Earnings Call: Q3 2017

Oct 26, 2017

Earnings release

Good day, and welcome to the Verix Group 9 Month Trading Update Call. For your information, today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Nick Luff, CFO. Please go ahead, sir. Thank you, Alex. Good morning, everybody. I'm Nick Glass, CFO of Alex Group. And with me this morning is Colin Tennant, our Head of Investor Relations. I'll make a brief introduction, and then I'll hand the call over to questions. As you've seen from the statement this morning, the underlying operating trends across our businesses in the 1st 9 months were similar to those we reported at the half year in July. Underlying revenue growth was 4% overall, and we have maintained positive underlying revenue growth across all four business areas. The outlook for the full year is unchanged, and we are confident in delivering another year of underlying revenue profit and earnings growth. We continue to transform our business primarily through organic development supported by selected portfolio actions. So far this year, we have completed the acquisition of 6 content, data and exhibition assets for a total consideration of GBP 119,000,000 We have also disposed a number of Print Magazine and other assets for total proceeds of £78,000,000 We've also completed £650,000,000 of the previously announced £700,000,000 share buyback, with the remainder to be deployed by the end of the year. Turning to the business areas. Scientific, Technical and Medical underlying revenue growth was 2% with key business trends remaining positive in Primary Research and Electronic Databases and Tools. Print books, which represent about 10% of the division, moderated their decline relative to a weak prior year comparative. Print Pharma promotion revenues, which represent about 5% of the division, returned to historic decline rates, having been stable last year. Risk and Business Analytics grew 8% underlying with strong growth across all key segments. The market environment for U. S. Insurance remained unchanged from the first half, so not quite as favorable as in the 1st 9 months of last year. Business Services and other segments continued to see a positive environment. Legal delivered 2% underlying revenue growth. Market conditions in the U. S. And Europe remained stable, while other international markets continued to grow well. Excluding cycling and timing effects, exhibitions grew 5%, the same as at this point in each of the last 2 years. Overall growth remained good in Europe and strong in Japan and China. The U. S. Continues to see differentiated growth rates with some softness in fashion and jewelry, but good growth elsewhere. With that introduction, I will now hand over the call to questions, Alex. Thank you. You. And we will take an opening question from Samik Kassab of Exane. Please go ahead. Your line is open. Nick. Good morning, Collin. Good morning, everyone. Three questions to start with, please. In the past, you have linked the size of the share buyback to previous year acquisition spending. The acquisition run rate is relatively low compared to the last 5 years. Should we read something into next year's share buyback? Or is it too early to say? Secondly, within Al Sevea, the books are doing better, but the division is still at 2% organic revenue growth despite the fact that book cost you one point last year. So what's offsetting that? And if it's pharma promotion that's offsetting it, can you elaborate a little bit more as to what's going on with pharma promotion? And lastly, still with Elsevier, can you give an update on general contract renewals and how you stand compared to last year? Thank you, Nick. Okay. Thank you, Sami. I think you answered your first two questions. On the share buyback, yes, as you say, our acquisition spend so far this year has been lower than the run rate than the average spend for the full year with Sweden in the last few years. But there's still a quarter to go, so we'll see where we end. The buyback, as you know, we decided to share in February based on where we're at and what the acquisition spend has been in the prior year is certainly a factor in that and where the balance sheet is, etcetera. But we will decide that at the time, as you say, too early to say at the moment. Your second question on STM, as you say, print books certainly was better than it was last year. On the other hand, Farmrock promotion print Farmrock promotion revenues having had a better year or 18 months or so, are now back to the historic run rate of decline. So you've got booked a little better and farmer a little worse. And the overall picture, certainly within the roundings, is the same. And I don't think there's anything particular in Pharma promotion to point to. It is a transactional business. It does vary depending on what pharma companies are doing and how regulation is affecting them and so on. And so we had gone through a period of sharper decline a couple of years ago and then it eased off a bit and now it's back to normal. And your last question on also ICM was on the general renewals. Obviously, at this stage of the year, we're largely done with 2017 renewals. And overall, we are in broadly the same position as we have been the last couple of years in terms of the percentage renewals and indeed in terms of the revenue increases that are built into the renewals that we've agreed. So overall, very much the same as we've seen in the last couple of years. Thank you, Nick. We will take our next question from