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</o:shapelayout></xml><![endif]--></head><body lang=EN-GB link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040;background:white'>A new investment report on Elsevier has been published by BernsteinResearch analyst Claudio Aspesi. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040;background:white'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040;background:white'>Extract:<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040;background:white'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040;background:white'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040;background:white'>When we downgraded Reed Elsevier to Underperform in 2011, we thought that budget constraints would slow the growth of Elsevier's journal business below consensus. At the time, the outlook for the years to come was for continued cuts in academic library budgets, and we thought unavoidable that libraries would respond by progressively abandoning "Big Deal" contracts in order to achieve substantial savings, facilitated by the limited number of journals which really matter to readers.</span><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040'><br><br><span style='background:white'>In addition, in 2012 we also thought that political intervention both in Europe and in the UK would force a shift to full Open Access (OA) journals, with negative consequences on the economics of Elsevier. Years of lobbying by various constituencies brought the UK first, then the European Union, and finally the Obama administration to adopt policies and, in the case of the UK and the EU, funding to support a transition to OA. By our estimates at the time, a full transition to Gold OA could lower Reed Elsevier's overall operating profit by an estimated 6 to 22%.</span><br><br><span style='background:white'>11 years after the Berlin Declaration on Open Access, however, the rise of Open Access appears to inflict little or no damage on the leading subscription publishers.<o:p></o:p></span></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040;background:white'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial","sans-serif";color:#404040;background:white'>The report is available here: </span><a href="http://goo.gl/WbSfF4" target="_blank" title="goo.gl/WbSfF4"><span style='font-family:"Arial","sans-serif";color:#427FED;background:white;text-decoration:none'>goo.gl/WbSfF4</span></a><o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>