Wolters Kluwer 2015 Third-Quarter Trading Update
(Thomson Reuters ONE) -
November 4, 2015 - Wolters Kluwer, a global leader in professional information
services, today released its scheduled 2015 third-quarter trading update.
Highlights
* Full-year 2015 guidance reiterated.
* Nine-month revenues up 3% in constant currencies and up 3% organically.
* Leading, growing positions (52% of total revenues) grew 7% organically.
* Digital products (71% of total) up 6% organically, more than offsetting
decline in print.
* North America (60% of total) and Asia Pacific & Rest of World (8% of
total) driving growth.
* Nine-month adjusted operating profit increased in constant currencies and
the adjusted operating profit margin improved, as expected.
* Nine-month adjusted free cash flow also increased in constant currencies.
* Net-debt-to-EBITDA was 2.0x as of September 30, 2015.
Nancy McKinstry, CEO and Chairman of the Executive Board, commented:
"Our strategy of focusing our investment on our leading, high growth positions
is delivering improved year-on-year organic growth. Margins are on track to rise
this year, despite increased investment in product innovation, sales and
marketing, and continued restructuring. We face tougher comparables for non-
recurring revenues in the fourth quarter, but we are confident we will deliver
on our guidance for the full year."
Nine Months to September 30, 2015
Nine-month revenues increased 17% overall due to the effect of exchange rate
movements, in particular the depreciation of the euro against the U.S. dollar.
In constant currencies, revenues grew 3%, including organic growth of 3%. The
net effect of acquisitions and disposals in the first nine months was small, but
nonetheless additive to both revenues and adjusted operating profits.
By geographic region, North America and Asia Pacific & Rest of World maintained
organic growth of respectively 5% and 6% through September. Revenues generated
in Europe declined 1% in the nine-month period. Total recurring revenues (77% of
total revenues), which includes subscriptions and other recurring revenues, grew
3% organically in the first nine months. The rate of growth in Corporate Legal
Services (CLS) transactional revenues and other non-recurring revenues slowed
moderately in the third quarter, however the rate of decline in print books
abated somewhat.
The nine-month adjusted operating profit margin increased, despite increased
investment in new products, sales and marketing, and restructuring in this
period. Over 70% of restructuring costs relate to initiatives in Legal &
Regulatory Solutions.
Legal & Regulatory: Corporate Legal Services (CLS) delivered 7% organic growth
in the first nine months, slowing in the third quarter. Service and software
subscription revenues saw sustained organic growth, while CLS transactional
revenue growth slowed to 6% in the third quarter. For the full year, we expect
Corporate Legal Services to achieve organic revenue growth, albeit at a more
moderate pace due to a challenging comparable in the fourth quarter. CLS margins
are expected to be broadly stable for the full year.
Legal & Regulatory Solutions saw organic revenue decline of 3% in the first nine
months, a slight improvement on the trend seen in the first half of this year.
Digital products achieved modest but positive organic growth, while print and
services revenues continued to decline, as expected, particularly in Europe. The
adjusted operating margin in Legal & Regulatory Solutions moved to the low
teens, as a result of revenue trends, underlying cost inflation, and higher
restructuring charges. For the full year, we continue to expect Legal &
Regulatory Solutions organic revenue and margins to decline, with conditions in
our legal markets remaining challenging. On September 16, we completed the
disposal of a 55% interest in Wolters Kluwer Russia Publishing Holding.
Tax & Accounting: Nine-month organic growth was 3%, in line with our first half
performance. Tax and accounting software solutions again delivered good organic
revenue momentum in all regions of the world. Twinfield in Europe maintained
double-digit growth; ProSoft in Brazil saw organic growth moderate. Overall
organic growth for the division continues to be tempered by weakness in print
formats, training, and bank products. For the full year, we continue to expect
organic growth to be similar to 2014, with growth in software solutions more
than offsetting ongoing decline in print, services and bank products. We expect
full year margins to improve. Lower restructuring costs are expected to be
partly offset by increased investment in new products and sales and marketing.
Health: Nine-month organic growth was 6%, improving modestly from the first
half. Clinical Solutions delivered double-digit organic growth in the first nine
months, led by UpToDate. Health Learning, Research & Practice remained stable as
the ongoing decline in print journals and books was offset by organic growth in
digital products including Ovid online journals and digital learning solutions.
For the full year, the Health division is on track to maintain good organic
growth, driven by robust growth in Clinical Solutions. Margins are expected to
rise despite increased product, sales and marketing investment, and first-half
weighted restructuring. On August 31, we completed the acquisition of Learner's
Digest International, a provider of mobile-delivered continuing medical
education to physicians.