Nick Dempsey of Barclays. Please go ahead. Your line is open. Yes. Good morning, Nick. Two questions. So first of all, you mentioned Fashion and Jewelry and Exhibitions. Would you characterize that as being some kind of structural problem related to how the retail world is changing, something that UBM have mentioned? Or is it just that you're feeling that those underlying sectors are a bit weaker and they'll come back? And then I suppose are there any other sectors inside your Exhibitions portfolio which touch on that retail world where we should have some concerns going forward? Second question, quite a specific one on STM. So in Germany, we know some universities are P and L as you're accounting for it now? Or do you keep counting the revenue to P and L as you're accounting for it now? Or do you keep counting the revenue because you know you're going to get it at some point when you put together the big deal and that will be backdated? Okay. I mean, the first question, the Fashion and Jewelry segment, look, I mean, I think it's hard to tell distinguish between things that are short term fluctuations that individual sectors are showing and structural changes, we are obviously always adapting our offering to suit different industries and adapt to what they do and how they use exhibitions can change over time. We've seen this in the past. I think a couple of years ago, we were pointing to differentiated growth rates by sector in China, and that's sort of now behind us. So we'll keep adapting and evolving. And when you operate, as we do, 500 plus shows across 30 plus geographies and at numerous different industries we're serving, you'll always have things going on, sometimes structural, sometimes cyclical within industry. And the key for us is to keep changing the portfolio, to keep adapting to what's going on in our own customer markets, to keep launching new shows into faster growing segments and indeed closing down our shows that are no longer the demise, no longer there for. So we'll keep doing that and adjusting accordingly, and that's the benefit of having the breadth and scale we've got. On STM, I think, as you know, I'm not going to comment on any individual country or customer discussion or negotiation. Your question about revenue recognition, clearly, we do, in the early part of the year, make and certainly part of the first half point, we do make assumptions around what is likely to renew and what isn't likely to renew. By this time of the year, though, that's largely academic. We've reached the point where it's immaterial, the assumptions you have to make around that. And so by this stage, it's largely based on the renewals that have actually taken place. That's right. Thank you. We will take our next question from Tom Singlehurst of Citi. Tom here from Citigroup. I had a question on Germany as well actually, I'm afraid. So I apologize about that. But you're not going to give a running commentary, I understand that. Can you at least roughly quantify what Germany contributes to the STM division, so we can at least get a sense of what the sort of order of magnitude in terms of exposure is? And then the second question is, once again, not necessarily running commentary on a deal, but if a deal isn't struck, when would we expect that to be actually kicking into numbers? And then a final question. I think one of the claims in the I think it's either the German or the Dutch dispute is that you charge, I think the quote was 2 to 3 times more than Springer Nature, Wiley and Taylor Francis. So I was just wondering whether you could give us, well, firstly, a sense of whether you recognize that number, but do you have a sense of your relative pricing in the German market or more broadly? Thank you. Okay. Well, Tom, as you rightly say, I'm not going to give any details. And in particular, our customer negotiation, I mean, well, I think if I can help you a bit, the SPM revenue breakdown about the quarter of the SDM's revenue comes from Europe. Obviously, the big countries within that are the U. K, France, Germany. But that and also remember, STN's revenue is not just journals. It also covers the health side of the business. So you can probably make some estimates from that on the scale of any particular country. I think on your last point, I think all our analysis would and I think it's been accepted by a number of third party commentators, and these referred to when we did the U. K. Renewal a couple of years ago. And what they said about it is that we the volume that we offer the customers, the quality that we're offering and that relative to price, we are very attractive compared to other publishers and that's our strategic objective, to offer better value than everyone else. So that's what we seek to do, and I think the independent commentary would support that. We will take our next question from Patrick Wellington of Morgan Stanley. I'll try and steer off to him, but I'll go back to it in a second. Risk had a particularly strong comparative at the 9 month stage last year. It stepped up or at to 9%, and yet you've continued to do a good 8% in this period. At the same time, you don't seem to be wildly infused by the insurance environment. So could you talk around that a little bit more? And then secondly, and I'm not going to ask questions about Germany specifically, but can you remind us how long it took to renew the deals in STM in the Netherlands and the UK? And in terms of Nick's question about revenue recognition, I didn't really