Tuesday, March 18, 2014

Elsevier STM publishing profits rise to 39%

The Reed Elsevier annual report was published in March. One highlight of interest in the area of scholarly publishing is the revenue and adjusted operating profit for the Scientific, Technical & Medical portion of the business.

STM 2013 revenue: £2,126 million STM 2013 adjusted operating profit: £826 million That's a profit margin of 39%!

Revenue is up 1% from 2012, while profit is up 6% from 2012 (Reed Elsevier 2014, p. 12). Elsevier's profit increased from £780 million in 2012 to £826 million in 2013. That's an increase in profit alone of £46 million, or $76 million in U.S. dollars.

As I've explained elsewhere (Morrison, 2013), the vast majority of revenue for scholarly journals comes from academic library budgets.

Surely universities have better things to do with this kind of money than further increasing the profits of already highly profitable publishers? For example: $76 million dollars in extra profits to Elsevier could fund 760 academic positions at a rate of $100,000 per year - and this wouldn't even touch Elsevier's previously high profit rate! $76 million dollars in extra profits to Elsevier could fund over 12,000 student research assistantships at a rate of $6,000 each.

References

Morrison, H. (2014). Economics of scholarly communication in transition. First Monday, [S.l.], may. 2013. ISSN 13960466. Available at: . Date accessed: 18 Mar. 2014. doi:10.5210/fm.v18i6.4370. 

Reed Elsevier (2014). 2013 Annual Report. Retrieved March 18, 2014 from http://www.reedelsevier.com/investorcentre/reports%202007/Documents/2013/reed_elsevier_ar_2013.pdf 

Currency converstion Converting to U.S. dollars, that's revenue of $3.5 billion and profit of $1.3 billion, based on the Bank of Canada's daily currency conversion service, summary: On 18 March 2014, 826.00 U.K. pound sterling(s) = 1,368.94 U.S. dollar(s), at an exchange rate of 1.6573 (using nominal rate). From: http://www.bankofcanada.ca/rates/exchange/daily-converter/