∆ - % Change; ∆ CC - % Change constant currencies (EUR/USD 1.33); ∆ OG – % Organic growth
Revenues grew 3% in constant currencies to €1,619 million, with organic growth of 1% (HY 2010: 0%). Legal & Regulatory revenues were in line with HY 2010, with organic growth improving markedly from -3% organic growth at HY 2010 led by strong results in North America. Tax & Acccounting revenues fell 1% organic, impacted by the restructuring of bank product revenue (2% of annual division revenues), which is expected to shift revenues into the second half year. Health & Pharma Solutions revenues grew by 9% in constant currencies (6% organic), driven by strong growth at Ovid and double-digit growth in Clinical Solutions. Financial & Compliance Services’ revenue growth of 17% (3% organic) was supported by double-digit growth in Audit, Risk, and Compliance (ARC Logics), strong performance from banking and compliance products, and global expansion through the acquisition of FRSGlobal. Emerging market results are advancing, with revenues in China growing with strong double-digit numbers.
Ordinary EBITA improved 3% in constant currencies to €325 million. The company improved profitability by the continued shift towards higher margin electronic solutions, diligent cost management, and the impact of the Springboard operational excellence program.
The Springboard operational excellence program continued to deliver positive results. Half-year cost savings of €88 million position the program to meet its full-year run rate savings estimate of €170-€180 million. Total costs incurred during the period were €30 million. Diluted ordinary EPS increased 2% to €0.65 (HY 2010: €0.63). Net finance costs were €59 million and the effective tax rate was 26%, both in line with expectations. The fully diluted weighted average number of shares increased from 300.3 million to 302.8 million, due to the stock dividend and incentive shares, partially offset by the impact of the share buy-back (2.1 million shares purchased in the first half year 2011 for a total consideration of €35 million). The planned divestment results in a non-cash impairment charge of €106 million which is reported as part of Result from discontinuing operations, after tax. Free cash flow was €131 million, (HY 2010: €171 million), impacted by higher tax payments and the timing of tax refunds when compared against the first half of 2010.
The net-debt-to-EBITDA ratio was 3.0 (HY 2010: 2.9), with the dividend payment, share buy-back program, and acquisitions occuring in the first half year, against cash flow which is heavily weighted in the fourth quarter. The Company maintains a medium-term objective of achieving a net-debt-to-EBITDA ratio of 2.5. Prior year debt refinancing at attractive rates extended the maturity profile beyond 2014, ensuring a strong liquidity position and sufficient headroom.