Earnings Call: H1 2021

Jul 29, 2021

Good day and thank you for standing by. Welcome to the RELIX Interim Results 2021. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand over the call to your first speaker today, Mr. Eric Engstrom. Thank you. Please go ahead. Good morning, everybody. Thank you for taking the time to join us on our call As you may have seen from our press release this morning, we delivered a strong first half with underlying growth trends Across almost all market segments, we're turning to the improving trajectory that we saw in the early part of 2020. We made good operational and strategic progress, investing behind our strategic priorities to drive organic growth Development of analytics and decision tools across segments with recent acquisitions performing well. We also continued to build on our strong ESG performance, making good progress on many of our internal metrics and maintaining In the first half, revenue growth at constant currencies Was 4%. Adjusted operating profit growth was 11%. Adjusted earnings per share growth of 5%. Our 3 largest business areas all delivered improved underlying revenue growth in the first half. So let's look at the results of each business area. In risk, underlying revenue growth was 10%. Underlying adjusted operating profit growth was 12%. Transactional revenue, which represents around 60% of the divisional total, grew in the double digits in the first half. Volumes in most segments Subscription revenue, which represents around 40% of the divisional total and where last year's disruption Was more second half weighted, has seen a more recent return to historical growth rates, driven by strong new sales across markets. Business Services represents nearly 45 percent of divisional revenue. Double digit revenue growth was driven by strong demand across almost all market segments. Fraud and Identity, our leading digital identity solutions performed particularly well with both ThreatMetrix And email age continuing to see growth of around 30%. In Financial Crime and Compliance, last alignment of acuity within business services has significantly strengthened our customer proposition through the sharing of technology platforms and data and will enable an accelerated rollout of new decision tools. In insurance, Representing nearly 40% of the divisional total, strong revenue growth was driven by the continued rollout of enhanced analytics and expansion in adjacent verticals. Our customer markets have seen a recovery since the disruption in March April last year. U. S. Auto insurance shopping growth But overall for the first half was in line with recent years. U. S. Driving activity has continued to recover and is currently over 95% of 2019 levels, up from a low point around 50% in April of last year. The claims volumes are following a similar trajectory. In adjacent verticals, we've seen strong growth in home and life insurance In Data Services, which represents just over 10% of divisional revenue, we saw continued strong growth in Petrochemicals and Agriculture, whilst other segments such as Aviation are now in the early stages of recovery. Government representing around 5% of divisional revenue. Strong growth was driven by the continued expansion and rollout of Analytics and Decision Tools across both state and local and federal markets. Going forward, we expect underlying revenue growth slightly above historical trends, with adjusted operating profit growth broadly matching underlying revenue growth. In STM, we saw underlying revenue growth of 4%, Drilling by continued good growth in electronic revenue, which represented 88% of the total Print revenue, representing 12% of the total, stabilized, following particularly steep declines in the first half of last year. In primary research, the number of articles submitted to our journals remained at last year's elevated levels And strong growth in the number of articles published drove market share gains in both subscription and open access payment models. As you know, we're always very happy to serve our customers with whatever payment model they prefer, and our aim is to help them achieve their objectives in a way that gives Our relative quality advantage in each sub segment has been consistently maintained or increased, And growth in article usage has remained strong on all key measure. So far this year, We have launched another 55 Orthopace Open Access titles, bringing our Open Access journal account to over 560. Databases and Tools and Electronic Reference, which represents over a third of divisional revenue, saw strong growth in Medical Education, Clinical Solutions and Electronic Reference. This was driven by increased adoption of digital tools, including advanced simulation training, Continued geographical rollout of clinical key, strong growth in evidence based decision support tools, including clinical PAC. Print books, which now represent a little over 5% of divisional revenue in the first half, stabilized after last year's unusually steep first half declines. Going forward, we expect underlying revenue growth slightly above historical trends, with underlying adjusted operating profit growth slightly exceeding underlying revenue growth. In Legal, Underlying revenue growth was 3%, with underlying adjusted operating profit growth ahead of revenue growth at 6%, reflecting further process innovation. Electronic revenue, representing 88% of the divisional total, has continued to grow well And print revenue declines moderated following unusually steep declines in the first half of last year. North America, which accounts for around 2 thirds of divisional revenue. Growth across all key market segments It was driven by the development and rollout of legal analytics and new integrated functionality. Last September, we launched Lexis Plus Using machine learning and natural language processing, Unite multiple legal research and analytics functions delivered through a modernized user interface. We've seen positive uptake across all customer segments With almost all new customers and the majority of renewing customers opting for Lexus Plus. Trends in our major customer markets are stable, renewal rates holding up well, new sales currently running ahead of recent years. Going forward, we expect underlying revenue growth in line with or slightly above historical trends, with underlying adjusted operating profit growth exceeding underlying revenue growth. Exhibitions revenue Defined 36% in constant currencies for the first half as a whole, but has been running ahead of last year since April. The physical events that we were able to hold in the first half have mostly been in China and Japan and more recently in the U. S. And elsewhere. Nick will take you through the details of exhibitions, revenues and costs in a few minutes. Going forward, revenue outcome for the full year will