understand your answer. So maybe in the context of the UK and Dutch deals, you can say how you accrued revenue in that period and when you recognized revenue in that period. My take from your answer is that you are recruiting or you're recognizing nothing at this stage for the German universities affected, but maybe we can illustrate that with those other examples. Okay. If I take the risk and business analytics question first, You're right, Patrick. The last year, we did point to particularly high transactional volumes in the Q3, and we're obviously lapping that this time around. The mix this year is a little different. It was at the half year point, and that continues to be the case. So we have seen quite a positive environment for the business services and the other segments. The environment for insurance has not been quite as favorable as it was last year, And we can see that and measure that based on the volume of activity going through our existing products that we have out there numerous factors that play into that and how insurance companies are reacting to their own positions in their own marketplace with price changes and the like. But when we can sort of measure it, we can see that and that. Notwithstanding that, of course, we're continuing to roll out our new products and continue to innovate and doing things that give us drive growth regardless of what's going on in the underlying marketplace. But certainly, the balance within the risk division in terms of the underlying market. Support is different to last year and as it was at the first half and it's continued through the Q3. I think on your other questions about the timing of deals, It is true that these some consortium deals, which often 3 year, 5 year deals can make quite big transactions both for us and for the consortium buyers. That does mean they're important negotiations that can sometimes take some time. And it's not unusual to see commentary on them and press commentary on them for 9, 12 month period. So that does happen, but I'm not sure I can give you any additional color than that. And on revenue recognition, I'll try and get across what I said before. But what each year, we do during the first half of the year, when there are lots of renewals and discussions going on, we do have to make some assumptions around what is likely to renew and what isn't, and we seek to do that on a prudent basis and adjust that as we go along. And whilst in theory, that remains the case by now, because most of the renewals are done, The amount where the assumptions we're having to make are largely material. So not a significant factor in our judgments. And then my take, therefore, is they've not renewed. They're not paying. They're getting the stuff on a sort of pro bono basis while the negotiations go on. So from that group of universities, one doesn't recognize revenue at the moment. As you identify, I'm not going to give a running commentary on the specifics of any one customer, and that includes getting into the depths of how we recognize revenue around that. We will take our next question from Matthew Walker of Credit Suisse. Please go ahead. Your line is open. Thanks. Good morning. Two questions, please. The first is, could you give us an idea of what the print decline in STM for the print book the 10% which is print books was for the 9 months compared to the same period last year. Same question for pharma declines as well, because You mentioned historic levels, but just a percentage would be helpful. 2nd question is, we've all seen the data breaches at the credit unions. What measures do you have in place to prevent such a data breach for yourselves? And have you as a result of the other data breaches at other companies, have you taken more measures to ensure that this doesn't happen at RELX? Okay. So the print decline print book decline in STM, I think this time last year, I said that there's a normal range that we've seen for those declines that's been from high single digit to low double digit, and we're at the top end of that range. This year, we are actually below the bottom end of that range. So that gives you the sort of swing we've seen year on year. Pharma, print pharma conversion revenue historically has mid to high ish single digit declines has been What we've normally seen, it did stabilize for a period. Last year's revenue was broadly stable, and now we're back to that more normal long term run rate. In the data breaches, data security, if you look at our risk disclosures as a company, data security is right up there. We do disclose that as a key risk. It's something that's absolutely inherent in what we do. We pay a lot of attention to it. The Board looks at it a lot. The executive committee looks at it a lot. We have teams within the business that are providing assurance over it, conducting testing, etcetera. And most importantly, it is built into our thinking about how we design our products, how we collect our data, how we store our data. And we seek to learn constantly. The threat is evolving constantly. We seek to learn from looking at the external environment. That includes looking at what's happened to other companies, whether in closely associated sectors or otherwise, and always seek to learn from their experiences. And that this can means we're continuing evolving the work we do, including the testing we do. And that's been no different in the last few months than it has been previously in a sense of just always looking to learn and from external things that have happened and seek to test our business for the risk that we've seen manifest themselves elsewhere. We do all that. It remains a risk, and it's something that we pay a lot of attention to. Okay. Thanks a Our next question comes from Ian Whittaker of Liberum. Please go ahead. Your line is open. Thanks very much. First question, I mean, you didn't do this last year as well, but sort of you didn't mention anything in the guidance just in terms of the profit by division, in terms of what you're expecting there. Has there been any change in terms of your commentary on profit growth or margin growth, etcetera, from what you said in the first half on a divisional basis? 