Wolters Kluwer 2016 Nine-Month Trading Update
(Thomson Reuters ONE) -
Wolters Kluwer 2016 Nine-Month Trading Update
November 2, 2016 - Wolters Kluwer, a global leader in professional information
services, today released its scheduled 2016 nine-month trading update.
Highlights
* Full-year 2016 guidance reiterated.
* Nine-month revenues up 2% in constant currencies and up 2% organically.
* Digital & services revenues grew 4% organically (86% of total revenues).
* Digital revenues rose 5% organically (74% of total), in line with first
half trend.
* Recurring revenues sustain 4% organic growth (78% of total).
* All main geographic regions delivered positive organic growth.
* Nine-month adjusted operating profit up 3% in constant currencies; adjusted
operating profit margin increased by 20 basis points.
* Nine-month adjusted free cash flow increased overall and in constant
currencies.
* Net-debt-to-EBITDA was 1.8x as of September 30, 2016.
Nancy McKinstry, CEO and Chairman of the Executive Board, commented:
"Through the first nine months of 2016, we have continued to see good momentum
in our recurring revenues, reflecting robust organic growth from our expert
solutions which deliver deep domain knowledge and productivity to customers.
Print books, transactional and other non-recurring revenues were, as expected,
subdued in the third quarter. Operational excellence programs and lower
restructuring costs are resulting in improved margins while allowing increased
investment in new product development and in sales and marketing. We reaffirm
our outlook for the year."
Nine Months to September 30, 2016
Nine-month revenues increased 1% overall, including the impact of exchange rate
movements. In constant currencies, revenues grew 2%, largely reflecting organic
growth of 2%. The effect of disposals on nine- month revenues exceeded the
revenue contribution from acquisitions. All geographic regions delivered
positive organic growth in the nine-month period. North America (61% of total
revenues) saw organic growth moderate to 3% (9M 2015: 5%), primarily due to
slower growth in Governance, Risk & Compliance. Europe (31% of total revenues)
recorded an improvement in organic growth to 1%, compared to a 1% decline in the
comparable period, with all divisions seeing improved year-on-year trends in
this region. Asia Pacific & Rest of World (8% of total revenues) saw organic
growth decelerate to 2% (9M 2015: 6%), mainly due to weakness in Tax &
Accounting in Brazil and parts of Asia Pacific. Total recurring revenues, which
accounted for 78% of total revenues sustained 4% organic growth, in line with
the first half trends. The nine-month adjusted operating profit margin increased
by 20 basis points, reflecting lower restructuring costs in Health and Legal &
Regulatory as well as increased investment.
Health: Nine-month organic growth was 5%, in line with the first half. Clinical
Solutions delivered 8% organic growth in the first nine months. UpToDate, which
launched its 24(th) specialty (Sleep Medicine) in August, achieved double-digit
organic growth. Health Learning, Research & Practice grew 1% organically, as
growth in digital products outweighed decline in print journals and books. For
the full year, we expect another year of good organic revenue growth for the
division, similar to 2015, supported by robust organic growth in Clinical
Solutions and positive growth in Health Learning, Research & Practice. Margins
are expected to improve slightly, even as we continue to invest sales and
marketing and product development to drive future growth. In October, we signed
an agreement to acquire Emmi, a provider of subscription-based patient
engagement solutions for healthcare providers and insurance carriers; this
transaction is subject to Hart-Scott-Rodino regulatory approval in the U.S. and
other customary closing conditions.
Tax & Accounting: Nine-month organic growth was 3%, in line with first half
performance. Tax, accounting and audit software continue to drive the division's
organic growth, sustaining robust momentum in North America and Europe. Print
formats, online research and learning tools remain weak. In the third quarter,
we introduced a CCH ProSystem fx offer tailored to the needs of small firms. For
the full year, we continue to expect organic revenue growth to improve slightly
on 2015 levels, driven by the ongoing mix shift towards software solutions.
Margins are expected to be maintained for the full year despite higher
investment.
Governance, Risk & Compliance: Nine-month organic growth was 2%, with recurring
revenues sustaining 3% growth. Legal Services (LS) delivered 3% organic growth
against a challenging comparable (9M 2015: 7%). LS transactional revenue organic
growth slowed to 4% (9M 2015: 10%), primarily reflecting a lower level of M&A-
related filings and trademark searches. Financial Services (FS) recorded organic
growth of 2% (9M 2015: 7%), absorbing an anticipated decline in non-recurring
software license and implementation fees following last year's TILA RESPA
opportunity. FS transactional revenues sustained strong growth through the nine
months supported by UCC search and filing at CT Lien and mortgage volumes in
Originations. Finance, Risk & Reporting delivered positive organic growth,
reflecting increased software maintenance revenues on the back of last year's
new customer wins. For the full year, we continue to expect positive organic
growth, albeit slower than in 2015, given demanding comparables for
transactional and non-recurring software license and implementation fees. Full-
year margins are expected to improve slightly. In October, we completed the
acquisition of Vcorp Services, a provider of registered agent and other
corporate legal services.
Legal & Regulatory: Nine-month organic revenue declined 2% (9M 2015: decline of
3%), marking a deterioration on the first half trend, as expected, due in part
to a challenging comparable in print books. Digital products performed well,
achieving mid-single-digit organic growth, reflecting new and enhanced products
introduced in the past two years. Print products, which make up 37% of
divisional revenues, declined 10% organically, as expected. Overall revenues for
the first nine months declined 8%, mainly due to to several non-core disposals
made in the past twelve months, including the divestment of our French trade
media assets in the third quarter. In July, we completed the acquisition of
Enablon, a global provider of on-premise and cloud-based software solutions for
corporations to manage enterprise-wide environmental, health and safety (EHS)
compliance. For the full year, we continue to expect organic revenue decline to
be similar to 2015, with stronger digital performance offset by slight
deterioration in print and services trends this year. Margins are expected to
improve, mainly due to lower restructuring costs. Efficiency savings are
expected to fund wage inflation and increased product investment.
