Wolters Kluwer 2014 Third-Quarter Trading Update
(Thomson Reuters ONE) -
November 5, 2014 - Wolters Kluwer, a global leader in professional information
services, today released its scheduled 2014 third-quarter trading update.
Highlights
* Full-year 2014 guidance reiterated.
* Nine-month revenues up 2% in constant currencies and up 1% organically.
* Leading, growing positions (47% of total revenues) up 7% organically.
* Digital products (67% of total) up 5% organically, more than offsetting
decline in print.
* North America (54% of total) and Asia Pacific & ROW (8% of total)
driving growth.
* Nine-month adjusted operating profit margin declined in line with our
expectations, reflecting planned restructuring costs.
* Nine-month adjusted free cash flow declined modestly in constant currencies,
on track to meet our full-year guidance.
* Net-debt-to-EBITDA improved and is expected to be 2.5x or better by year-end
2014.
Nancy McKinstry, CEO and Chairman of the Executive Board, commented:
"Our leading, high growth positions continued to achieve strong organic revenue
growth in the third quarter, supporting the transformation of our portfolio.
Market conditions in Europe remain a challenge, but our digital products in this
region are delivering good organic growth, and we are driving further
efficiencies in the print operations. Datacert and other recent acquisitions are
performing well. I am confident we will deliver on our guidance for the full
year."
Nine Months to 30 September
In constant currencies, nine months revenues grew 2%, including organic growth
of 1%. The effect of acquisitions, mainly Datacert, more than offset the effect
of disposals made in 2013 and 2014. In reported currencies, nine-months revenues
were flat due to the effect of exchange rate movements, in particular the
strength of the Euro against the U.S. Dollar and other currencies during the
first nine months of the year.
Total recurring revenues (77% of total revenues) increased 2% organically in the
first nine months, in line with the trend seen in the first half of the year.
Transactional revenues declined overall, as expected, due to structural decline
in printed books and cyclical decline in transaction revenues related to the
downturn in the U.S. mortgage refinancing market in our Financial & Compliance
Services division.
The nine-month adjusted operating profit margin declined modestly, attributable
to the increase in restructuring costs which we announced at the start of the
year. For the full year, restructuring costs are expected to be at the upper end
of the range indicated in February, at approximately ?30 million.
Legal & Regulatory: Nine-month organic revenue trend for the division was -1%,
in line with the first half. Corporate Legal Services (CLS) maintained steady
organic growth in subscription revenues and saw transaction volumes pick up in
the third quarter driven by company formations and trademark search. Legal &
Regulatory Solutions saw a slight deterioration in revenue trends in the third
quarter, mainly relating to print revenues in Europe; digital products continued
to see organic growth. Our expectation for the full year is unchanged: we expect
CLS to achieve good organic growth, albeit slower than in 2013 as a result of
the current downcycle in UCC-3 filings. For the division as a whole, we
anticipate organic revenue decline due to continued challenges in the European
legal market and the U.S. legal education segment. We continue to expect revenue
trends combined with additional restructuring costs and the effect of dilutive
disposals and transfers to lead to a lower margin in 2014.
Tax & Accounting: Nine-month organic growth was 2%, broadly in line with first
half performance. Tax & accounting software solutions sustained organic growth
momentum in all regions of the world, including Europe. This performance
continues to be partially offset by weakness in publishing and training
globally, and U.S. bank products. Prosoft in Brazil is experiencing robust
organic growth. For the full year, we continue to expect our software businesses
to achieve good organic growth, partly offset by trends in publishing, training
and bank products. We expect to see some margin contraction in 2014 due to
increased restructuring which was weighted towards the first half of the year.
Health: Nine-month organic growth for the division was 5%, similar to the first
half. Clinical Solutions achieved double-digit organic growth in the first nine
months. Medical Research delivered solid growth in digital revenues, which more
than offset the ongoing decline in print journal subscriptions. Professional &
Education digital learning solutions continue to grow rapidly, but this was
outweighed by declines in printed books. For the full year, the Health division
is on track to see good organic growth and margin improvement.
Financial & Compliance Services: Organic growth for the first nine months was
2%, an improvement on the first half trend, following a better than expected
third quarter. Finance, Risk & Compliance saw strong growth in the third quarter
on the back of upfront licensing and implementation revenues. Our Audit unit's
organic growth is positive for the nine month period, despite a tough comparable
in the third quarter and the effect of product rationalization. The Originations
unit continues to be impacted by the market-wide downturn in U.S. mortgage
refinancing volumes. Our European Transport Services business saw revenue
decline, albeit at a slower rate, and continues to transition to a subscription
model. For the full year, we continue to expect the division to see positive
organic growth and a broadly stable margin.
Cash Flow, Acquisitions, Divestitures, and Net Debt
Nine-month cash conversion improved slightly compared to the first half of the
year. For the full year, we continue to expect cash conversion of around 95% (FY
2013: 95%). Adjusted free cash flow declined in constant currencies, mainly
reflecting higher tax paid and higher interest paid. Our guidance for full-year
2014 adjusted free cash flow remains unchanged at >= ?475 million in constant
currencies.
In the nine months to September 30, net acquisition spending including earnouts
amounted to ?165 million. The main acquisitions were Datacert (remaining 62%),
Financial Tools, LexisNexis Poland, and Dingxin Chuangzhi. The largest disposal
in the year to September 30 was our legal publishing operation in Canada.
On October 7, 2014, we completed the share buy-back program announced at the
start of the year, purchasing a total of approximately 1.2 million shares for a
total consideration of ?25 million.
Twelve month rolling net-debt-to-EBITDA was 2.5x as of September 30, 2014,
improving from 2.6x at the end of June 2014. By year-end, we expect this
leverage ratio to be in line with, or better than, our target of 2.5x.
