Reed Elsevier PLC (NYSE: RUK) is a publisher and information provider. The company operates in four segments: Elsevier, comprising scientific, technical and medical publishing; LexisNexis, providing legal, tax, regulatory, risk information and analytics, and business information solutions to professional, business and government customers; Reed Exhibitions, organizing trade exhibitions and conferences; and Reed Business Information, providing information and marketing solutions to business professionals.
In 2010, Reed Elsevier's revenues were flat at £6,055 million. The company's adjusted operating profit was lower by 1% at £1,555 million, with adjusted earnings per share down 5% to 43.4 pence. Overall, the company's spend on product development and sales and marketing was offset by cost reductions.
Revenue from LexisNexis grew during the year, with strong growth in the risk business. However, subscription revenues in the legal business continued to reflect the lower levels of law firm activity and employment.
In the risk solutions business, strong growth in the insurance business was supported by high transactional activity in the U.S. auto and property markets. A continuous pipeline of new data and analytics products also drives growth, ranging from helping insurers better assess underwriting risk to reducing cost and improving the effectiveness of the insurers’ workflow.
Reed Exhibitions saw revenue growth from biennial exhibitions and a moderated decline in annual show revenues. The 2010 shows have had growing attendance at the majority of annual events and exhibitor numbers up 4% in the top 50 annual shows. Shows in China, Russia, the Middle East and Brazil, in particular, grew strongly.
Reed Business Information saw growth in data services and online marketing solutions and moderated declines in advertising markets. The sale and closure of the U.S. controlled circulation magazines and certain other titles were completed, together with the sale of clusters of titles in Europe and Asia.
In 2010 Reed Business Information acquired a majority share in the leading petrochemical and energy information service in China, CBI China. In February 2011, the company acquired Shanghai Datong Medical Information Technology Co., Ltd.
Reed Elsevier has seen a significant migration from print products to electronic content and tools over the last ten years. In fact, print revenues now account for only 25% of revenues, while electronic content accounts for 61% of revenue. This trend will likely continue, meaning Reed Elsevier will need to continue to transition away from print publications and invest more in electronic formats. This is an industry wide trend reflecting the convenience of accessing information digitally rather than in print format.
Reed Elsevier's scientific, technical and medical (STM) publications are published on a paid subscription basis. There has been an ongoing debate among academics, the government, and libraries regarding whether such publications should be funded instead through fees charged to authors and from governmental and other subsidies or made freely available after a period following publication. If these methods of STM publishing are widely adopted or mandated, it would adversely affect Reed Elsevier's revenue from paid subscription publications.
Reed Elsevier operates in a highly competitive information and publishing industry, competing with heavyweights like McGraw Hill (MHP), Scholastic (SCHL), and Thomson Reuters (TRI). Reed Elsevier continually innovates and adds new research products to its portfolio in order to keep up with competitors.