ADRs. For this purpose, the current rate of stamp duty and SDRT is 1.5%, applied, in each case, to: (i) the issue price when the ordinary shares are issued; (ii) the amount or value of the consideration where shares are transferred for consideration in money or money’s worth; or (iii) the value of the ordinary shares in any other case. Following certain EU litigation, HMRC accepted that they would no longer seek to apply the 1.5% SDRT charge on an issue of shares into a clearance service or depositary receipt system (or a transfer of shares into a clearance service or depositary receipt system, where such transfer is integral to the raising of capital by the company concerned) on the basis that the charge was not compatible with EU law. Following the UK’s departure from the EU, such pre-existing EU law rights, recognised in litigation, were preserved as a domestic law matter following the end of the implementation
45
period on December 31, 2020 pursuant to provisions of the UK European Union (Withdrawal) Act 2018. In addition, however, on June 29, 2023 the UK Retained EU Law (Revocation and Reform) Act was enacted, which had the effect that such pre-existing EU law rights, recognised in litigation, would (that is, absent the exercise of a regulation-making power to restate or reproduce such rights in domestic law) cease to be recognised after December 31, 2023.
The Finance Bill 2023-4, which passed the House of Commons on February 5, 2024 and is thus expected to be enacted in early 2024, makes provision to ensure it continues to be the case, notwithstanding the effect of the EU Law (Revocation and Reform) Act 2023, that stamp duty or SDRT of 1.5% is not payable in relation to (i) issues of shares into depositary receipt systems and clearance services and (ii) transfers of shares into a clearance service or depositary receipt system, where such transfer is integral to the raising of new capital by the company concerned. The Finance Bill 2023-4 also includes an additional exemption for ‘qualifying listing arrangements’ where shares are transferred (without a change in beneficial ownership) in connection with the listing of such shares on a recognised stock exchange. These measures have had provisional effect from January 1, 2024 under a Ways and Means resolution of the House of Commons passed on November 27, 2023 and given effect under section 1 of the Provisional Collection of Taxes Act 1968 and section 50 of the Finance Act 1973. The Finance Bill 2023-4, once enacted, will give permanent legislative effect to the proposed measures, which would otherwise cease to have effect.
In view of the continuing uncertainty, specific professional advice should be sought before incurring a 1.5% stamp duty or stamp duty reserve tax charge in any circumstance.
No UK stamp duty should be payable on the transfer of RELX PLC ADSs, provided that no instrument of transfer is entered into (which should not be necessary). An agreement to transfer RELX PLC ADSs should not give rise to a liability to SDRT.
A transfer of RELX PLC ordinary shares by the depositary to an ADS holder where there is no transfer of beneficial ownership will not be chargeable to UK stamp duty or SDRT.
Purchases of RELX PLC ordinary shares, as opposed to ADSs, will generally give rise to UK stamp duty or SDRT at the time of transfer or agreement to transfer, normally at the rate of 0.5% of the amount payable for the ordinary shares. SDRT and UK stamp duty are usually paid by the purchaser. If the ordinary shares are later transferred to the depositary, additional UK stamp duty or SDRT may be payable as described above.
Inheritance tax
Subject to certain provisions relating to trusts and settlements, RELX PLC ordinary shares or ADSs held by an individual shareholder who is domiciled in the United States for the purposes of the Convention between the United States and the United Kingdom relating to estate and gift taxes and is not a UK national as defined in the Convention will not generally be subject to UK inheritance tax on the individual’s death (whether held on the date of death or gifted during the individual’s lifetime, and provided any applicable US federal gift or estate tax liability is paid), except where the ordinary share or ADS is part of the business property of a UK permanent establishment or pertains to a UK fixed base of an individual who performs independent personal services.
US Federal Income Taxation
Holders of the ADSs generally will be treated for US federal income tax purposes as owners of the ordinary shares represented by the ADSs. Accordingly, deposits of ordinary shares for ADSs and withdrawals of shares for ADSs will not be subject to US federal income tax.
Dividends
Dividends on RELX PLC ordinary shares or ADSs will generally be included in your gross income as ordinary dividend income from foreign sources. The dollar amount recognised on receiving a dividend in pounds sterling will be based on the exchange rate in effect on the date the depositary receives the dividend, or in the case of ordinary shares on the date you receive the dividend, as the case may be, whether or not the payment is converted into US dollars at that time. Any gain or loss recognised on a subsequent disposition or conversion of pounds sterling for a different US dollar amount generally will be US source ordinary income or loss. Dividends received will not be eligible for the dividends received deduction available to US corporations.
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With respect to certain non-corporate US holders, certain dividends received from a qualified foreign corporation may be subject to reduced rates of taxation. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of certain comprehensive income tax treaties with the United States. United States Treasury Department guidance indicates that the United Kingdom is a country with which the United States has an income tax treaty in force that meets these requirements, and RELX PLC believes it is eligible for the benefits of this income tax treaty. Individuals that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or other requirements will not be eligible for the reduced rates of taxation. US holders should consult their own tax advisors regarding the application of these rules given their particular circumstances.
Subject to certain conditions and limitations, foreign withholding taxes on dividends withheld at the appropriate rate may be treated as foreign taxes eligible for credit or deduction against your US federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on the ordinary shares or ADSs will be treated as income from sources outside the United States and will generally constitute passive category income. Further, in certain circumstances, if you have held the ordinary shares or ADSs for less than a specified minimum period during which you are not protected from risk of loss, or are obligated to make payments related to the dividends, you will not be allowed a foreign tax credit for foreign taxes imposed on the dividends on the ordinary shares or ADSs. Individuals that treat a dividend as qualified dividend income may take into account for foreign tax credit limitation purposes only the portion of the dividend effectively taxed at the highest applicable marginal rate. The rules governing the foreign tax credit are complex. US holders should consult their own tax advisors regarding the availability of the foreign tax credit or deduction under their particular circumstances.