depend on the pace and sequence of reopenings. The operating results will benefit from a Our operational and strategic priorities, which are the drivers of our improved performance, are unchanged. In the first half, we continue to make good progress across market segments our number one strategic priority. The organic development of increasingly sophisticated analytics and decision tools And be more productive. Our organic growth strategy is supported by targeted acquisitions. In the first half, we made 5 small acquisitions, and recent acquisitions continued to perform well. We remain committed to our corporate responsibilities, drawing on the unique contributions that we're able to make as a business. And in the first half, we saw further improvement in our internal metrics and in the external recognition of our efforts. With that, we'll now hand over to Nichola, our CFO, who will talk you through our results in more detail. I will be back afterwards for a quick wrap up and our usual Q and A. Thank you, Eric. Good morning, everyone. Let me start by providing more detail on the group financials. Revenue growth for the period was 4% at constant currency, Reflecting the strong performance of risk, STM and legal. Adjusted operating profit growth was 11% at constant currency, With all four business areas showing improved results, the adjusted operating margin improved to 30.1%. The improved profit performance flowed through to adjusted earnings per share, which were up 10% at constant currency. Cash conversion was strong at 112%, contributing to a significant reduction in leverage to 2.8x, including leases and pensions, down from 3.3x at the end of 20. Given the strong overall performance, we've been able to increase the interim dividend by 5% to 14.3p. Looking at revenue, underlying growth trends in our 3 largest business areas return to the improving trajectory we saw in the early part of 2020 with risk at 10%, STM at 4%, and legal at 3%. Given the extent of event rescheduling during the year, underlying measures are not meaningful for acquisitions for the first half and hence not for the group as a whole. Portfolio changes were a small net positive for risk, but within the roundings, a small positive for SDN and a small negative for legal. We generate the majority of our revenues in dollars of course. And with sterling stronger on average against the dollar as well as the euro compared with the first half of last year, Currency movements were a drag on sterling reported growth rate of between 4% 8% with group revenue down 3% in sterling. On adjusted operating profit, risk and legal delivered underlying growth slightly ahead of underlying revenue growth With some benefit from phasing of expenses, for STM, adjusted operating profit growth was in line with revenue growth. Portfolio effects on adjusted operating profit were broadly neutral in the 3 largest business areas. Exhibitions improved its operating results Despite lower revenues with an adjusted loss of $48,000,000 compared to $66,000,000 in the prior first half, You will recall that in 2020, we incurred exceptional costs in exhibitions, with €51,000,000 falling in the first half, mostly relating to cancer events. The first half twenty twenty comparative figure shown here excludes that exceptional cost. There were no exceptional costs in the first half of this year. Including that improved results from exhibition, at constant currency, group adjusted operating profit was up 11%. Currency movements were a drag to profit growth, similar to the drag on revenue, but group adjusted operating profit was still up by 3% to just over £1,000,000,000 The 3 largest business areas each saw an increase in margin, the largest being in legal, which continued to benefit Process innovation and tight control of costs. With the reduced loss in exhibitions, overall adjusted operating margins for the group improved by 1 8 percentage points to 30.1 percent. Looking at exhibitions in a bit more detail, revenues were of course down on the prior half year, But as Eric mentioned, they have been running ahead of last year since April. We have been out to operate the business with a significantly lower cost base As shown by the comparison with the H1 2019 figures shown on the slide, direct costs were down of course reflecting the event program that we were able to run-in the first half. On indirect costs, you will recall that historically those rounds around £400,000,000 per annum and we were targeting a reduction of around 25% on an ongoing basis. We achieved that and actually ran a little better than the target level in the first half with some benefit from the phasing of costs within the year. The first half result also benefited from an increased contribution from joint ventures, mainly in China where we're able to operate largely as normal. So overall, despite the lower revenue, the operating loss was reduced. Looking into the second half, in July, we have run events in U. S, Japan, China and a couple of other countries. Those events will enable us to deliver revenue for the month of close to £50,000,000 And a positive operating result, consistently with the roughly breakeven position we've been running at since April. We continue to be flexible with the program for the remainder of the year, Ready to hold face to face events as and when countries and venues open up. Going back to the group numbers, here is the adjusted income statement showing the constant currency growth of 4% in revenue and 11% in operating profit. That operating profit growth of 11% flowed through to growth in profit before tax of 13%, aided by a lower interest charge. The interest expense benefit From lower average net borrowings and lower average interest rates compared to the prior period, the effective interest rate on gross debt was 2 1%. The tax charge was €185,000,000 with an effective tax rate of 19.4%. Both the first half of twenty twenty one And the first half of twenty twenty benefited from non recurring tax credits, which resulted in effective rates below our normal ongoing rate, Albeit to a lesser extent in the first half of this year, hence the increase in effective rate. Net profit was $771,000,000 up 10% At 40p, adjusted earnings per share was also up 10% at constant currency and up 2% at reported exchange rates, Reflecting the relative strength of sterling compared to the prior first half. This next slide shows you how we reconcile from adjusted to reported profits. The biggest change in the reconciliation is that last year we had the exceptional charges in exhibitions. As I mentioned, dollars 51,000,000 of those exceptional costs were incurred in the first half of 'twenty, with no exceptional costs in this year's first half. Also amortization of acquired intangibles was lower at 143,000,000 And there was a larger net gain on disposals of €39,000,000 