REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 9 Significant investments continue to be made in ScienceDirect, most particularly in new navigation services, and in web platforms to support the launch of new online products within Health Sciences. Continued action on costs, including further benefits of integration of the Harcourt STM businesses, funded increases in investment and improved the adjusted overall margin, i.e. before exceptional items and the amortisation of goodwill and intangible assets, by 0.7 percentage points. The outlook for the Science & Medical business is good. Although academic institutional and corporate budgets remain under pressure, Elsevier continues to see strong subscription renewals and take up of its electronic products. Investment in content and new online services is being increased to address further market opportunities. revenues continue to grow strongly, albeit from a much smaller base than in Science & Technology, from the expansion of online services in addition to migration from print subscriptions. Demand from the pharmaceutical industry for projects and conferences was however weaker leading to consolidation of these activities. The International business was expanded in the year through more aggressive versioning and distribution of international content in local markets and the acquisition of the Holtzbrinck STM publishing business, adding high quality German language medical publishing and strong local market and distribution channels for other international content. £1,295m 03 £693m 01 £1,024m 02 £652m 00 99 € 2,059m 03 € 1,137m 01 € 1,649m 02 € 991m 00 99 Turnover by business ELSEVIER Turnover  £ sterling Turnover  €  euro £1,381m € 2,002m Science & Technology £789m / € 1,144m Health Sciences £592m / € 858m 58% 42% 57% 43% OPERATING AND FINANCIAL REVIEW