Dispositions
You generally will recognise a gain or loss on the sale or other disposition of ordinary shares or ADSs in an amount equal to the difference between the amount realised upon the sale or other disposition and your adjusted basis in the ordinary shares or ADSs. The gain or loss generally will be capital gain or loss. It will be long term capital gain or loss if you have held the ordinary shares or ADSs for more than one year at the time of sale or other disposition. Long term capital gains of individuals are eligible for reduced rates of taxation. Deductions for capital losses are subject to limitations. Any gain or loss you recognise generally will be treated as income from US sources for foreign tax credit limitation purposes.
If you receive pounds sterling or euros on the sale or other disposition of your ordinary shares or ADSs, you will realise an amount equal to the US dollar value of the pounds sterling at the spot rate on the date of sale or other disposition (or in the case of cash basis and electing accrual basis taxpayers, if the ordinary shares or ADSs are traded on an established securities market, the settlement date for the sale or other disposition). Any gain or loss realised by a US holder between the sale date and the settlement date or on a subsequent disposition or conversion of pounds sterling into different US dollar amount generally will be US source ordinary income or loss. US holders will generally have a tax basis in the pounds sterling or the euros that you receive equal to the US dollar value of the pound sterling or euro received at the spot rate on the settlement date.
Information Reporting and Backup Withholding Tax
Dividends from ordinary shares or ADSs and proceeds from the sale or other disposition of the ordinary shares or ADSs may be reported to the Internal Revenue Service (“IRS”) unless the shareholder is a corporation or other exempt recipient. A backup withholding tax may apply to such reportable payments unless the shareholder (i) provides an accurate taxpayer identification number and otherwise complies with applicable requirements of the backup withholding rules or (ii) otherwise establishes a basis for exemption. The amount withheld under the backup withholding rules may be allowed as a credit against the holder’s US federal income tax liability and may entitle the holder to a refund, provided the required information is timely furnished to the IRS.
Certain US holders are required to report to the IRS information about their investment in ordinary shares or ADSs not held through an account with a domestic financial institution. Investors who fail to report required information could become subject to substantial penalties. US holders should consult with their own tax advisors about the effect of this legislation and any other reporting obligations arising from their investment in the ordinary shares or ADSs.
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DOCUMENTS ON DISPLAY
The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC. This Annual Report on Form 20-F and other information filed or furnished by us with or to the SEC may be accessed through this website.
Our internet address is www.relx.com. The information on our website is not incorporated by reference into this Annual Report on Form 20-F.
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ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
Our primary market risks are to changes in interest rates and exchange rates as well as liquidity and credit risk.
Net finance costs are exposed to interest rate fluctuations on debt, cash and cash equivalents. Upward fluctuations in interest rates increase the interest cost of floating rate debt whereas downward fluctuations in interest rates decrease the interest earned on floating rate cash and cash equivalents. Interest expense payable on fixed rate debt is protected against upward movement in interest rates but does not benefit from downward shifts. Our companies engage in foreign currency denominated transactions and are therefore subject to exchange rate risk on such transactions. Net finance costs are also exposed to changes in the fair value of derivatives (as a result of interest and exchange rate fluctuations) which are not part of a designated hedging relationship under IFRS 9 — ‘Financial Instruments’, and to ineffectiveness that may arise on designated hedging relationships. Our management of this interest rate risk and foreign exchange rate risk is described below.
We manage a portfolio of long-term debt, short-term debt and committed bank facilities to support our capital structure and are exposed to the risk that relevant markets are closed and debt cannot be refinanced on a timely basis. In addition, the credit spread at which we borrow is exposed to changes in market liquidity and investor demand. We manage this risk by maintaining a range of borrowing facilities and debt programmes with a maturity profile to limit refinancing risk.
We have a credit exposure for the full principal amount of cash and cash equivalents held with individual counterparties. In addition, we have a credit risk from the potential non-performance by counterparties to financial instruments; this credit risk normally being restricted to the amounts of any hedge gain and not the full principal amount being hedged. Credit risks are managed by monitoring the credit quality of counterparties and restricting the amounts outstanding with each of them. We are also exposed to changes in the market value of our venture capital investments.
Our management of the above market risks is described in further detail in note 17 to the consolidated financial statements under the heading ‘Financial Instruments’ on pages 194 to 200 and in note 21 under the heading ‘Debt’ on pages 201 to 202 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
Management of Interest Rate Risk and Foreign Exchange Rate Risk
We seek to manage our risk to movements in interest and exchange rates by means of derivative financial instruments, including interest rate swaps and forward foreign exchange contracts. We only enter into derivative financial instruments to hedge (or reduce) the underlying risks described above.
We enter into interest rate swaps in order to achieve an appropriate balance between fixed and floating rate debt, cash and cash equivalents and to manage the risk associated with movements in interest rates. Interest rate swaps are used to hedge the effects of fluctuating interest rates on floating rate debt, cash and cash equivalents by allowing us to fix the interest rate on a notional principal amount equal to the principal amount of the underlying floating rate cash, cash equivalents or debt being hedged. They are also used to swap fixed rate long term debt to floating rate. Such swaps may be used to swap an entire fixed rate bond for floating rate for its full term or they may be used to swap a portion of the principal amount or a portion of the term of the borrowing to floating rate. Similarly, we use forward foreign exchange contracts to hedge the transactional exposure arising from exchange rate movements on our foreign currency revenue and operating costs.
Where net finance costs are exposed to changes in the fair value of derivatives (as a result of interest and exchange rate fluctuations), we manage this risk by designating derivatives in a highly effective hedging relationship unless the potential change in their fair value is deemed to be insignificant.
Derivatives are used to manage the risk associated with interest rate and exchange rate movements and the Group does not enter into speculative derivatives. Derivatives used by the Group for hedging a particular risk are not specialised and are generally available from numerous sources.
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Sensitivity Analysis
The following analysis sets out the sensitivity of the fair value of our financial instruments to selected changes in interest rates and exchange rates. The range of changes represents our view of the changes that are reasonably possible over a one-year period.
The fair values of interest rate swaps and forward foreign exchange contracts set out below represent the replacement costs calculated using market rates of interest and exchange at December 31, 2023. The fair value of long-term debt has been calculated by discounting expected future cash flows at market rates.