mainly relating to the venture portfolio. Overall reported profit before tax was €825,000,000 Up 24 percent with net profit of $664,000,000 up 21% and reported EPS of 4.5p also up 21%. Turning to cash flow, group CapEx was 150,000,000 Equivalent to 4.4 percent of revenue. Cash conversion was strong at 112%, benefiting from some phasing, Including the timing of CapEx spend and working capital movements, cash interest paid was $72,000,000 in line with the income statement charge. The higher amount in the prior period related to the cash element of the charge and early redemption of some long term bonds in the first half of twenty twenty. Cash tax paid of $142,000,000 was lower than the prior year with a new UK tax installment regime resulting in 1 off higher payments in the prior period. This year's cash tax has benefited from some favorable timing of payments, which will reverse in the second half. For the full year, we expect cash tax to be broadly aligned with the adjusted tax charge. After some exhibition of exceptional costs incurred in 2020 But paid in 2021 and lower acquisition related items, total free cash flow was up over $300,000,000 on the prior year to 886,000,000 And here's how we use that free cash flow. We had limited acquisition spend in the first half with total consideration of $46,000,000 relating to 5 small transactions. You will recall the mark to market gain we booked on the Panaminteir stake held by our venture fund in 2020. We have now sold that stake, which makes up all of the disposal proceeds of $175,000,000 in the first half. Total dividend payments were 634,000,000 Being last year's final dividend. Through a combination of strong operational cash generation, net M and A proceeds and a currency translation benefit, Net debt has come down by almost $600,000,000 in the first half to $6,300,000,000 Leverage also benefited from the improvement in operating profit, which flowed through to EBITDA. Including leases and pensions, the ratio of net debt to EBITDA calculated in U. S. Dollars Well, the 2.8 times down from 3.3 times at year end, but still above our historical range of 2.1 times to 2.5 times. With that, I will hand you back to Eric. Thank you, Nick. Just to summarize what we covered this morning. We delivered a strong first half with underlying growth trends Across almost all market segments returning to the improving trajectory that we saw in the early part of 2020, And we continue to invest behind our strategic priorities. Going forward, based on the improved performance in risk, STM and Legal in the first half, we expect full year underlying growth rates in revenue and adjusted operating profit as well as Okay, ladies and gentlemen, we will now begin the question and answer Our first question is from the line of Adam Berlin from UBS. Thank you. Please ask your question. Hi, good morning, Eric and Nick. It's Adam Berlin from UBS. I've got 3 for me. The first question was on RBA. I just wanted to understand, are we seeing A sequential quarter on quarter improvement in revenues starting, say, in Q3 last year. And do you expect that to continue into Q3 and Q4 of this year? Or is it just an effect of the easy comps is why the organic growth is so strong? That's the first question. The second question is on exhibitions. Can you give us a sense of the shows that ran in July where you said they generated £50,000,000 Are those revenues broadly in line with 2019, still substantially down? Can you give us a sense of what that gap is versus kind of normalized Revenue performance for the shows that did run-in July. And the third question is on STM. There was some press that you'd sold some publications in Elsevier To Mark Hallum Group. Can you just tell us if that's material? Will that have any effect on the revenues of STM in the second half? And was that impact of that excluded from the underlying revenues reported by STM in the first half? Thanks very much. I will hand the second question to Nick. You After I'm done with the first and the third here. When it comes to risk, what we see It's an improvement, as we talked about earlier, in transactions that came started to come through already in the second half of last year and continued to strengthen. And at the same time, though, we saw subscriptions, the negative impact coming through later So it's a combination of the balance of the 2 that has created the results that we see now. And So in terms of quarter on quarter, we can have Nick later talk to you more specifically about it, but it's not a quarter on quarter It's a question of what you compare to during last year where the Q1 was not disrupted significantly until the end and to the middle of March basically and then significantly disrupted for transaction in the second quarter. Then in the 3rd Q4, the impact came through a bit of subscriptions. Subscriptions then was impacted in the 1st part this year and now coming to And growing again at the beginning of the second half or at the end of the first half this year. So it's a balance of the 2. And as you can see last year, the growth rate was not significantly higher in the second half than it was in the first half when you ran those 2. When it comes to STN, the piece that we sold this year was very, very small, immaterial when it comes to STN. It's an immaterial tale of some of these commercially corporate oriented sort of magazine oriented sectors. So it's immaterial Yes. And Adam, on the exhibitions and the July shows, There's quite a range of outcomes in terms of the performance relative to the prior addition. Some are actually up, others Quite a long way down, and we've been seeing that all year. I mean, China typically is doing well, and it's often events are above the previous edition, Sometimes below, but sometimes above depending on how international they are. In other markets, I mean, you've got all sorts of dynamics. Some of these events, we've changed the city, we've changed the time of year. It's you almost sort of can't compare them. But we still felt it was worth holding the events and giving the customer what service we're able to provide them. So There's a big wide range. I'm not sure you can read anything into how they're doing for future reference because I think it It much depends on the specific circumstances of that event, that city, what restrictions there are, what limits there are on capacities and so on. So big wide range. Nick, can I just follow-up just on 2 of the questions quickly? So just on risk, can you just Are we seeing Q on Q improvements in absolute revenue in dollars, I suppose, or not? And on Exhibitions, can you just maybe ask it a different way then? How dependent are you on the return to kind of international travel to get revenues back to 2019 levels. Yes. I mean, On as Eric is saying, on risk, absolutely, the revenues are improving The and going up, the