2nd of all, just in terms of apologies if I missed this, in terms of Fashion and Jewelry and Exhibitions, did you give sort of how much of your business in those areas actually come or in Exhibitions rather actually come from those areas? Thanks. So your first question on profit guidance. As you rightly identified, we don't include anything on profitability in this statement. Nothing has changed in our guidance from the position that we outlined at the second quarter of the half year results. So no change. Fashion and jewelry, it depends I don't think we've given a precise percentage, but fashion and jewelry, it depends exactly what you count in that category. It's a reasonably mature part of our U. S. Operation. But for the division as a whole, it's more in the 10% to 15% range in terms of depending exactly how you define the sector in terms of its importance. If I can just ask a quick follow-up as well. Just come back to some of your comments in terms of the VistaVision on what you said about insurance not being as favorable as last year. I mean sometimes it can be sort of difficult to characterize these changes. But in terms of those changes, would you broadly describe as more sort of cyclical in nature, I. E. The sort of it's just changed year on year patterns? Or do you think sort of maybe that relates to perhaps more longer term related issues in the insurance industry? It's very hard to identify on a day by day basis exactly what is causing the volumes that flow through our products to change. But I would remind you, I think as pointed out in one of the earlier questions, we did have particularly high transactional volumes within the Risk and Business Analytics division in the Q3 of last year. That includes insurance, of course. And we're now lapping that. So it was always going to be tougher against that comparative. And we do typically see variations in the volumes in insurance for all sorts of factors. And day by day, we see weather coming into play. We see consumer behavior, how that changes, but it can be often be short term factors, and we're not seeing anything different in the pattern from what we've seen over the last few years, just that what looks like normal variation. We will take our next question from Richard Eary of UBS. Please go ahead. Your line is open. Good morning, Nick. Just a couple of questions from myself. Just I don't know, first of all, whether you can give us a little bit more color on the risk side and maybe just highlight, I know there's a lot of assets within that risk business. Just maybe some color in terms of which ones are outperforming, which ones are underperforming and which ones are showing acceleration and de acceleration so we get a little bit more color in terms of what's going on within that business? The second thing is just on Legal. I don't know whether you can find some color in terms of that 2% number. How much of that is physical share gains versus industry growth? That would be great. Okay. So division, I mean, I don't think I would characterize it as particular segments under or outperforming. I think as we said in the statement, all key segments continue to show strong revenue growth. So it's all it's a nuance, if it were, against the year on year and what which parts had more favorable environments and less favorable environments. So the risk division, insurance is a significant part of it. And as we've said and discussed, not quite as favorable the environment there. But elsewhere in risk, we are seeing quite a positive environment. And some relative comments and those segments are growing well last year, they're growing well this year. So it's not a sort of massive swing, but it is just a more favorable environment. Clearly, that a lot of what we do around identity verification and identifying fraud and the underlying external trends in the marketplace and the need for those products is continuing to increase. And the same is true of our products that help customers deal with regulation, whether it's sanctions or anti money laundering and things like that. The overall market environment driving demand for those products is positive, and we continue to see that. In legal, the 2% growth, I don't think we've seen anything change in the underlying market environment. It remains subdued. And I certainly wouldn't characterize market share positions as changing. You certainly couldn't see that from the data in terms of the quite subtle differences in growth that you might see from different businesses. We continue to roll out within our business the new products, introducing more analytics into the legal products, into the customer base there. And that's what our focus is on is what we can control. We are, as we said in the statement, continuing with the rollout of the new platform releases under the new Lexus and