Our use of financial instruments and our accounting policies for financial instruments are described more fully in note 17 to the consolidated financial statements under the heading ‘Financial Instruments’ on pages 194 to 200 of the RELX Annual Report and Financial Statements 2023 and are incorporated herein by reference to Exhibit 15.2.
(a) Interest Rate Risk
The following sensitivity analysis assumes an immediate 100 basis point change in interest rates for all currencies and maturities from their levels at December 31, 2023 with all other variables held constant.
|
|
|
Fair Value |
|
Fair Value Change |
|
Fair Value |
|
Fair Value Change |
||||||||||
|
|
|
December 31, |
|
+100 |
|
-100 |
|
December 31, |
|
+100 |
|
-100 |
||||||
|
Financial Instrument |
|
2022 |
|
basis points |
|
basis points |
|
2023 |
|
basis points |
|
basis points |
||||||
|
|
|
(In millions) |
|
|
|
|
|
|
|
(In millions) |
|
|
|
|
|
|
||
|
Short-term debt |
|
£ |
(102) |
|
£ |
— |
|
£ |
— |
|
£ |
(220) |
|
£ |
— |
|
£ |
— |
|
Long-term debt (including current portion) |
|
|
(6,476) |
|
|
211 |
|
|
(226) |
|
|
(6,229) |
|
|
231 |
|
|
(248) |
|
Interest rate swaps (swapping fixed rate to floating) |
|
|
(216) |
|
|
(84) |
|
|
90 |
|
|
(112) |
|
|
(104) |
|
|
112 |
A 100 basis point change in interest rates would not result in a material change to the fair value of other financial instruments.
At December 31, 2023, 57% of gross debt was at fixed rate. A 100 basis point reduction in interest rates would result in an estimated decrease in net finance costs of £25 million and £26 million in 2022 and 2023, respectively, based on the composition of financial instruments including cash, cash equivalents, bank loans and commercial paper debt at December 31, 2022 and December 31, 2023, respectively. A 100 basis points rise in interest rates would result in an estimated increase in net finance costs of £25 million and £26 million in 2022 and 2023, respectively.
(b) Foreign Exchange Rate Risk
The following sensitivity analysis assumes an immediate 10% change in all foreign currency exchange rates against sterling from their levels at December 31, 2023 with all other variables held constant. A +10% change indicates a strengthening of the currency against sterling and a -10% change indicates a weakening of the currency against sterling.
|
|
|
Fair Value |
|
|
|
|
|
|
|
Fair Value |
|
|
|
|
|
|
||
|
|
|
December 31, |
|
Fair Value Change |
|
December 31, |
|
Fair Value Change |
||||||||||
|
Financial Instrument |
|
2022 |
|
+10% |
|
-10% |
|
2023 |
|
+10% |
|
-10% |
||||||
|
|
|
(In millions) |
|
|
|
|
|
|
|
|
(In millions) |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
£ |
334 |
|
£ |
32 |
|
£ |
(32) |
|
£ |
155 |
|
£ |
15 |
|
£ |
(15) |
|
Short-term debt |
|
|
(102) |
|
|
(10) |
|
|
10 |
|
|
(220) |
|
|
(22) |
|
|
22 |
|
Long-term debt (including current portion) |
|
|
(6,476) |
|
|
(644) |
|
|
644 |
|
|
(6,229) |
|
|
(620) |
|
|
620 |
|
Finance lease receivables |
|
|
5 |
|
|
— |
|
|
— |
|
|
4 |
|
|
— |
|
|
— |
|
Interest rate swaps (including cross currency interest rate swaps) |
|
|
(216) |
|
|
(22) |
|
|
22 |
|
|
(112) |
|
|
(11) |
|
|
11 |
|
Forward foreign exchange contracts |
|
|
(21) |
|
|
(82) |
|
|
82 |
|
|
46 |
|
|
(173) |
|
|
173 |
A 10% change in foreign currency exchange rates would not result in a material change to the fair value of other financial instruments.
50
ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Fees and charges for American Depositary Receipt (ADR) holders
Citibank N.A., as depositary for the RELX PLC ADR programme, collects its fees for delivery and surrender of American Depositary Shares (ADSs) directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deductions from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
|
Persons depositing or withdrawing shares must pay |
|
For |
|
|
|
|
|
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) |
|
Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property (in certain circumstances volume discounts may be available) |
|
|
|
|
|
|
|
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates |
|
|
|
|
|
$0.05 (or less) per ADS |
|
Any cash distribution to ADS registered holders |
|
|
|
|
|
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs |
|
Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders |
|
|
|
|
|
$0.05 (or less) per ADS per calendar year |
|
Depositary services |
|
|
|
|
|
Registration or transfer fees |
|
Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares |
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|
|
Expenses of the depositary |
|
Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) |
|
|
|
|
|
|
|
Converting foreign currency to US dollars |
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|
|
|
|
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes |
|
As necessary |
|
|
|
|
|
Any charges incurred by the depositary or its agents for servicing the deposited securities |
|
As necessary |
Fees and other payments made by the depositary to the Group
In consideration of acting as depositary, Citibank N.A. has agreed to make certain reimbursements and payments to us on an annual basis for expenses related to the administration and maintenance of the ADR programme including, but not limited to, New York Stock Exchange listing fees, investor relations expenses, or any other programme related expenses. The depositary has also agreed to pay the standard out-of-pocket administrative, maintenance and shareholder services expenses for providing services to the registered ADR holders. It has also agreed with us to waive certain standard fees associated with promotional services, programme visibility campaigns and programme analytic reporting. In certain instances, the depositary has agreed to provide additional annual reimbursements and payments to us based on any applicable performance indicators relating to the ADR facility. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us is not necessarily tied to the amount of fees the depositary collects from investors.
From January 1, 2023 to February 22, 2024, we received a reimbursement of $175,000, net of withheld taxes, from the depositary for New York Stock Exchange listing fees, investor relations expenses and other programme related expenses, in connection with the ADR facility.