subscription side had a very different pattern last year. Obviously, it held up initially better, but was then impacted, has taken longer to come back. The transactional side is, As Eric was describing, very dependent on what was in the how much disruption there was in the Prior period, but if you look at the sort of the sequencing of it, we continue to grow, we've got good new sales, good momentum. So Definitely. And on exhibitions, yes, I mean, it's clear that the China, U. S. Tend to be more domestic events in terms of the audience is More domestic, some over the international. If there's a more international component to it, that's clearly tougher. But that's going to depend going forward, that's going to depend on how restrictions are listed, what travel constraints there are. And I'm not sure you could read a whole amount into what's happened in these shows we've just run. I mean, some of them, particularly the U. S, is only just reopening. So it's very early days to see how things We'll develop from here. But as we start most of our audience is domestic across the As a whole, so clearly, we'd like international travel to be easier and some of the shows it's very, very important, but for others it's less important. Thanks Nick. Thanks, Ed. Thank you. Our next question is from the line of Nick Dempsey from Barclays. Thank you. Please I've got 3. So first one, in both legal and STM divisions, we've got print Shrinking pretty fast in the mix. And you've seen analytics style offerings. Your comment is pretty positive about those in the first half. But when When we look forward beyond 2021, does that give you a bit of confidence that you might start to see slightly better organic revenue growth in those two divisions And you saw in 2011 to 2019. Second question, You mentioned correct metrics and I think emailage holding 30% organic revenue growth, So it's still maintaining very strong growth there. They must be getting a little bit larger in the mix. Aren't they at a level where If they maintain that strong growth, they can actually move the needle on the whole of risk and you could see that that moves up a bit or are they still too small to have Much of an effect. And third question, so you mentioned the £50,000,000 of revenue per exhibition in July. You give us a bit of context in terms of your slate of planned events for the second half? How important July is? So is it a big month in China and Japan? I think September through November are normally quite a big month for you, but I'd be interested to see some context on that 50,000,000 I will hand the third question to Nick again here, but let me take the other 2. In Legal and STM, you're absolutely right when you're saying that there has historically been a print drag. And in the first half, That print drag, you can calculate basically that typically in STN that print drag might be about 10% of the business So 10% worse than the average, showing average year, it's a percentage point Brent drag in the first half that was sort of absent this year because it was stabilizing. In legal, the difference is for Smart the World was the difference was much smaller this year, so maybe not that material, but a little bit of a benefit. The real benefit that's driving the fundamental improvement in legal and STM growth rates, The fundamental driver is what we talked about earlier and which has also rollout of increasingly sophisticated analytics and decision tools that add more value to our customers. And because we are Continuing to move that across our customer base, we already saw that coming through a bit in improved growth rates in the early part of 2020, Which we highlighted in the beginning of last year. And then the COVID pandemic hit and I think many of our markets were slightly Disrupted and it feels that we're now heading back on that improving trajectory on the electronic reference and decision tool side. Clearly, the print drag has a bit of an impact on the growth rate in any 1 6 month period. But over time, that print drag Continues to shrink a little bit and while it's a little bit volatile, it should over time reduce, of course. And Our objective is, in each one of our segments, to drive an acceleration or an improvement in the underlying fundamental long term growth rate All of each division. On the second question, in risk, I think you specifically talked about our digital identity tools that are continuing to grow about 30% organically. Yes, they are getting bigger, of course. They're probably roughly 30% bigger now than they were a year ago. And they are holding up very well at This point in time, they're continuing to grow at that rate. I would expect that as they get bigger, the actual organic percentage point growth rate It's likely to start to fade a little bit even though they're going to continue to grow very strongly. They're very well positioned in the market. I think they're leaders And they're in growing segments. But I think it would be realistic to expect that growth rate to gradually slow a little bit as they get larger. But They should, of course, have an impact on the overall growth rate of risk. But the reason we're highlighting them is because their acquisitions internally organically developed Tools that are in the digital identity section are also growing very well. And of course, we hope Yes, Nick. And on the thermal and acquisitions, Yes. I think July is normally a key month in the year for exhibitions, given the sort of pattern of locations But this year, it's certainly been our most active month. If you look forward The exhibition industry, August is generally quiet. As you say, September to November, it would typically Pickup again, and that would be the busy period. So we clearly have a lot of events scheduled, but We'll have to see how markets open up and what which ones we're able to run. And At the moment, it's U. S, China, Japan and a few other countries, and we'll see whether we have the opportunity to run events elsewhere in the world. Thanks, guys. Thank you. Next question is from the line of Sam Khazrat from Exane. Thank you. Please ask your question. Thank you, and good morning, gentlemen. I have 2 or 3 questions as well. The first one, we've seen your free cash flow go up by €300,000,000 We've seen your leverage Down by half a turn. We've seen operations normalizing. So what other key criteria are you looking for in order to resume the share buyback program? Secondly, can you talk about the adoption of Lexis Plus? And to what extent Is the improvement in new sales directly related to the rollout of Lexis Plus? And lastly, I think in February, you suggested that you were planning on running 75% of the shows that you had At Rx in 2019, can you update us on that number? Are you still looking to run 75% of the shows Well, I will hand over to Nick to answer the questions around