OUTLOOK
Whilst 2003 can be expected to be another challenging year, our businesses are strongly placed and showing good momentum. We have demonstrated over the last two years that we can deliver good growth in revenues, margin, profit and cash generation despite a tough economic environment, and it is our expectation to deliver again in 2003.

The continuing investment into the business positions us well to grow our revenues ahead of the market. The Science & Medical business is benefiting from growing online take-up and new services, and will see the continued turnaround in Health Sciences. The Legal business should see another year of strong competitive performance. The Education business is expected to see continuing state budget pressures but some benefit from the additional federal funding and more state adoption revenues available. In Business markets, no upturn is assumed, although Reed Business is well positioned should markets recover. The restructuring actions taken in 2002 and continuous tight cost management should enable us to again improve operating margins whilst releasing funds for further investment.

We remain committed to deliver on our targets of above market revenue growth and double digit adjusted earnings per share growth at constant currencies for 2003. Inevitably, some caution would be necessary if there were to be a marked further deterioration in the economic environment. If current exchange rates prevail, there will be an adverse translation impact on reported earnings particularly when expressed in euros.

We are very encouraged by the transformation of Reed Elsevier in the last three years. We have a strong business, a clear strategy, a well motivated and experienced management team, and a relentless commitment to execute against our objectives. We see significant opportunities for growth and a pipeline of initiatives to deliver on them. We have great confidence in Reed Elsevier’s future success.

We want to take this opportunity to pay special tribute to the extraordinary efforts and commitment again shown by our staff this last year. So much has been achieved despite a most challenging business environment and we continue to push forward with so many developments and initiatives. We want to thank all at Reed Elsevier for their outstanding contributions, and the persistence and good fellowship that has played a major part in achieving our objectives in 2002.

Morris Tabaksblat Chairman		Crispin Davis Chief Executive Officer