51
PART II
ITEM 15: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
RELX PLC is required to comply with applicable US regulations, including the US Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), insofar as they apply to foreign private issuers. Accordingly, RELX PLC has established a Disclosure Committee comprising the company secretary of RELX PLC and other senior RELX managers appointed to provide assurance to the Chief Executive Officer and Chief Financial Officer of RELX PLC. The committee has reviewed and evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of RELX PLC have concluded that the disclosure controls and procedures for RELX PLC are effective as of the end of the period covered by this Annual Report on Form 20-F.
Management’s Annual Report on Internal Control over Financial Reporting
In accordance with Section 404 of the Sarbanes-Oxley Act, management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a–15(f) and 15d–15(f) under the Exchange Act, as amended. The internal controls over financial reporting of RELX PLC are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of the financial statements of RELX PLC would be prevented or detected.
Management conducted an evaluation of the effectiveness of its internal controls over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the internal controls over financial reporting of RELX PLC were effective as of December 31, 2023.
Certifications by the Chief Executive Officer and Chief Financial Officer of RELX PLC as required by the Sarbanes-Oxley Act are submitted as exhibits to this Annual Report on Form 20-F (see “Item 19: Exhibits” on pages S-3 and S-4).
Ernst Young LLP have audited the consolidated financial statements for the fiscal year ended December 31, 2023 and have audited the effectiveness of internal controls over financial reporting as at December 31, 2023. Their report in respect of RELX is included herein.
52
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of RELX PLC
Opinion on Internal Control over Financial Reporting
We have audited RELX PLC’s (the ‘Group’s’) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Group as at December 31, 2023 and 2022, and the related consolidated income statement, statement of comprehensive income, statement of cash flows, and statement of changes in equity for each of the three years in the period ended December 31, 2023, and the related notes of the Group and our report dated February 14, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst Young LLP
London, United Kingdom
February 14, 2024
53
Internal Control over Financial Reporting
Management, including the Chief Executive Officer and Chief Financial Officer of RELX PLC, have reviewed whether or not during the period covered by this Annual Report on Form 20-F, there have been any changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the internal controls over financial reporting of RELX PLC. Based on that review, the Chief Executive Officer and Chief Financial Officer of RELX PLC have concluded that there have been no such changes.
An outline of the internal control structure is set out below.
The Board of RELX PLC has adopted a schedule of matters which are required to be brought to it for decision. During 2023, the Board of RELX PLC exercised a supervisory role over the activities and systems of internal control of the Group.
The RELX PLC Audit Committee met on a regular basis to review the systems of internal control and risk management of the Group.
Audit Committee
RELX PLC has an Audit Committee which comprise only Non-Executive Directors, all of whom are independent. The Audit Committee, which meets regularly, was chaired by Suzanne Wood, the other members being Alistair Cox, June Felix, Charlotte Hogg and Andrew Sukawaty.
The main roles and responsibilities of the Audit Committee are set out in written terms of reference and include:
| (i) | to monitor the integrity of the financial statements, and any formal announcements relating to financial performance, reviewing significant financial reporting judgements contained in them; |
| (ii) | to review the company’s internal financial controls and the internal control and risk management systems; |
| (iii) | to monitor and review the effectiveness of the internal audit function; |
| (iv) | to make recommendations to the Board, for it to put to the shareholders for their approval in General Meeting, in relation to the appointment, reappointment and removal of the external auditor and to approve the remuneration and terms of engagement of the external auditor; |
| (v) | to review and monitor the external auditors’ independence and objectivity and the effectiveness of the audit process, taking into consideration relevant professional and regulatory requirements; and |
| (vi) | to develop and recommend policy on the engagement of the external auditor to supply non audit services, taking into account relevant ethical guidance regarding the provision of non audit services by the external audit firm, and to monitor compliance. |
The Audit 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 Audit Committee has explicit authority to investigate any matters within its terms of reference and has access to all resources and information that it may require for this purpose. The Audit Committee is entitled to obtain legal and other independent professional advice and has the authority to approve all fees payable to such advisers.
The terms of reference for the Audit Committee are reviewed annually and a copy is published on our website, www.relx.com. The information on our website is not incorporated by reference into this Annual Report on Form 20-F.
54
ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT
The members of RELX PLC’s Audit Committee are identified in “Item 6: Directors, Senior Management and Employees”. The members of the Board of Directors of RELX PLC have determined that the Audit Committee contains at least one financial expert within the meaning of the applicable rules and regulations of the SEC. The Audit Committee financial expert is Suzanne Wood. Suzanne Wood is considered independent.
ITEM 16B: CODES OF ETHICS
The Group has adopted a code of ethics (Code of Ethics and Business Conduct) that applies to all directors, officers and employees of the Group, as well as a separate code of ethics (Code of Ethics for Senior Financial Officers) that also applies to RELX PLC’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (collectively, the “Senior Financial Officers”). Both of these codes of ethics are available under “Policies” of the Corporate Responsibility page at www.relx.com. The information on our website is not incorporated by reference into this Annual Report on Form 20-F. If the Code for Senior Financial Officers is amended or a provision waived, we intend to satisfy any disclosure obligations by posting information on the internet website set forth above within five business days of such amendment or waiver. In June 2021, we amended the Code for Senior Financial Officers to address the speed of violation reporting, required cooperation with investigations of violations, the individuals and activities covered by the Code’s conflict of interest and undue influence provisions and necessary procedures to obtain waivers under the Code.
ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed by our principal accountant, Ernst Young LLP, are set forth in note 4 to the consolidated financial statements under the heading ‘Auditor’s remuneration’ on page 176 of the RELX Annual Report and Financial Statements 2023 and incorporated herein by reference to Exhibit 15.2.
The Audit Committee of RELX PLC has adopted policies and procedures for the pre-approval of audit and non-audit services provided by the auditors. These policies and procedures are summarised below.
The terms of engagement and scope of the annual audit of the financial statements are agreed by the Audit Committee in advance of the engagement of the auditors in respect of the annual audit. The audit fees are approved by the Audit Committee.