the first question on cash flow, And you might as well also address the question of exhibitions while your guys come back and answer the second one. Yes. Sami, on the share buyback, as you know, that's our mechanism for returning surplus capital to shareholders, Clearly, with the leverage having stepped up due to the reduction in the EBITDA that we had last year, We didn't have that surplus capital, hence the buyback was suspended and we said we won't resume it in 2021. But as you point out, the leverage has come down. It's still above our historic range, but it's come down quite quickly. So we'll have to see how that evolves From here, clearly, rest of this year, exactly how the business performs and What acquisition spend we might have are the probably the biggest variables, but we'll see, and then we'll make a judgment So next year, around that. But at the moment, obviously, leverage is still a little bit elevated. I'm focused on that. On your question on the number of events and exhibitions, I don't think we said we were expecting to run 75% and I think we just said, well, that's the number in the calendar, to be clear. But they definitely won't happen if they're not in the calendar. It's lower than that now. Obviously, we've been rescheduling and pushing events So later in the year, but not all of them there isn't room in the calendar of the industry, if you serve, to hold them all. So It's in terms of numbers, it's a fair bit lower than that now. But I think as we said, The focus is on the markets where we can operate today and looking to see when other markets open and What opportunities we've got. There's plenty of events still in the calendar, but the key is The ability to operate in different countries, and we'll see how that develops. Thank you, Nick. And on LEGO, Lexus Plus, as you know, was launched last year. It's been very well received by our customers. We continue to roll it out and almost all new customers opt for Lexus Plus. And I would say that when we have renewal conversations, the majority of our customers who renew also offer Lexus Plus. And as we've said, that's an integrated offering that integrates different types of analytical tools on different And when customers opt for that, they often use it so that they have Increased access to and more usage of these different tools that are now integrated in a more easy to use way. And I do believe that The customer feedback and the success of that is a contributing factor, a significant contributing factor to the improvement that we've seen in new sales and therefore what we perceive as an improvement in the underlying growth trajectory of EPIC. Thank you, Eric. May I follow-up with 2 quick ones on Lexis plus When you see new customers opting for Lexis plus Do you see new customers moving away from other established research platforms? Or are you gaining share With Lexis plus in your view? And secondly, when you see existing customers opt for Lexis plus Do you see an increase in the ARPU of these customers? Thank you. When it comes to share of customers in the legal market, it's Often more complicated than a straight share question because most of the large customers, most of our large law firm customers as well as corporate customers Use us as well as other providers. And it's often a question of for which purposes they use them and how much they use them. So it is not as simple as sort of are we taking or losing customers. That's often a small part of it. We believe that we are getting increased attention and increased usage and that our customers And I think that's the main driver. So when customers opt for Lexus Plus, they tend to therefore use a broader set of our analytical tools and content sets and therefore end up with an increased spend with us. We, of course, don't have direct insights into what their spending is with others, Thank you very much, Eric. Thank you. And our next question is from Matthew Walker from Credit Suisse. Thank you. Please ask your question. Thanks. Congratulations on the results. Good morning. First question is, I guess the sustainability of the growth, you've been talking about Cision Tools Analytics for a while. What is the sustainability of better growth compared to history going into next year and the year after that? The second question is on which products would you point to in analytics which are driving the growth? And where are you on the adoption curve for those products? That would be interesting to know like clinical key or clinical path, how many hospitals are you in, what percentage of doctors in the U. S. Use this kind of stuff? And for some of your analytics tools in STM, what's the university penetration compared to the Journal penetration, which obviously is probably nearly 100%. And then the final question is, are you roughly looking for breakeven on the event side? I know it's Very unpredictable, but are you roughly looking for breakeven? That's a question for Nick on the event side for this year. On the question of sustainability, we are driving The whole strategic direction of increasing and sophisticated analytics and decision tools that add more value across all our market segments and have been Ending in that direction for a while. The reason we do it that way is because we believe that, that is a Sustainable strategic direction that over time will add more value to the customers and therefore that they will want to use more of our products and Have more of our tools and therefore spend more with us because they get more value by spending more with us. Therefore, we, of course, believe that this is a sustainable strategy. There are always things that happen in the world in different at different times that we can't Such as what happened with the pandemic last year, so it's very hard to predict what exactly will happen in any one year, but we believe that this is a sustainable strategy that should lead to better organic growth over time. Of course, as I said, there are specific events this year's first half That may also have a slight impact, for example, the absence of the print drag, which is a small contributor in STN, but there's still underlying fundamental improvement beyond that. When it comes to specific products adoption curve percentages by each product or by each customer set, That is not something that we are prepared to talk about in public because there are competitive products and we do serve our customers In competition with others. But if you say where are we in general on this transition from reference to I continue to say that in the Risk division, in many of the risk markets, we might be 50%, 60%, 70% in that direction already, and we continue to move down that path. And there is significant growth in the end user Markets there that support that growth rate as well. When we talk about legal and FCN, it's quite possible that