Financial & Compliance Services: Organic growth for the first nine months was
6%, improving on the first half trend, mainly due to a strong third quarter for
our Audit unit. Finance, Risk & Compliance maintained positive momentum, despite
double-digit growth in the comparable period. Audit improved its organic growth
for the first nine months, driven by stronger third quarter customer
implementations. Originations sustained its recovery, driven by software
upgrades and professional services to support customers around the new U.S.
lending regulation, TILA RESPA, which became effective in October; Financial
Services (FS) transactional revenues declined modestly in the first nine months.
Transport Services in Europe saw its rate of revenue decline improve. For the
full year, we expect positive organic growth driven by our Finance, Risk &
Compliance, Audit and Orginations units, with comparables becoming more
challenging in the fourth quarter, especially for Audit and Originations.
Margins are expected to improve.
Cash Flow, Acquisitions, Divestitures, and Net Debt
Nine-month operating cash conversion was 90%, ahead of 88% in the comparable
period. For the full year, we continue to expect cash conversion to return to
our historic average of around 95% (FY 2014: 100%). Nine-month adjusted free
cash flow increased in constant currencies, as improved cash conversion and
lower paid financing more than offset higher corporate taxes paid and net use of
restructuring provisions. Our guidance for full-year 2015 adjusted free cash
flow remains unchanged at >= ?500-?525 million in constant currencies.
In the nine months to September 30, 2015, net acquisition spending, including
earnouts, amounted to ?182 million, including ?134 million for Learners Digest
International in the third quarter. Twelve month rolling net-debt-to-EBITDA was
2.0x as of September 30, 2015, compared to 2.5x a year ago.
Subsequent to the third quarter, we paid an interim dividend of ?0.18 per
ordinary share (?53 million in total). A final dividend remains planned for May
2016 and is subject to approval at the Annual General Meeting of Shareholders in
April 2016.
Full-Year 2015 Outlook
Our guidance for the full year is unchanged. We note that comparables become
more challenging in the fourth quarter, particularly for Corporate Legal
Services and Financial & Compliance Services, and, as indicated in July,
investments this year are second-half-weighted. Nonetheless, we expect the
adjusted operating profit margin to increase in 2015. This includes
restructuring costs which are expected to be approximately ?35 million for the
full year (2014: ?36 million) and to occur mainly in Legal & Regulatory
Solutions. The table below provides our guidance for the full-year.
2015 Outlook
-------------------------------------------------------------------------------
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
-------------------------------------------------------------------------------
Guidance for adjusted free cash flow and diluted adjusted EPS is in constant
currencies (EUR/USD 1.33). Guidance for EPS growth reflects announced share
repurchases. Adjusted operating profit margin and ROIC are in reporting
currencies.
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. dollar cent move in
the average EUR/USD exchange rate for the year causes an opposite 1 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 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 around 1.10) prevail until year-end,
we estimate 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 our cash conversion ratio to return towards historic average of 95%,
and capital expenditure to be between 4% and 5% of total 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.
IFRS reported profits for 2015 will include a one-time loss of approximately ?18
million (the majority of which is foreign exchange related) following the
completion of the disposal of our 55% interest in Wolters Kluwer Russia
Publishing Holding on 16 September, 2015.
On July 29, 2015, we announced the combination of our Corporate Legal Services
and Finance, Risk & Compliance units into a new division serving Governance,
Risk & Compliance markets globally. On February 24, 2016, we will report our
full-year 2015 results under both the current and the new divisional
organization.
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
February 24, 2016 Full-Year 2015 Results
March 9, 2016 Publication of 2015 Annual Report
April 21, 2016 2016 Annual General Meeting of Shareholders
April 25, 2016 Ex-dividend date: 2015 final dividend
April 26, 2016 Record date: 2015 final dividend
May 11, 2016 First-Quarter 2016 Trading Update
May 12, 2016 Payment date: 2015 final dividend ordinary shares
May 19, 2016 Payment date: 2015 final dividend ADRs
July 29, 2016 Half-Year 2016 Results
November 2, 2016 Nine-Month 2016 Trading Update
Media Investors/Analysts
Annemarije Pikaar Meg Geldens
Corporate Communications Investor Relations
t + 31 (0)172 641 470 t + 31 (0)172 641 407
annemarije.pikaar(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/1963950/716732.pdf
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Source: Wolters Kluwer NV via GlobeNewswire
[HUG#1963950]
Unternehmensinformation / Kurzprofil:
Datum: 04.11.2015 - 08:01 Uhr
Sprache: Deutsch
News-ID 431795
Anzahl Zeichen: 16324
contact information:
Town:
Alphen aan den Rijn
Kategorie:
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