The auditors are not permitted to provide non-audit services that would compromise their independence or violate any laws or regulations that would affect their appointment as auditors. They are eligible for selection to provide non-audit services only to the extent that their skills and experience make them a logical supplier of the services. The Chair of the Audit Committee must pre-approve the provision of all non-audit services by the auditors and will consider SEC rules and other guidelines in determining the scope of permitted services. All assignments other than audit-related work must be specifically pre-approved by the Audit Committee in advance of commissioning the work. Aggregate non-audit fees must not exceed the annual audit fees in any given year, unless approved in advance by the Audit Committee. All of the audit and non-audit services carried out in the year ended December 31, 2023 were pre-approved under the policies and procedures summarised above.
55
ITEM 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
During 2023, the Group repurchased a total of 30.9 million shares for total consideration of £800 million ($992 million) to be held in treasury.
During 2022 and 2023, the Employee Benefit Trust purchased 2.2 million and 2.0 million RELX PLC shares, respectively, in order to satisfy awards under our equity-based plans as described in “Item 6: Directors, Senior Management and Employees — Share Ownership”.
|
|
|
|
|
|
|
|
|
Approximate |
|
|
|
|
|
|
|
|
|
|
maximum |
|
|
|
|
|
|
|
|
Total shares |
|
value |
|
|
|
|
|
|
|
|
repurchased |
|
of shares that |
|
|
|
|
|
|
|
|
under |
|
may yet be |
|
|
|
|
Number of |
|
Average price |
|
publicly |
|
purchased |
|
|
|
|
ordinary |
|
paid per |
|
announced |
|
under the |
|
|
|
|
shares |
|
share |
|
programmes |
|
programmes |
|
|
January 2023 (1) |
|
4,414,183 |
|
2,381p |
|
4,414,183 |
|
£ |
45 million |
|
February 2023 (2)(3) |
|
5,164,160 |
|
2,495p |
|
3,199,911 |
|
£ |
616 million |
|
March 2023 (4) |
|
4,401,993 |
|
2,573p |
|
4,401,993 |
|
£ |
502 million |
|
April 2023 (4) |
|
3,086,979 |
|
2,663p |
|
3,086,979 |
|
£ |
420 million |
|
May 2023 (4) |
|
3,402,008 |
|
2,500p |
|
3,402,008 |
|
£ |
335 million |
|
June 2023 (4) |
|
3,273,298 |
|
2,602p |
|
3,273,298 |
|
£ |
250 million |
|
July 2023 (4) |
|
2,235,578 |
|
2,568p |
|
2,235,578 |
|
£ |
193 million |
|
August 2023 (4) |
|
1,826,235 |
|
2,564p |
|
1,826,235 |
|
£ |
146 million |
|
September 2023 (4) |
|
1,631,522 |
|
2,744p |
|
1,631,522 |
|
£ |
101 million |
|
October 2023 (4) |
|
1,660,705 |
|
2,874p |
|
1,660,705 |
|
£ |
53 million |
|
November 2023 (4) |
|
1,520,519 |
|
2,976p |
|
1,520,519 |
|
£ |
8 million |
|
December 2023 (2)(4)(5) |
|
259,205 |
|
3,094p |
|
259,195 |
|
£ |
150 million |
|
|
|
32,876,385 |
|
|
|
30,912,126 |
|
|
|
| (1) | Includes amounts purchased under the £150 million ($186 million) non-discretionary buyback programme announced December 9, 2022. |
| (2) | Includes shares purchased to satisfy awards under our equity-based plans as described in “Item 6: Directors, Senior Management and Employees — Share Ownership”. |
| (3) | Includes amounts purchased under the £150 million ($186 million) non-discretionary buyback programme announced December 9, 2022 and the £650 million ($806 million) non-discretionary programme announced February 16, 2023. |
| (4) | Includes amounts purchased under the £650 million ($806 million) non-discretionary buyback programme announced February 16, 2023. This non-discretionary buyback programme was completed on December 6, 2023. |
| (5) | On December 8, 2023 RELX announced a non-discretionary buyback programme to repurchase further ordinary shares up to the value of £150 million ($186 million) in total between January 2, 2024 and February 9, 2024. A further 4.6 million RELX PLC shares have been purchased as at February 14, 2024, under this programme. |
On February 15, 2024 RELX PLC announced its intention to repurchase further ordinary shares up to the value of £850 million ($1,054 million) over the remainder of 2024.
56
ITEM 16G: CORPORATE GOVERNANCE
Details of our corporate governance practices are set out on page 52 of “Item 15: Controls and Procedures”.
Compliance with New York Stock Exchange Corporate Governance Rules
RELX PLC, as a company listed on the New York Stock Exchange (the “NYSE”), is subject to the listing requirements of the NYSE and the rules of the SEC. We also continually monitor our compliance with the provisions of the Sarbanes-Oxley Act that are applicable to foreign private issuers.
As a foreign private issuer, RELX PLC is only required to comply with certain of the NYSE corporate governance rules and is in compliance with all applicable rules. The NYSE’s rules also require disclosure of any significant ways in which their corporate governance practices differ from those required of US companies under the NYSE listing standards.
We follow UK corporate governance practice, which does not differ significantly from the NYSE corporate governance standards for foreign private issuers. We believe that our corporate governance practices do not differ in any significant way from those required to be followed by US companies under the NYSE corporate governance listing standards.
The NYSE listing standards provide that US companies must have a nominating/corporate governance committee composed entirely of independent directors and with a written charter that addresses the committee’s purpose and responsibilities which, at a minimum, must be to identify individuals qualified to become board members, develop and recommend to the Board a set of corporate governance principles and to oversee the evaluation of the board and management.
RELX PLC has a Nominations Committee and a Corporate Governance Committee. The written terms of reference adopted by the RELX PLC Board for these committees specify purposes and responsibilities that correspond to those of a US company’s nominating/corporate governance committee under the NYSE’s listing standards. The Nominations Committee and the Corporate Governance Committee are composed entirely of Non-Executive Directors.
