Wolters Kluwer 2015 First-Quarter Trading Update
(Thomson Reuters ONE) -
May 13, 2015 - Wolters Kluwer, a global leader in professional information
services, today released its scheduled 2015 first-quarter trading update.
Highlights
* Trading in line with expectations; full-year 2015 guidance affirmed.
* First-quarter revenues up 4% in constant currencies and up 3% organically.
* Leading, high growth businesses and digital products continue to drive
organic growth.
* Growth in North America and Asia Pacific & ROW offset weakness in
Europe.
* Non-recurring and transactional revenues increased after posting
declines a year ago.
* First-quarter adjusted operating margin increased, in line with expectation.
* First-quarter adjusted free cash flow increased in constant currencies.
* Balance sheet leverage (net-debt-to EBITDA: 1.9x) remains favorable to
target (2.5x).
Nancy McKinstry, CEO and Chairman of the Executive Board, commented:
"Wolters Kluwer delivered a solid first quarter, in line with our expectations,
enhanced by non-recurring and transactional revenue streams and favorable
revenue timing. Our leading, high growth businesses and digital products
continue to drive growth, more than offsetting decline in print products. We are
supporting our growing businesses with additional investment while continuing to
pursue efficiencies and restructuring programs, particularly in Europe. We are
confident we will achieve our guidance for 2015."
First Quarter Developments
In the first quarter, revenues increased 4% at constant currencies and grew 3%
on an organic basis. The effect of acquisitions (mainly Datacert acquired April
7, 2014) more than outweighed the impact of small divestitures in the quarter.
In reporting currency, revenues rose 17%, reflecting the strength of the U.S.
Dollar as well as the impact of other currencies. Organic growth was lifted by
non-recurring and transactional revenues which had declined in the first quarter
of last year. Organic growth for the first four months of 2015 was 2%. The
first-quarter adjusted operating margin improved compared to a year ago,
supported by the ongoing shift in business mix, higher non-recurring revenues,
cost savings and currency.
In Legal & Regulatory, Corporate Legal Services (CLS) achieved strong organic
growth in the quarter, lifted by double-digit growth in transactional revenues
against an undemanding comparable in first quarter 2014. Legal & Regulatory
Solutions saw organic revenue decline in line with second half 2014 trends, as
growth in digital solutions was more than offset by decline in print products
and services. As expected, the divisional adjusted operating margin declined due
mainly to higher restructuring. For the full year, we expect Corporate Legal
Services (CLS) to achieve organic revenue growth, albeit at a more moderate pace
in the second half. This is expected to be more than offset by organic decline
in Legal & Regulatory Solutions, due to continued weakness in print formats.
Margins are expected to contract modestly, due to cost inflation, additional
product investment and restructuring.
Tax & Accounting delivered positive organic growth, in line with prior year and
with seasonal patterns, and increased its adjusted operating margin in the first
quarter. Growth was supported by software solutions (67% of divisional revenues)
which performed well in all geographic regions. Trends in print formats, bank
products, and training services continue to partly offset growth in software.
For the full year, we expect underlying revenue momentum to be similar to 2014,
with growth in software solutions more than offsetting ongoing decline in print
publishing and bank product revenues. We expect full year margins to improve
modestly.
Health achieved good organic growth and increased its adjusted operating margin
in the first quarter. Clinical Solutions organic growth moderated, but remained
in double-digits, with UpToDate driving performance. Health Learning, Research &
Practice (the new name for our combined Medical Research and Professional &
Education unit) delivered positive organic growth, benefitting from favorable
timing of distributor orders for print books. For the full year, we continue to
expect steady revenue performance for the division, supported by robust growth
in Clinical Solutions. Learning, Research & Practice is expected to see growth
in digital revenues offset by continued decline in print formats. Margins are
expected to rise despite increased product investment and restructuring.