we're only sort of 20%, 30% down that in general at this point in time. So I do not believe we're at the beginning, but we're certainly not anywhere near the end. Nick, do you want to cover Exhibitions? Yes. I'm not sure I'm going to give a precise profit forecast for Thanks a lot. Thank you. So our next question is from the line of Tom Singlehurst from Citi. Thank you. Please ask your question. Good morning. It's Tom here from Citi. My line cut out a bit there, so I apologize if you can't hear me properly. But I had a couple of questions. One was on STM, and it was around open access volumes and Submissions and the linkage with revenue. We've seen reports from some universities and consortia of universities that they're in danger of Having sort of already used that full quota of bundled articles as part of transformative deals, I'm just wondering whether you can make any comments on whether this is a widespread phenomenon, whether that's helping sort of short term volumes and revenues from OA journals and or whether that's likely to come through incrementally in the second half and beyond. So that was the first question. And then a second question on events. I recognize this year is highly unusual, but just You talk about flexible management of the remaining 2021 schedule. I'm just interested in what proportion of events you would say are running at the right time of year And how important it is that events get back in sync, I. E, that they not only happen, but they happen at the right time of year And how critical that is to recovering revenues? Thank you very much. I will again let Nick cover the second question of exhibitions, but let me first answer the STM question. Yes. As we said this morning, the open access volumes of articles published for the first half this year continued to grow very strongly for us. That was basically around 50% increase in the articles published so far this year over last year. And what we are seeing is an increase in submissions and in articles published across our full offering of Alternative ways to publish open access off the page, both in terms of customer sets and in terms of geographies and in terms of journals. And as I said, we launched another 55 standalone Open Access Journal. So we believe that the increase that we are seeing is Partly due to the overall market growing and partly due to our increasing market share. So, of course, there are some customers in there that have specific agreements of number of articles and so on. But in the overall numbers for us, that is not a significant proportion or a material factor in the general trend that we are seeing. And Tom, on the events question, I mean, you're right. The schedule is quite disrupted in terms of exactly when things are taking place compared to normal. Sometimes we'll find the new date works just fine and just may carry on with it. But Typically, the dates are important for the relatively relevant industries' overall schedule and program and How it all fits together. So typically, you'd be looking to get them back to the normal time of year. But it is Depending which events do take place this year, it's pretty disrupted in terms of timing, but one understands that and That's what I tell you that. So I think customers are very supportive of us doing that if we can still hold a good event for them. So we'll Most likely, most of them will be moving back at some point. Very clear. Well, one well, 1.5 follow-up. On the You talked about 50% increase in articles published. I was wondering whether you have a similar figure for the growth in submissions OA. And then on the events So I mean, do you think it will take all the way through till 2023 to get everything back to the right time of year? Okay. Is that possible in 2022 as well? When it comes to the Submissions in the first half this year to sort of open access submissions, we had a significant jump last I think it almost doubled because we had such a large spike in the beginning in the middle of the year, should say from the middle of the first half all the way through towards the middle of the second half. But even on top of those numbers, I think a quarter of magnitude, about 25%, I don't know the exact number in front of me, but it's roughly that on open access submissions above The numbers that had that very high spike in the first half last year. And then how long does it take to get back to the normal calendar? I think it will depend on Exactly what happens in the remainder of this year to start with and which events do take place and if they've taken place At an unusual time of year for that particular event and what that means for 'twenty two. If you throw in cycling events as well that Take place every year, then it will take a little bit of time to adjust everything and get the calendar back. But That's assuming some normal operating additions and I think we'll have to see how things evolve. That's very clear. Thank you very much and congrats on the results. Thank you. Next question is from the line of Matti Licinor from Bernstein. Thank you. Please ask your question. Thank you. Good morning. First question on ThreatMetrix and Emailage. Now since your identity resolution tools don't rely on 3rd party cookies as far as I understand, Do you think you've had a bit of an additional growth tailwind as the market is expecting the removal of 3rd party cookies? And then on legal, could you just remind us of what are the main customer segments for LexisNexis as you see them? And is there perhaps 1 or 2 of them where you see yourself as having a particularly strong market and or product position? Thank you. I would actually like to make sure you can Explain or repeat your second question there. Was it absolutely clear to me? Could you do that again? Yes, of course. On legal, Could you remind us what the main customer segments for LexisNexis are as you see them? And then if there are any of them where you see yourself as having perhaps a On the first question, in digital identity verification, our digital identity tools Our very sophisticated and very embedded and their recognition of devices and in some of these examples, There are tools that are used and embedded within a financial services institution, for example. And Last time we talked about these numbers in public, we had order of magnitude a bit over 100,000,000 times a day That devices were actually being pinged or checked with a couple of 100 different Digital identity characteristics that are being checked on that device and how that device is behaving and how it has behaved previously In the database of several 1,000,000,000 of devices that we have in our system. So it's a very deep, sophisticated I do not believe personally that sort of the cookie Cookie trend that is going on at the moment has had a significant impact or will have a significant impact going