ITEM 16K: CYBERSECURITY
Cybersecurity – Risk Management and Strategy
RELX takes measures to assess, identify, and manage material risks from cybersecurity threats, including the following:
| ● | We have established security programmes which are constantly reviewed and updated to address developments in the threat landscape with the aim of ensuring our ability to prevent, respond to and recover from a cybersecurity attack, that data is protected and our business infrastructures and those of our third-party service providers continue to operate. |
| ● | 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 which include procedures to recover and restore data and applications in the event of an attack. |
| ● | We maintain appropriate information security policies and contractual requirements for our businesses and run programmes monitoring the application of our data security and resilience policies by third-party service providers. |
| ● | We use independent internal and third-party auditors to test, evaluate, and help enhance our procedures and controls. |
| ● | We continuously monitor the global regulatory landscape to identify emerging cybersecurity, data protection and privacy laws, and, as needed, create implementation plans to comply with them. |
| ● | We procure appropriate cybersecurity insurance to mitigate the potential losses arising from a cybersecurity incident. |
57
RELX has a well-embedded risk management framework based on the Internal Control-Integrated Framework (2013) by the Committee of Sponsoring Organisations of the Treadway Commission (COSO). Through this framework, risks are identified, assessed, mitigated, and monitored in an effective and consistent way across its businesses. RELX uses the 3 Lines of Defence model and aligns its risk management and internal control systems with the COSO framework. Business Areas maintain risk management and internal control systems which are appropriate to the nature and scale of their activities and address all significant strategic, operational, financial, cybersecurity, legal, regulatory compliance, and reputational risks that they face.
RELX risk management is integrated in the management of the business, with a robust semiannual risk assessment process in place and overseen by the Head of Group Insurance and Risk. The approach is designed to ensure a high level of awareness on risk matters, including emerging risks, thorough identification of risks, and consideration of appropriate mitigating controls including an evaluation of their effectiveness. Every business unit of significance and each corporate function within RELX is part of this process. Internal Audit and Assurance (IAA) performs internal audits and assesses the effectiveness of controls and management responsiveness to identified risks. Prioritisation of audits on the audit plan are informed by the risk assessment. The audit findings and required remediation are documented for key stakeholders and reported to and discussed with the RELX PLC Audit Committee.
The cybersecurity risk framework aligns with and feeds into the enterprise risk management framework. Specifically, the RELX Information Security Council (ISC), chaired by the Head of Information Assurance and Data Protection, has established and integrated processes to measure risk in each RELX business using qualitative and quantitative measures, including the factoring of industry risk events, attacks on RELX systems, and the investigation, remediation, and cost of incidents within each business. The risk assessment results drive future cybersecurity programme priorities within RELX and its businesses.
In support of these measures, RELX has built skilled cybersecurity teams. Members of the RELX cybersecurity teams have extensive experience and maintain industry certifications such as the Certified Information Systems Security Professional (CISSP), Certified Information Security Manager (CISM), Certified Ethical Hacker (CEH), The SANS Institute Global Information Assurance Certification (SANS GIAC), Certified Information Privacy Professional (CIPP), and Certified Information Security Auditor (CISA).
As noted above, the Company from time to time engages with independent consultants and auditors to assess distinct elements of its cybersecurity program, including a biennial third-party audit of products and services which incorporate sensitive personally identifiable information. The Company also periodically completes ISO 27001 certifications, SOC 2 audit reports, and NIST Cyber Security Framework assessments for its businesses. In further support of its cybersecurity programme, the Company regularly engages independent researchers and penetration testers; and implements bug bounty programmes to proactively identity potential vulnerabilities and further mitigate risk.
The Company has defined and implemented a Third Party Provider Policy that includes the assessment of cybersecurity risk from third-party service providers (suppliers) ; the evaluation of such risk using industry standard criteria such as audit reports, certifications, and interviews; the mitigation or acceptance by management of residual risk from the engagement of the supplier; and periodic re-assessments of the supplier. The Company has established business continuity plans pursuant to a comprehensive business continuity programme aimed at reducing disruption in the event of a significant cybersecurity failure by a supplier. The Company additionally uses threat intelligence services to identify suppliers that have had significant cybersecurity incidents and ensures that the supplier has appropriately mitigated the root causes of that incident. The Company has also established a formal supplier resilience programme to identify and manage critical suppliers across the business. The Company includes cybersecurity contractual provisions with suppliers to address prevention, detection, notice obligations, communication protocols, and recovery steps.
For a description of how risks from cybersecurity threats could materially affect RELX, including its business strategy, results of operations or financial condition, see “Item 3: Key Information—Risk Factors—Compromises of our cyber security systems and other unauthorised access to our databases, could adversely affect our business and operations” which is incorporated by reference into this Item 16K.
58
Cybersecurity – Governance
The RELX PLC Board monitors the internal control and risk management systems and performs an annual assessment of their effectiveness. With respect to cybersecurity:
| ● | The Head of Information Assurance Data Protection updates the RELX Board of Directors semiannually on the state of the Company’s cybersecurity program. These updates consist of, but are not limited to, a discussion of the industry threat landscape and implications for the Company; an explanation of the current cybersecurity risk assessment for the Company; a description of key incidents, lessons learned, and new initiatives in the reporting period; a summary of key operational metrics; and focus areas and initiatives to mitigate current and future cybersecurity threats for the Company. |
| ● | The CTO Forum, defined below, updates the RELX Board of Directors annually, primarily on technology which includes key cybersecurity implications of technology projects. |
In addition, as noted above, the RELX PLC Audit Committee receives and discusses the IAA’s audit findings, which may include cybersecurity matters.
The Chief Legal Officer and Company Secretary (CLO) and the Chief Financial Officer (CFO) are the senior management members who have primary responsibility for assessing and managing cybersecurity risks. As such, the Company’s risk assessment, internal audit, information assurance, and incident response organisations report into either the CLO or CFO. The CLO and CFO determine whether an incident is sufficiently serious to be referred to the RELX Disclosure Committee, comprising the Company Secretary and other senior managers, for consultation on required public disclosure.
The Company has established three cross-functional senior-level forums which further coordinate governance over the technology which supports the mitigation of cybersecurity risks: the ISC , the RELX Technology Forum (CTO Forum), and the Security Governing Committee (SGC). Additionally, the RELX Head of Information Assurance Data Protection periodically updates the CLO, CFO, and other senior management members on cybersecurity risks.