Financial & Compliance Services also delivered good organic growth, against a
decline in the comparable quarter. Recurring revenues saw steady growth. FS
transactional revenues (mainly related to mortgages in our Originations unit)
increased, after posting declines in the first quarter of 2014, while other non-
recurring revenues benefitted from stronger software license and professional
services implementation fees compared to a year ago. Transport Services saw
further abatement in its rate of decline as it continues to develop its
subscription base and invest in transport management software. For the full
year, we expect the division to achieve positive organic growth driven by our
Finance, Risk & Compliance and Audit units, with comparables becoming more
challenging in the second half. Market conditions for U.S. mortgage originations
remain mixed, but new lending regulations are providing opportunities for
growth.
Cash Flow, Acquisitions, Divestitures, and Net Debt
Cash conversion was broadly stable in the quarter compared to a year ago.
Adjusted free cash flow increased in constant currencies, primarily as a result
of the absence of last year's additional coupon payment. First quarter net
acquisition spending, net of cash acquired, was ?27 million, in large part
relating to deferred and contingent payments with respect to acquisitions in
previous years.
Leverage remains better than our target of 2.5x. Twelve months rolling net-debt-
to-EBITDA was 1.9x at the end of March, ahead of our annual cash dividend
payment. Following approval at the Annual General Meeting, a dividend of ?0.71
per share will be paid on May 13, 2015. In February 2015, we announced our
intention to buy back shares for up to ?140 million. As of May 12, a total of
0.2 million ordinary shares have been repurchased for a total consideration of
?5 million.
Full-Year 2015 Outlook
We reaffirm our full-year 2015 guidance. We note that comparables become more
challenging in the remainder of the year. As indicated in our full-year results
announcement in February, this year we intend to further sharpen our portfolio
towards our leading high growth businesses, to step up organic investment in
digital products, and to continue to drive efficiencies, particularly in low
growth or declining operations. We expect the adjusted operating margin to
increase in 2015. This includes anticipated restructuring costs of ?30-?35
million (2014: ?36 million), mainly in Legal & Regulatory Solutions. The table
below provides our guidance for the full-year.
-------------------------------------------------------------------------------
Performance indicators 2015 guidance
-------------------------------------------------------------------------------
Adjusted operating profit margin 21.0%-21.5%
Adjusted free cash flow ?500-?525 million
Return on invested capital >= 8%
Diluted adjusted EPS Mid-single-digit growth
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Guidance for adjusted free cash flow and diluted adjusted EPS is in constant
currencies (EUR/USD 1.33). Guidance for EPS growth reflects the announced
share repurchases. Adjusted operating profit margin and ROIC are in reported
currency.
Our guidance is based on constant exchange rates. Wolters Kluwer generates more
than half of its revenues and adjusted operating profit in North America. As a
rule of thumb, based on our 2014 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 diluted adjusted EPS. Currency is expected to have a more significant
influence on results in 2015 than in recent years.
For the full year, we continue to expect adjusted net financing costs of
approximately ?100 million excluding the impact of exchange rate movements on
currency hedging and intercompany balances. Including the effect of currency and
assuming current exchange rates (including a EUR/USD rate of 1.12) prevail until
year-end, we estimate full year adjusted net financing costs of around ?125
million.
We expect the benchmark effective tax rate to be between 27% and 28% in 2015. We
expect a cash conversion ratio in line with our historic average of 95%, and
capital expenditure between 4% and 5% of revenue. 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.
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 2014 annual revenues of ?3.7 billion. The group serves
customers in over 170 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 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, or search for Wolters
Kluwer videos on YouTube.
Financial Calendar
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
February 24, 2016 Full-Year 2015 Results
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 report 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/1921247/688486.pdf
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Unternehmensinformation / Kurzprofil:
Datum: 13.05.2015 - 08:02 Uhr
Sprache: Deutsch
News-ID 392886
Anzahl Zeichen: 13909
contact information:
Town:
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Kategorie:
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