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Preliminary Results Financial Highlights

Preliminary Results Financial Highlights. David Grigson C HIEF F INANCIAL O FFICER 12 February 2002. Financial Headlines. Revenue up 8% to £3.9bn Strong operating performance - underlying divisional operating profit up 7%

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Preliminary Results Financial Highlights

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  1. Preliminary ResultsFinancial Highlights David GrigsonCHIEF FINANCIAL OFFICER 12 February 2002

  2. Financial Headlines • Revenue up 8% to £3.9bn • Strong operating performance - underlying divisional operating profit up 7% • Normalised PBT of £304m reflecting investment in business transformation, restructuring and joint ventures • Write-down of non-core investments • Strong operating cash flow • £185m of cost savings to be delivered in 2002

  3. Reuters Group Year to 31 December 2001 2000 Growth £m £m Revenue Op profit - divisions - business transformation - other restructuring Normalised op profitJVs, Assocs & Invest incNet interest Normalised PBTAmortisationNet (losses) / gains on investments Reported PBT 3,885 646(164 )(99 ) 383 (70 ) (9 ) 304(93 ) (53 ) 158 3,592 609 (139 ) - 470 (16 ) 3 457 (71 ) 271 657 8% 6% (19% ) (34% ) (76% )

  4. Joint Ventures, Associates and Investment IncomeYear to 31 December Share of Profit / (Loss) 2001 2000£m £m FactivaRadianzTIBCO SoftwareAtriaxSilaMultexCapco / ICorOthers / Investment Income Total 5 (27 ) (17 ) (10 ) (8 ) (6 ) (4 ) (3 ) (70 ) (1 ) (9 ) 2 - (7 ) (4 ) - 3 (16 )

  5. 2001 2000£m £m Instinet IPO TSI follow-on Greenhouse Fund Reuters Investments Instinet Investments Net (losses) / gains oninvestments 200 - (145 ) (95 ) (13 ) (53 ) - 157 53 61 - 271 Gains/Losses on InvestmentsYear to 31 December

  6. Reuters/Instinet Split Year to 31 December Reuters Instinet Reuters Group £m £m £m Revenue Op profit - divisions - business transformation - other restructuring Normalised op. profitJVs, Assocs & Invest incNet interest Normalised PBT Normalised op. margin Normalised tax rate Normalised EPS Dividend per share 3,042 468(164 ) (82 ) 222(70 ) (24 ) 128 7% 25% 6.8p 10p 854 178- (17 ) 161- 15 176 19% 43% 6.8p - 3,885 * 646(164 ) (99 ) 383(70 ) (9 ) 304 10% 35% 13.6p 10p *Intra-group revenue of £11m

  7. Cash Flow Movement Reuters Instinet Reuters Group £m £m £m Normalised operating profitDepreciationCapexWorking capitalOperating cash flow Cash conversion Acquisitions / (disposals)Dividends / TaxationOther Movement Net (debt) / cash 222 192 (193 ) 41 262 118 % (207 ) (334 ) 13 (266 ) (702 ) 161 54 (83 ) 211 343 164 (66 ) (3 ) 438 840 383 246 (276 ) 252 605 (43 ) (400 ) 10 172 138

  8. Reuters - Revenue by Quarter £m (1%) 4% 4% 7% % numbers show underlying growth rates

  9. Reuters FinancialYear to 31 December 2001 2000 Underlying £m £m Growth Revenue RI 1,836 1,737 5% RTS 878 822 2% Bridge 73 - - RF 2,787 2,559 4% RF divisional profit 541 517 9% RF divisional margin 19% 20%

  10. Reuterspace Year to 31 December 2001 2000 Growth £m £m Overall Underlying Revenue 255 235 8% (2%) Operating loss (60 ) (67 ) • Full year losses £3m better than target • Now fully integrated into Corporates & Media • Losses expected to reduce to below £15m in 2002

  11. Instinet Year to 31 December 2001 2000 Growth £m £m Overall Underlying Revenue 854 804 6% 0% Operating profit 178 157 13% 4% Operating margin 21% 20% • Year of considerable structural change • Aggressive price and cost reductions • New products being rolled out • Market share gains in January `02

  12. Business Transformation & Other Restructuring - Reuters £m £246 £235 82 £185 £139 164 £75 £65 £15 Business Transformation costs Other restructuring costs Cost savings

  13. Margin Growth in 2002 20% -1% +4% New product investment -3% 15% Revenue decline / cost inflation Cost savings -2% Bridgeintegration +7% 10% BT, Restructuring& Bridge 12% 14% 5% 7% 0% 2002 Marginexcluding Bridge 2001 Margin 2002 Marginincluding Bridge

  14. Summary • Achieved a resilient operating performance in a difficult trading environment • Delivering on Business Transformation and Phase I of growth plan by leveraging global scale • Completing transition to new organisation structure • Tightening management disciplines to unlock profit potential

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