ISC
The ISC comprises the RELX Head of Information Assurance Data Protection (Chair) and the Chief Information Security Officer (CISO) from each of the RELX divisions - Risk, Scientific, Technical Medical, Legal, and Exhibitions. ISC members have extensive experience in cybersecurity and contribute extensively to industry cybersecurity threat sharing groups such as FS-ISAC . They have published and spoken extensively on relevant topics at industry events such as RSAC USA and FS-ISAC FinCyber Today and in industry journals published by the International Systems Security Association (ISSA), Directors Boards magazine, the International Association of Privacy Professionals (IAPP) and the Institute of Electrical and Electronics Engineers IEEE.
The ISC, among other functions:
| ● | oversees the development of the RELX cybersecurity strategy; |
| ● | liaises with management and operations across the Company to align cybersecurity objectives with the risk assessment, risk profile, and current and future business needs; |
| ● | assesses, communicates, and advises on the cybersecurity risks to the Company including on the use of legacy systems, emerging technologies, and industry threats; |
| ● | inventories cybersecurity risks and controls in place, and recommends the implementation of mitigating controls; |
| ● | performs the semiannual cybersecurity risk assessment for the Company, including third party service providers, and communicates the cybersecurity risk assessment results to RELX senior management, including the CEOs of each of the RELX business areas; and |
| ● | reviews cybersecurity trends, incidents, and lessons learned on a regular basis. |
The escalation points for the ISC are the CTO Forum and the SGC.
59
CTO Forum
The CTO Forum comprises the Chief Technology Officer of each RELX business area and RELX’s Chief Strategy Officer. The current Chair of the CTO Forum is the Chief Technology Officer of the Risk business. He was previously Vice President of Technology, LexisNexis Insurance Solutions and has also held technology executive positions at ChoicePoint, Paragon Solutions, Primus Knowledge Solutions, and McKesson. He holds a bachelor’s degree in electrical and electronics engineering from the Birla Institute of Technology and Science, Pilani, a master’s degree in cybersecurity from the Georgia Institute of Technology, and completed an advanced management programme for executives at MIT Sloan School of Management. The CTO Forum focuses on technology and cybersecurity strategy, talent, and cross-business collaboration on these issues. The CTO Forum requests and receives regular updates on responsibilities such as cybersecurity issues, technology talent acquisition, procurement, and critical suppliers. It receives regular cybersecurity governance, operations, and incident management updates from the Chair of the ISC, and annual briefings on the state of cybersecurity from the entire ISC.
SGC
The SGC comprises RELX’s Chief Legal Officer (Chair), Chief Compliance Officer, Chief Strategy Officer and Chair of the CTO Forum, and the Chair of the ISC. The primary governance function of the SGC is to review overall cybersecurity strategy and serve as a point of escalation for cybersecurity programme resource allocation and project prioritisation decisions. The SGC receives regular briefings on the same topics as the CTO Forum, as well as risk assessments and project updates on non-technology related cybersecurity risks, such as business processes for incident response and verification programmes for customer access to sensitive data; and adjacent risks, such as compliance.
60
PART III
ITEM 17: FINANCIAL STATEMENTS
The Registrant has responded to “Item 18: Financial Statements” in lieu of responding to this Item.
ITEM 18: FINANCIAL STATEMENTS
The information set forth under the headings ‘Consolidated income statement’, ‘Consolidated statement of comprehensive income’, ‘Consolidated statement of cash flows’, ‘Consolidated statement of financial position’, ‘Consolidated statement of changes in equity’ and ‘Notes to the consolidated financial statements’ on pages 166 to 211 of the RELX Annual Report and Financial Statements 2023 is incorporated herein by reference to Exhibit 15.2.
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of RELX PLC
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of RELX PLC (the ‘Group’) as of December 31, 2023 and 2022, the related consolidated income statements, statements of comprehensive income, cash flows, and changes in equity for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group at December 31, 2022 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Group's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 14, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Group's management. Our responsibility is to express an opinion on the Group’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Uncertain tax positions
Description of the Matter
As more fully described in note 9 to the consolidated financial statements, the Group is subject to tax in numerous jurisdictions. Provisions related to uncertain tax positions totaled £173m as at 31 December 2023. The Group’s operational structure gives rise to potential tax exposures that require management to exercise 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. Transfer pricing relies on the exercise of significant judgement as it is reasonably possible for there to be a range of potential outcomes based on the Company's
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interpretation of the applicable tax laws and regulations. As a result, the Group has recognised provisions for uncertain tax positions, the valuation of which requires judgement.
Auditing the Group’s provision for uncertain tax positions was complex due to the subjectivity in the quantification of the provision, given the range of possible outcomes and the judgement around the trigger for recognition or release impacting the provision and the effective tax rate.
How We Addressed the Matter in Our Audit
Our procedures included obtaining an understanding, evaluating the design and testing the operating effectiveness of internal controls over the tax provisioning process. For example, we tested controls over management’s review of the significant assumptions and judgements and approval of the uncertain tax position provisions recorded.
Our procedures on the uncertain tax positions included, among others, meeting with members of management responsible for tax to understand the Group’s cross-border transactions, status of the significant provisions, and any changes to management’s judgements in the year. We inspected correspondence with tax authorities and external advisors and obtained an understanding of matters considered by management to assess the recorded estimates and evaluated the completeness of the provisions recorded. With the support of transfer pricing specialists, we assessed management’s significant assumptions and judgements to record, release or re-measure provisions following tax audits, settlements and the expiry of timeframes with reference to other similar tax positions the Group has historically held and our knowledge of developments in the jurisdictions in which RELX maintain tax provisions. We tested the underlying schedules for arithmetic accuracy, as well as with reference to applicable tax laws. We evaluated the adequacy of the disclosures related to uncertain tax positions.