forward. That's, of course, a personal opinion. On legal, the main customer segment, the way we look at it is, of course, we said 2 thirds of legal It's in the U. S. And a third is international. And of course, our large in the U. K, France, Australia, for example, some of those countries. Inside the U. S, we have law firms and we have large law firm segment. We have a smaller law firm segment. We also have corporate legal customers And we have sort of state and government in the U. S. States and local government as well as federal government customers. So we operate across a broad range of Traditionally, we often talk mostly about the law firm customers, but there are several other customer segments as well that use our legal tool And in particular, the legal analytics and decision tools more and more because they help them manage their litigation costs, Managed their legal exposure, helped them manage their legal decision making around those. So it's actually a relatively broad range of customer segments. Thank you very much. Just to clarify on that first point about threat metrics and emailage. Now I understand the sophistication of the tools. So my question was actually, have you had a Positive impact from the impending cookie removal as perhaps clients recognize the relative strength of your identity resolution Versus solutions that rely more on cookies. I actually do believe that the kind of solution we offer is not directly comparable To the ones with cookies. So I do not believe that there has been a significant impact on that because I think we have so far competed in a different segment. I don't think it has been a significant factor, and I don't believe it is likely to be a significant factor. But that's my personal opinion and interpretation of the market Okay. Next question is from Patrick Wellington from Morgan Stanley. Thank you. Please ask your question. Yes. Good morning, everybody. Three questions. First one, we've talked about market share gains in STM. Do you think that's a product of your shift your greater shift towards read and publish deals and open access? You're taking share Clearly, in open access, you're talking about taking share in subscription. Why are you taking share, if you like? And does it extend To your database businesses, if I look at people like Clarivate, they have sort of high single digit growth aspirations in their databases and tools business. Do you have similar? That's the first question, which was around STN. The second one, I think you may have answered this Partly in Matthew's question, but the line was a bit garbled. So what percentage Of the revenues in STM and legal, would you say are now represented by the decision tools and analytics activities. And then my third question is around exhibitions and it's kind of got Three parts really. The first one is, I'm sure Nick gave us the likely profits number for the year, but again, the line seemed to cut out momentarily. So if you could give it to us again. Secondly, on revenue, if July is a £50,000,000 month, could we just simply say, well, August will be about 25, September, October, November about €75,000,000 each, December 50,000,000 again. And we would get to about a short €475,000,000 €500,000,000 for the year. Would that be A reasonable assumption. And then my final one on exhibitions is, Eric, can you update us on its role within the group? You like a nice Subscription based reliable business, you'd like to be a regular compounder as a group. Exhibition has got a lot of very good characteristics. Return on invested capital is very good, but RELX has been producing organic Revenue growth numbers for 25 years now since 1996 roughly, and you've had 6 down years in exhibitions in terms of organic growth in period, including the last 2. So does a business that with a sort of 6 out of 25 Sort of miss rate, if you like, does that sit happily within the RELX Group? I'll start by addressing the STM and legal questions and then we'll hand over the exhibitions to Nick. I'll come back and talk about the last question after that. So Market share in STM. Why do I believe we have an increased market share? I believe that when it comes to In primary research publishing, which is really, I think, what you're asking about first, where in the subscription side, we have had a very high had less of a presence over time. And as we have said before, our objective is in each one of those segments To offer higher quality content and better technology to the platform tools and to do that at a better value or lower effective price to our customers than other major providers. And I believe that if you continue to do that Systematically with the scale that we have, it should be reasonable to continue to increase your market share a little bit on an ongoing basis. And think we continue to do that this year on the subscription side. When it comes to Open Access, the main driver of that is that we have now Applied that methodology for the last few years, also the spinning off and creating author pays, open access journals as well as other types of open This is publishing alternatives across the different market segments and the different quality tiers, and we are approaching that with a similar strategy, which is again to target higher quality, better platform technology tools and a more effective better value And because we started to do that, I would say, slightly more recently in Open access that we did in subscription, you can continue to see that we're growing at a faster rate than the market in open access. That's The question of does that change the rental to specific deals? I think the share of those deals is still relatively small. I think we are very happy to serve our customers Whichever published model they prefer or whatever combination of published models they prefer, whatever they prefer to call them. So clearly, I believe that when we work with our customers and For them, what they would like as a positive contributor, but I think our fundamental strategy here is the main driver. 