Full-Year 2014 Outlook
Our full-year 2014 guidance is unchanged. Our full-year margin guidance includes
restructuring costs, which are expected to be around ?30 million, at the upper
end of the range set out in February 2014 (?25-?30 million).
--------------------------------------------------------------------------------
Performance indicators 2014 Guidance
--------------------------------------------------------------------------------
Adjusted operating profit margin 20.5%-21.5%
Adjusted free cash flow >= ?475 million
Return on invested capital >= 8%
Diluted adjusted EPS Low single-digit growth
--------------------------------------------------------------------------------
Guidance for adjusted free cash flow and diluted adjusted EPS is in constant
currencies (EUR/USD 1.33).
Our guidance is based on constant exchange rates. Wolters Kluwer generates more
than half of its revenue and adjusted operating profit in the United States. As
a rule of thumb, based on our 2013 currency profile, a 1 U.S. cent move in the
average EUR/USD exchange rate for the year causes an opposite 1.0 euro-cent
change in adjusted diluted EPS. The average EUR/USD rate during the first nine
months of 2014 was 1.36, compared to 1.32 in the first nine months of 2013. The
closing rate at September 30, 2014 was 1.26.
Our guidance assumes no significant change in the scope of operations. We may
make further disposals which could be dilutive to margins and earnings in the
near term. Additional information underlying our guidance is provided in the
table below.
-------------------------------------------------------------------------------
Additional information
-------------------------------------------------------------------------------
Adjusted net financing costs Approximately ?100 million
Benchmark effective tax rate 27.5%-28.0%
Cash conversion ratio Approximately 95%
-------------------------------------------------------------------
Assumptions underlying our guidance assume constant currencies
(EUR/USD 1.33).
-------------
We continue to expect adjusted net financing costs to be approximately ?100
million in constant currencies in the full year. Adjusted net financing costs
exclude the employee benefits financing component, disposal gains on equity-
accounted investees, and other non-benchmark items.
We continue to expect the effective tax rate on adjusted income before tax to be
between 27.5%-28.0% in full-year 2014.
IFRS reported profits for 2014 will include the revaluation gain on our 38%
minority interest in Datacert, triggered by our acquisition of the remaining
62% of Datacert in April of this year. We expect the full-year tax rate on IFRS
reported profits to reduce significantly primarily as a result of this non-
taxable revaluation gain and the effect of expected tax benefits related to
disposals in prior years.
About Wolters Kluwer
Wolters Kluwer is a global leader in professional information services.
Professionals in the areas of legal, business, tax, accounting, finance, audit,
risk, compliance and healthcare rely on Wolters Kluwer's market leading
information-enabled tools and software solutions to manage their business
efficiently, deliver results to their clients, and succeed in an ever more
dynamic world. Wolters Kluwer reported 2013 annual revenues of ?3.6 billion. The
group serves customers in over 150 countries, and employs over 19,000 people
worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.
Wolters Kluwer shares are listed on NYSE Euronext Amsterdam (WKL) and are
included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored
Level 1 American Depositary Receipt program. The ADRs are traded on the over-
the-counter market in the U.S. (WTKWY). For more information about our products
and organization, visit www.wolterskluwer.com, follow (at)Wolters_Kluwer on
Twitter, like us on Facebook, follow us on LinkedIn, or follow
WoltersKluwerComms on YouTube.
Financial Calendar
December 9, 2014 Investor Seminar, Wolters Kluwer Tax & Accounting
February 18, 2015 Full-Year 2014 Results
March 11, 2015 Publication of 2014 Annual Report
April 22, 2015 Annual General Meeting
April 24, 2015 Ex-Dividend date
April 27, 2015 Dividend record date
May 13, 2015 First-Quarter 2015 Trading Update
May 13, 2015 Dividend payment date
May 20, 2015 ADR Dividend payment date
July 29, 2015 Half-Year 2015 Results
November 4, 2015 Third-Quarter 2015 Trading Update
Media Investors/Analysts
Caroline Wouters Meg Geldens
Corporate Communications Investor Relations
t + 31 (0)172 641 459 t + 31 (0)172 641 407
press(at)wolterskluwer.com ir(at)wolterskluwer.com
Forward-looking Statements
This press release contains forward-looking statements. These statements may be
identified by words such as "expect", "should", "could", "shall" and similar
expressions. Wolters Kluwer cautions that such forward-looking statements are
qualified by certain risks and uncertainties that could cause actual results and
events to differ materially from what is contemplated by the forward-looking
statements. Factors which could cause actual results to differ from these
forward-looking statements may include, without limitation, general economic
conditions; conditions in the markets in which Wolters Kluwer is engaged;
behavior of customers, suppliers, and competitors; technological developments;
the implementation and execution of new ICT systems or outsourcing; and legal,
tax, and regulatory rules affecting Wolters Kluwer's businesses, as well as
risks related to mergers, acquisitions, and divestments. In addition, financial
risks such as currency movements, interest rate fluctuations, liquidity, and
credit risks could influence future results. The foregoing list of factors
should not be construed as exhaustive. Wolters Kluwer disclaims any intention or
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
PDF version of Press Release:
http://hugin.info/130682/R/1868528/656773.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Wolters Kluwer NV via GlobeNewswire
[HUG#1868528]
Unternehmensinformation / Kurzprofil:
Datum: 05.11.2014 - 08:00 Uhr
Sprache: Deutsch
News-ID 349795
Anzahl Zeichen: 15400
contact information:
Town:
Alphen aan den Rijn
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 111 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Wolters Kluwer 2014 Third-Quarter Trading Update"
steht unter der journalistisch-redaktionellen Verantwortung von
Wolters Kluwer NV (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