the migration across to that is progressing well. So those are the factors that we're in control of and that we're looking to manage to drive the growth in Legal. Nick, maybe just to follow-up on Lexus Advance. I mean historically, you've given some stats in terms of where we are on the migration onto new platforms. Where we're at now in the Q3? Well, I don't think we've given a specific percentage, but we have said that for the U. S. Customer base, law firms in the U. S, we are looking to complete the migration onto New Lexus around the end of the year, and we're on track for that. Okay. Thank you. We will take our next question from Ruchi Malaya of Bank of America Merrill Lynch. Back on STM, I was just reading about ResearchGate, which is this sort of social network for scientists. And you've taken an approach to the threatened legal action and then take down notices for the copyrighted content on that platform. Some other publishers are trying to negotiate a way forward with ResearchGate. Just interested in your views on how you expect that to play out. And then a question on exhibitions. We saw your recent acquisition of MCM, which organizes top culture events that looks a little bit more consumer the the first question on sharing of material and science. I think the first thing to say is our objective is to be very supportive of the sharing of scientific material and to promote the advancement of science through that. And we're supportive of anything that does that as long as it respects the integrity of science and it's sustainable. So we do that. We have very generous sharing policies. Having said that, we do create intellectual property in what we do. And like all industries, there is a need to seek to ensure that people work with that in an appropriate way. And there is often dialogue with particular organizations and companies and websites that share information as to exactly what's appropriate and what's not appropriate. Sometimes that does require a legal process to clarify that, and that's probably as much as I can say. Your second question on the MCM Expo business that we bought, we have developed a good business in pop culture exhibitions, the Comic Con shows, in particular, that we've been developing in the U. S. For a number of years, we have expanded that internationally. And MCM Expo is an interesting acquisition in that space. It fits very well with what we do already in other countries. We think we can bring something to it. It gives us a good starting position for doing that sort of in the UK. And it's just another reflection of the value of having the platform in exhibitions, operating these 500 shows across the number of countries we operate in. It is constantly evolving, looking to launch new shows, develop new shows, sometimes acquire new shows to bring them in and ensure that we're operating in the sectors that we see good growth in. And the Pop Culture shows a good example of that, where we've done largely organically, but with some acquisitions to help it where we've seen good growth. And we'll keep doing that and evolving and adapting as other sectors develop. We will take our next question from Chris Collett of Deutsche Bank. Hi, there. Just two quick questions. One was just to come back on to legal. I know you said that the environment hasn't really changed this year, but certainly been some commentary in the market that litigation might be starting to pick up. So just wondering, have you seen anything around an underlying pickup among your clients in terms of their activity in the litigation market or prospects for an improvement in litigation? And then secondly, just to come back on the insurance part of risk. You mentioned that when you were talking about insurance being not quite as favorable as last year, you mentioned some of the indicators that you look at. I just wonder if you could share with us the sorts of metrics or indicators that you think are relevant. Thanks. Okay. I mean, the first one on legal. I mean, litigation, of course, is only part of the legal market. And it's difficult for us to say whether any one particular segment has particularly changed. We are somewhat lagging indicator because when legal market activity picks up, it would take some time before it flows through into our volumes and then our contracts, etcetera. And when we look at it overall and certainly some of the more industry wide commentary that we look at is not showing any particular change. And you do get variations in subsegments. But overall, we don't see anything different at this stage. Your second question on insurance and indicators, I'm aware when we are commenting, of course, we're commenting on the volumes that are flowing through our products. We have a range of products that are addressing different points in the insurance process, be it in the underwriting or in the quoting, through to the claims process, etcetera. So it's just when we talk about the environment, it's what matters for us and the volumes. And we can measure that very closely by seeing the what those volumes are. It's a little harder, of course, to identify exactly what's driving that. And we do look to the external indicators and try and rationalize what we see going through our volumes. But it is often negation of seeking to rationalize it after the event rather than having any predictive ability from it. So it's just a comment on what the environment is for us and the products that we deliver to our customers. Okay. Thanks. And then just