2nd question on STN was does it extend to databases and tools? Our strategy, which is the database and tools, the Directional travel extends to databases and tools. I can't comment on any specific other providers view what the growth rate should be, But our databases tools as well as our electronic reference, as we have said before, they have grown into sort of Strong growth rate for a long period of time, and I think they will continue to do that for a long period of time if we successfully execute on our strategy. And we are now more than a third of the revenue base of the STM division. And of course, that App share continues to increase each year because of the drug and sub segment. You asked a question also on STM and Eagle On what percentage is the analytics and decision tools? And this is a question that we received many times, but it's very difficult to define Because it is not that we sell a reference product and separately sell a decision tool or an analytics tool. Most of the time, what we do is we take our reference tool and increase the proportion of analytical tools and decision tools that are built in or built on top In different sub segments or for different content sets, sometimes those content sets are then sold with the tool integrated and sometimes the tool is sold separately. So it's very difficult to define a sustainable accounting metric here. But I said that I would argue that In the STM and Legal divisions, we're probably order of magnitude 20% or 30% down the road on this journey. And Patrick, I'm sure you didn't miss be giving a profit forecast For the commissions for the remainder of the year. The way I was characterizing it was that, obviously, we had the loss in the first half. But From what we said, you could tell that actually was in the Q1. We've been roughly breaking even since then on the basis of the markets that I'm now open. And we'll have to see what happens through the remainder of the year In terms of other markets opening up or not? And that's we don't know, and we don't know what restrictions will be in place At the time when events in even in the markets we're open today and indeed the markets that are yet to open, We don't know what those restrictions will be when we get there. So we'll have to see. But we have been running at that breakeven position for a few months now. Mike, the answer to your revenue question is much the same. It will depend. You can obviously Susan, if you want, if you want to try and trade a forecast for revenue in the second half in exhibitions, And it will depend on the event calendar and which events, what the particular circumstances are in each of those Geography is when those events come up. So we'll have to see. Okay. On exhibitions growth within RELX, as you know, exhibitions and as you said, exhibitions has been a good contributor on average to organic revenue growth and good returns on invested capital both in terms of organic development and and acquisitions, the way we've done it. Before the pandemic hit, we transferred over several people and several functions from the Risk division Over to exhibitions, so that we could see if we could accelerate the drive in the exhibition industry towards using more sophisticated data sets, More sophisticated analytics and digital decision tools to improve the value, to increase the value that we provide to our customer businesses and Help them do business better. That was the objective, and we thought that would be a 5 to 10 year journey. And I think the pandemic might Have accelerated that digital transition and the use of digital tools and the value of data and analytics in that industry. We will not know if that transition is working as we had hoped or if it has accelerated for a few more years Because at this point, we're 100% focused on supporting our customers through the pandemic and coming out of the pandemic. But in a few years, I think this will be an interesting question to address again when the exhibition market has come back and we see how well The digital tools and the analytics and decision support tools have developed in that segment. It's point though For the next few years, we're very focused on supporting our customers with the X Vision division the way we have it right now and the way we're pushing We can help you with data analytics in the division to our customers at the moment. That's great. Thank you. Thank you. And our last question will be coming from Rajesh Kumar from HSBC, your line is now open. Please go ahead. Good morning. Just on The first half growth, can I clarify that when you say transactional sector, You're not suggesting that there's a delayed revenue from second half last year, which have moved to first half? Can you just confirm that in FTM, in risk and legal, The growth we are seeing is, as it is in Q2 terms, That does not include a large flush of backed up demand from 2020. The second question is a follow-up on the exhibition side. Just on when you talk Your division heads, what sort of color are they getting on forward bookings in the sense The interest from various participants for 2021, are they seeing the Same level of discussion that they were seeing towards end of 2020 or is it too early to tell on that one? And just on the Tech metrics comment you made earlier that The growth is likely to slow as the base growth. That I'm sure is a mathematical certainty. But are you implying that the dollar growth would slow? Or are you saying the dollar growth remains Similar, but what you see is against a larger base, you start seeing lower percent growth? I will hand the second question to Nick, but first I'll answer the number 1 and number 3 there. We do not believe that there's any delayed revenue or backlog that Artificially inflated the first half of twenty twenty one in any material way or in any specific segment. That's not something we have noticed. So we believe that the revenue growth is what it is and represents in the first half. When it comes to metrics, I do not believe in any way that the dollar revenue growth will slow. The only reason I am saying that the percentage point growth might fade somewhat over time is that even though it's a fast growing segment, Bigger and bigger, the high very high percentage points growth are naturally going to be more and more difficult to sustain. And On a percentage point basis, we do not believe in any way that the dollar growth should slow. It's not the direction of travel that we hope that unit will be on. Understood. Thank you. And the your second question, Raj, is on forward bookings in Exhibitions. We are seeing good appetite actually for people wanting to come to face to face events. The customers are generally keen to see the Events go ahead when we are able to hold them. They're generally working well for them. Clearly, The uncertainty is an issue for people in terms of booking and knowing that they can Whether the event is going to go ahead or not, and depending on what industry you're talking about, sometimes the lead time is To get ready for the event and take your stool to the event and have your product there is longer and sometimes it's shorter, so that can affect people. Generally speaking, there's good appetite. The key variable is, are we able to hold the event Given the restrictions that are relevant to that particular location. Thank you. Thank you very much. Thank you. There are no further questions at this time. Please continue. Thank you all for joining us on Halkor today, and I look forward to talking to you again soon. Thank you. Thank you, speakers. That does conclude our conference for today. Thank you all for participating. You may now disconnect.