Cash Flow, Acquisitions, Divestitures, Share Buyback and Net Debt
Nine-month operating cash conversion improved to 93% (9M 2015: 90%) as a
reduction in working capital outflows outweighed higher capital expenditures.
For the full year, we continue to expect cash conversion of around 95%. Nine-
month adjusted free cash flow increased in constant currencies. A ?22 million
($25 million) voluntary cash injection into the North American pension scheme in
the third quarter was more than offset by improved cash conversion and lower tax
paid. Our guidance for full-year 2016 adjusted free cash flow remains unchanged
at ?650-?675 million in constant currencies.
In September, we paid an interim dividend of ?0.19 per ordinary share, bringing
the total cash used for dividends to ?214 million (2015 final dividend and 2016
interim dividend). Net acquisition spending, including earnouts, amounted to
?275 million in the first nine months. Net proceeds from divestitures amounted
to ?12 million.
In the year to date, we have repurchased 2.9 million ordinary shares for a total
consideration of ?105 million (average price ?35.52). These share repurchases
are part of the three-year (2016-2018), up to ?600 million buyback program
announced on February 24, 2016. It remains our intention to spread the
repurchases evenly over the three years. To facilitate this, Wolters Kluwer has
committed itself to the repurchase of ordinary shares for a maximum total
consideration of ?95 million in the period November 3, 2016 up to and including
December 30, 2016, by engaging a third party to execute transactions on its
behalf, within the limits of relevant laws and regulations (in particular
Regulation (EU) 596/2014) and Wolters Kluwer's Articles of Association.These
shares will be used for capital reduction purposes or to meet obligations
arising from share based incentive plans.
Twelve month rolling net-debt-to-EBITDA was 1.8x as of September 30, 2016,
compared to 2.0x a year ago, and 1.7x at year-end 2015.
Full-Year 2016 Outlook
Our full-year 2016 outlook is unchanged. We expect to deliver margin improvement
and to grow diluted adjusted EPS at a mid-single-digit rate in constant
currencies this year. Our guidance for full-year 2016 is provided in the table
below.
2016 Outlook
-------------------------------------------------------------------------------
Performance indicators 2016 guidance
-------------------------------------------------------------------------------
Adjusted operating profit margin 21.5%-22.0%
Adjusted free cash flow ?650-?675 million
Return on invested capital > 9%
Diluted adjusted EPS Mid-single-digit growth
-------------------------------------------------------------------------------
Guidance for adjusted free cash flow and diluted adjusted EPS is in constant
currencies (EUR/USD 1.11). Guidance for EPS growth assumes the announced share
repurchases are equally spread over 2016-2018. Adjusted operating profit
margin and ROIC are in reported currency.
Our guidance is based on constant exchange rates. In 2015, Wolters Kluwer
generated more than half of its revenues and adjusted operating profit in North
America. As a rule of thumb, based on our 2015 currency profile, a 1 U.S. cent
move in the average EUR/USD exchange rate for the year causes an opposite change
of approximately one and a half euro-cents in diluted adjusted EPS.
Restructuring costs, which are included in adjusted operating profit, are
expected to start returning to normal levels: we expect these costs to be around
?15-?25 million in 2016 (2015: ?46 million). We expect adjusted net financing
costs of approximately ?105 million, excluding the impact of exchange rate
movements on currency hedging and intercompany balances. We expect the benchmark
effective tax rate to be in the range of 27%-28% in 2016. We expect a cash
conversion ratio of approximately 95%, with capital expenditure rising to around
5% of total revenue.
Our guidance assumes no significant additional 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 and
solutions for professionals in the areas of health, tax & accounting, finance,
risk & compliance, and legal. We help our customers make critical decisions
every day by providing expert solutions that combine deep domain knowledge with
specialized technology and services.
Wolters Kluwer reported 2015 annual revenues of ?4.2 billion. The group serves
customers in over 180 countries, maintains operations in over 40 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 (ADR) 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 and follow us on Twitter, Facebook, LinkedIn, and YouTube.
Financial Calendar
February 22, 2017 Full-Year 2016 Results
March 8, 2017 Publication of 2016 Annual Report and 2016 Sustainability
Report
April 20, 2017 2017 Annual General Meeting of Shareholders
April 24, 2017 Ex-dividend date: 2016 final dividend
April 25, 2017 Record date: 2016 final dividend
May 10, 2017 First-Quarter 2016 Trading Update
May 16, 2017 Payment date: 2016 final dividend ordinary shares
May 23, 2017 Payment date: 2016 final dividend ADRs
July 28, 2017 Half-Year 2017 Results
November 1, 2017 Nine-Month 2017 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
press(at)wolterskluwer.com ir(at)wolterskluwer.com
Forward-looking Statements and Other Important Legal Information
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.
Elements of this press release contain or may contain inside information about
Wolters Kluwer within the meaning of Article 7(1) of the Market Abuse Regulation
(596/2014/EU).
PDF version of Press Release:
http://hugin.info/130682/R/2053487/768552.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Wolters Kluwer NV via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 02.11.2016 - 08:01 Uhr
Sprache: Deutsch
News-ID 504304
Anzahl Zeichen: 16768
contact information:
Town:
Alphen aan den Rijn
Kategorie:
Business News
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