to clarify, I mean, even if it is after the event, and you talked what are some of those external factors that you're talking about? I mean, is it issues like the weather and so forth? Or are there other factors that you external indicators that you look to after the event? Yes. I understand something. Weather certainly has an impact in the very short term in terms of how customers behave and whether they're indoor shopping for car insurance or not. But that does tend to even out over any sort of period of time. So over a period of time, it looks like the sort of factors that come into play are what insurance companies are doing with their pricing, are they moving prices up, are they moving prices down, What is happening in terms of the consumer and how many whether driving miles are going up or down and what that means for claims behavior, etcetera. So there are all those sort of factors that come into play. And then you see them hitting our the volumes that are going through our products. Great. Thank you. We will take our next question from Konrad Thome of ABN AMRO. Please go ahead. Your line is open. Hi, good morning, gentlemen. Good morning. Two questions, please. The first on legal. If I remember correctly, Eric mentioned at the start of this year that because of the migration to new platforms, which would take out running double costs, that there was a good chance of margin improvement for quite a few years to come. From your earlier comment today about the U. S. Migration possibly being finished by the end of this year, does that mean that the opportunity to raise margins might be limited as from next year onwards? And my second question is, can you remind us of the currency impact, particularly the main the U. S. Dollar? What the relationship is to a sudden decline, for example, versus the euro, both in terms of your debt structure as well as your reported revenues? Thank you. Okay. So on legal, I mean, we have, as you say, pointed in the past to the effective double running costs as we transition from the old platform to the new platform. This is quite a long process though and involves many, many systems. And we are in that phase where we are getting the benefit of completing the migration and then being able to help the old systems. But it will take quite a long time. So I think we've indicated there's another couple of years of that process remaining. And that's certainly what you've seen historically that we've been able to drive underlying profit growth in legal well ahead of the revenue growth, and that's certainly been helping with that. And that dynamic is something that we're looking to continue with this, the migration over the next couple of years. I would just caveat it though, I think as everybody knows, against that, we do have the Martindale Howard joint venture, which has been contributing profits without revenue, which gives a boost to margins, of course, because it's joint venture accounted and the effect of that is coming down. So you haven't seen all of that differential in profit to revenue growth flowing through the margin. But nonetheless, we have been delivering margin increases in Legal over the past couple of years, and that remains our objective to continue to do that. You also asked about currency. As you know, we are majority dollar business. Over half our revenues comes from the U. S. And even some of our revenues from outside of the U. S. Are dollar denominated. That does mean that if we're reporting in euros or sterling, then the euro dollar or the sterling dollar exchange rate has an effect. Clearly, sterling fell very sharply a year or just over a year ago. You saw that very much in the first half figures that we published in July. For the second half of this year, actually, sterling dollar is actually averaging about the same as it was so far, about the same as it was in the second half of last year. So you'll obviously, in the full year numbers, you'll see the effect of the first half, but the second half won't add to that, if you like. The euro, if you look at the euro numbers, the euro is a bit stronger, clearly. And therefore, certainly in terms of whether it's revenue profit or earnings per share based on exchange rates as they stand today, and I guess there's only 2 months or so, the year to go, you'll see the euro numbers won't be as strong as the constant currency numbers. And that will that's the dynamic you have in a dollar running business reporting in euros and sterling. The debt structure, most of our debt is denominated in dollars and euros. So the clearly, if you see the dollar weakening against the pound on a spot basis because the balance sheet is spot, then you would see the sterling value of the debt lower and vice versa, the same in the euro reported numbers. Obviously, the euro debt isn't affected, but the dollar debt, if the euro is stronger against the dollar, then you would see a lower euro number. But that's we think about our debt relative to our cash flow. And therefore, you don't particularly see a change in the leverage ratios from that because, of course, our cash flow is changing value on currency as the same channel as our debt. Yes. Just a quick follow-up. I understand whether it's positive or negative in terms of the way you report. But given that the euro has gained about 5% in Q3 versus the dollar versus last year, I was hoping you might be able to give us like an indicative percentage effect that might have on your reported revenues in euros? Well, if you