BUSINESS SUMMARY Reed Elsevier plc

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BUSINESS SUMMARY

Reed Elsevier plc (formerly Reed International) operates publishing and information business through its 50% interest in Reed Elsevier Group plc. The company's activities include science and medical, legal, education and business publishing. Its principal operations are in North America and Europe. Reed Elsevier plc holds a 39% interest in Reed Elsevier Finance BV, with Reed Elsevier NV holding a 61% interest. The company's business provides products and services that are organized to serve four business sectors:

* Elsevier serves the science and medical sector

* Lexis Nexis, the legal sector

* Harcourt Education, the education sector

* Reed Business, the business-to-business sector.

On June 30, 2004, Harcourt Education acquired Saxon Publishers, a publisher of skill based instructional material for pre-kindergarten through high school students in mathematics, phonics and early childhood learning.

Share Performance

Price (pence): 5.50 52 Week High: 5.67

Volume (millions) 8.7 52 Week Low: 4.61

Currency: GBP

FINANCIAL SUMMARY

For the six months ended 30 June 2005, Reed Elsevier Plc's revenue decreased 27% to 72M. Net income fell 32% to 65M Results reflects an increase in income tax expenses. Reed Elsevier Plc owns 52.9% economic interest of Reed Elsevier combined a business which is an international publisher and information provider with three business segments: scientific, professional including Lexis-Nexis and B-B.

Valuation Ratios

Price/Earnings 46.04

Price/Sales 2.75
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Price/Book 5.80

Price/Cashflow 19.07

Profitability Ratios (%)

Gross Margin 23.84

Operating Margin 14.10

Net Profit Margin 5.97

Financial Strength

Quick Ratio 3.52

Current Ratio 3.52

Per Share Data

Earnings 0.12

Sales 2.00

Book Value 0.95

Cash Flow 0.29

Management Effectiveness (%)

Return on Equity 12.22

Return on Assets 10.81

Return on Investment 12.05

Dividend Information

Dividend Per Share 0.13

Payout Ratio 108.51

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