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/s/ Ernst Young LLP |
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We have served as the Group’s auditor since 2016. |
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London, United Kingdom |
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February 14, 2024 |
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GLOSSARY OF TERMS
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Terms used in this Annual Report on Form 20-F |
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US equivalent or brief description |
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Accruals |
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Accrued expenses |
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Adjusted earnings per share |
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Adjusted net profit attributable to shareholders divided by the total weighted average number of shares. This provides a measure of the Group’s earnings per share that is comparable from year to year. |
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Adjusted net profit attributable to shareholders |
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Net profit attributable to shareholders before amortisation of acquired intangible assets, other deferred tax credits from intangible assets and items treated as exceptional, acquisition-related items, net interest on the net defined benefit obligation, disposals and other non-operating items. This provides a measure of the Group’s profitability after tax attributable to shareholders. |
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Adjusted operating margin |
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Calculated as adjusted operating profit divided by revenue. This is a key financial measure used by management to evaluate performance and allocate resources |
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Adjusted operating profit |
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Operating profit before amortisation of acquired intangible assets, acquisition-related items, and grossed up to exclude the equity share of finance income, finance costs and taxes in joint ventures and associates. This is a key financial measure used by management to evaluate performance and allocate resources and is presented in accordance with IFRS 8 — ‘Operating Segments’ |
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Allotted |
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Issued |
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Associate |
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An entity in which the Group has a participating interest and, in the opinion of the directors, can exercise significant influence on its management. |
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Called-up share capital |
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Issued share capital |
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Capital and reserves |
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Shareholders’ equity |
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Cash flow conversion |
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The proportion of adjusted operating profits converted into cash |
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Constant currency |
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Calculated using the previous financial year’s full-year average and hedge exchange rates. This provides a measure of year on year growth excluding the impact of exchange rate movements. |
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EPS |
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Earnings per ordinary share |
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Invested capital |
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Net capital employed, adjusted to add back accumulated amortisation and impairment of acquired intangible assets and goodwill, to remove non-operating investments and the gross up to goodwill in respect of deferred tax, and other items. This is used to calculate the return on invested capital. |
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Investments |
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Non-current investments |
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Freehold |
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Ownership with absolute rights in perpetuity |
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Interest receivable |
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Interest income |
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Net debt |
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Gross debt, plus related derivative financial instrument liabilities, less related derivative financial instrument assets, cash and cash equivalents and finance lease receivables. This provides a measure of the Group’s level of indebtedness. |
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Net cash acquired |
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Cash less debt acquired with a business |
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Operating costs |
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Cost of sales plus selling and distribution costs plus administration and other expenses |
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Portfolio changes/effects |
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Changes in the portfolio relating to acquisitions, disposals and assets held for sale |
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Prepayments |
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Prepaid expenses |
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Profit |
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Income |
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Profit attributable |
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Net income |
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Share based remuneration |
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Stock-based compensation |
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Share premium |
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Premiums paid in excess of par value of ordinary shares |
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Return on invested capital |
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Post tax adjusted operating profit expressed as a percentage of average capital employed. This is a key financial measure used by management that demonstrates the efficiency of the use of capital. |
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Revenue |
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Sales |
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Underlying growth |
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Underlying growth rates are calculated at constant currencies, excluding the results of acquisitions until 12 months after purchase, and excluding the results of disposals and assets held for sale. Underlying revenue growth rates also exclude exhibition cycling. This is a key financial measure as it provides an assessment of year-on-year growth excluding the impact of acquisitions, disposals, exhibition cycling and exchange rate movements. |
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ITEM 19: EXHIBITS
Exhibits filed as part of this Annual Report on Form 20-F, or incorporated by reference
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1.1 |
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2.1 |
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2.2 |
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2.3 |
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2.4 |
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4.1 |
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4.2 |
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4.3 |
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4.4 |
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4.5 |
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4.6 |
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4.7 |
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4.8 |
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4.9 |
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4.10 |
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4.11 |
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4.12 |
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4.13 |
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4.14 |
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4.15 |
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4.16 |
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8.0 |
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List of subsidiaries, associates, joint ventures and business units |
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12.1 |
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12.2 |
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13.1 |
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13.2 |
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15.1 |
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Independent Registered Public Accounting Firm’s Consent – Ernst Young LLP |
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15.2* |
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15.3 |
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17.1 |
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97.1 |
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101.1 |
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The following financial information for RELX formatted in Inline XBRL: (i) Consolidated Income Statement for the years ended December 31, 2021, 2022 and 2023; (ii) Consolidated Statement of Comprehensive Income for the years ended December 31, 2021, 2022 and 2023; (iii) Consolidated Statement of Cash Flows for the years ended December 31, 2021, 2022 and 2023; (iv) Consolidated Statement of Financial Position at December 31, 2022 and 2023; (v) Consolidated Statement of Changes in Equity for the years ended December 31, 2021, 2022 and 2023; and (vi) Notes to the Consolidated Financial Statements |
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104 |
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Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101). |
The total amount of long-term debt securities of the Group authorised under any single instrument does not exceed 10% of the total assets of the Group. The Registrant hereby agrees to furnish to the SEC, upon its request, a copy of any instrument defining the rights of holders of long-term debt of the Group or any of the businesses for which consolidated or unconsolidated financial statements are required to be filed.
The agreements and other documents filed as exhibits to this Annual Report on Form 20-F are not intended to provide factual information or other disclosure other than the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representation and warranties made by the registrant in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs at the date they were made or at any other time.
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Certain of the information included within Exhibit 15.2 is incorporated by reference in this Annual Report on Form 20-F, as specified elsewhere in this Annual Report on Form 20-F. With the exception of the items and pages so specified, the RELX Annual Report and Financial Statements 2023 are not deemed to be filed as part of this Annual Report on Form 20-F. For the avoidance of doubt, other information mentioned in or contained within the RELX Annual Report and Financial Statements 2023, including the content of the RELX website and other pages or sections of the RELX Annual Report and Financial Statements 2023 referenced, but not contained, in the items and pages so specified are not deemed to be filed as part of this Annual Report on Form 20-F. |
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SIGNATURES
The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorised the undersigned to sign this annual report on its behalf.
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RELX PLC |
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Registrant |
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By: /s/ E ENGSTROM |
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E Engstrom |
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Chief Executive Officer |
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By: /s/ N LUFF |
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N Luff |
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Chief Financial Officer |
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Dated: February 22, 2024 |
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