take the fact that our European revenues in the group as a whole are about 25%, of which the UK, which is mostly sterling, of course, is 6% or 7%, then you can work out from that that about 20% about only 20% of our total revenues inbound numbers are in euros. The rest are in other currencies. So you can do the math. 80% of the revenue is not in euros. Obviously, lots of currencies are moving all the time, but if it's just the euro moved, the other 80% would change in value. Sure. Okay. Thank you. Our next question comes from Tom Singlehurst of Citi. Please go ahead. Your line is open. Hello again, Tom. Hello. Sorry. I had a follow-up and actually you can blame Matt Walker for this because he brought the topic up. It was Equifax and that the cyber attack there, obviously, some very specific circumstances. But there has been a push from some democratic senators to overhaul some of the sort of regulations with respect to sort of big databases of personal information in particular, changing sort of the proposed changes to the way that individuals can opt out of databases, making it essentially a lot easier. As I understand it, I think in the U. S, you currently have to pay if you want to opt out of a database, so that might be changed. Firstly, do you think there will be any material changes in regulation with respect to consumer data and e privacy? And is there any particular reason why you wouldn't be affected? Well, the regulation around data and personal data and use of data, where you can use it, how you have to store it and etcetera are changing around the world all the time. And this is a very active area for regulators, an important area. And we have been adapting to that for many years and we'll continue to adapt for that. We're a very big business and used to having to evolve and adapt. I think we're in a good position to do that. We have in our products, we use multiple sources of data. The ability to use 1 in particular can change due to a number of factors, including regulation. But that's something that we're used to having to adapt to. So whilst I do anticipate continued further attention from regulators and laws around data, data security, data privacy, I'm confident that we will continue to adapt to that. We will take our next question from Ian Whittaker of Liberum. Please go ahead. Your line is open. Sorry, I'm doing the same as Tom and asking a follow-up. It's more sort of, I guess, a longer term question. And it's just really around cars and therefore, the impact on insurance. I mean, if you see, for example, what's happened in Pendragon that's had a profit warning over new cars in the UK and there seems to be sort of a general shift of sort of people moving from buying new cars to effectively leasing them out or sort of diminishing the appetite for actually owning sort of cars in the future. When you think about that trend moving forward, what do you think are the implications for your insurance business in the U. S? Well, I mean, the there are many factors that play into the auto insurance business, which, I mean, as you know, that is the biggest part of our U. S. It's not the only part, but it's the biggest part of our insurance business within Risk and Business Analytics. There are changes in people's behavior around ownership. There is also significantly more data available coming off cars and telematics data, for example. And that's certainly an area that we're focused on and developing our capabilities and building that into our products. So our role here is to help our customers price risk around driving, around cars, around drivers, around individuals. And we will continue to evolve and adapt based on what data source is available, what the makeup and nature of car insurance is and how that market is evolving. And I think we're quite excited about the ability to bring new data sources to bear in assessing risk. And that's what we do and what we'll continue to do as the market evolves. All right. I mean, I guess, if I could summarize that answer by the sound of it. I mean, it sounds though sort of you're saying sort of certainly could be something that could pose an issue in terms of the move to rental, but you're confident that actually you could get other revenue streams in the future that would offset that risk? Well, you're trying to put words in my mouth here, but I think I'm just making the point that there are many factors that will affect the auto insurance market in the U. S, where those factors may affect auto insurance markets around the world. But we have low penetration in markets outside of the U. S. Today, and we're obviously evolving around those businesses. And in all of our markets, all of them, the segments we serve, there are factors that will affect that those businesses. And auto insurance in the U. S. Represents about 6% or 7% of our total revenue base. So it's important. But there are things affecting all of our end user markets. And one of the key features of what we try to do and the culture we have is to make sure we're adapting to changes in those end user markets as we evolve our business. Perfect. Thanks very much, Nick. All right. Thank you. As we have no further questions in the queue, I would like to turn the call back to the speakers for any additional or closing remarks. Okay. Thank you, Alex. Thank you, everyone, for joining us for this. Thanks for your questions. And we'll see you again at the full year results in February. Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.