Wolters Kluwer 2016 Full-Year Report
(Thomson Reuters ONE) -
Wolters Kluwer 2016 Full-Year Report
February 22, 2017 - Wolters Kluwer, a global leader in professional information
services, today releases its full-year 2016 results.
Highlights
* Revenues up 2% in constant currencies and up 3% organically.
* Digital & services revenues grew 5% organically (85% of total revenues).
* Recurring revenues grew 4% organically (77% of total).
* All main geographic regions delivered positive organic growth.
* Adjusted operating profit margin up 70 basis points to 22.1%.
* Diluted adjusted EPS ?2.10, up 6% in constant currencies.
* Adjusted free cash flow ?708 million, up 9% in constant currencies.
* Share buyback 2016-2018: ?200 million completed in 2016.
* Strong financial position: net-debt-to-EBITDA 1.7x at year-end.
* Proposed full-year total dividend of ?0.79 per share, up 5%.
* Outlook 2017: expect mid-single digit growth in diluted adjusted EPS in
constant currencies.
Nancy McKinstry, CEO and Chairman of the Executive Board, commented: "I am
pleased to report sustained organic growth and a significant improvement in
margins and cash flow. Better performance in Europe helped us overcome a
challenging comparable in the U.S. We continued to invest in innovation and
recent launches are being well-received by our customers. We extended into
attractive market adjacencies through selected acquisitions, completed several
non-core disposals, and drove further operating efficiencies. We remain focused
on executing on our strategic priorities and delivering increased value to
customers, employees, and shareholders."
Key Figures Full-Year 2016:
Year ended December 31
-------------------------------------------------------------------------------
? million (unless otherwise
stated) 2016 2015 D D CC D OG
-------------------------------------------------------------------------------
Business performance - benchmark
figures
Revenues 4,297 4,208 +2% +2% +3%
Adjusted operating profit 950 902 +5% +6% +5%
Adjusted operating profit margin 22.1% 21.4%
Adjusted net profit 618 583 +6% +5%
Diluted adjusted EPS (?) 2.10 1.96 +7% +6%
Adjusted free cash flow 708 647 +9% +9%
Net debt 1,927 1,788 +8%
Return on invested capital
(ROIC) 9.8% 9.3%
-------------------------------------------------------------------------------
IFRS results
Revenues 4,297 4,208 +2%
Operating profit 766 667 +15%
Profit for the year 490 423 +16%
Diluted EPS (?) 1.66 1.42 +17%
Net cash from operating
activities 927 843 +10%
-------------------------------------------------------------------------------
D: % Change; D CC: % Change constant currencies (?/$ 1.11); D OG: % Organic
growth. Benchmark (adjusted) figures are performance measures used by
management. See Note 5 for a reconciliation from IFRS to benchmark figures.
IFRS: International Financial Reporting Standards as adopted by the European
Union.
Full-Year 2017 Outlook
Our guidance for full year 2017 is provided in the table below. We expect to
deliver solid organic growth, to drive further margin improvement, and to grow
diluted adjusted EPS at a mid-single-digit rate in constant currencies. The
first half, in particular the first quarter, is expected to see slower organic
growth due to phasing and challenging comparables in Health and in Governance,
Risk & Compliance.
Full-Year 2017 Outlook
-------------------------------------------------------------------------------
Performance indicators Guidance
-------------------------------------------------------------------------------
Adjusted operating margin 22.5%-23.0%
Adjusted free cash flow ?675-?725 million
ROIC >9%
Diluted adjusted EPS Mid-single-digit growth
-------------------------------------------------------------------------------
Guidance for adjusted free cash flow and diluted adjusted EPS is in constant
currencies (?/$ 1.11). Guidance for EPS growth assumes the announced share
buyback program (2016-2018) is equally spread over the three year period.
Adjusted operating profit margin and ROIC are in reported currency.
Our guidance is based on constant exchange rates. In 2016, Wolters Kluwer
generated more than 60% of its revenues and adjusted operating profit in North
America. As a rule of thumb, based on our 2016 currency profile, each 1 U.S.
cent move in the average ?/$ exchange rate for the year causes an opposite
change of approximately two euro cents in diluted adjusted EPS.
Restructuring costs are included in adjusted operating profit. We expect these
costs to return to normal levels of around ?15-?25 million this year (2016: ?29
million). We expect adjusted net financing costs of approximately ?110 million,
excluding the impact of exchange rate movements on currency hedging and
intercompany balances. We expect the benchmark effective tax rate to increase to
approximately 27.5%. Capital expenditure is expected to be in the range of
5%-6% of total revenues (2016: 5.2%) with the cash conversion ratio likely to be
approximately 95%.
Our guidance assumes no significant change to the scope of operations. We may
make further disposals which can be dilutive to margins and earnings in the near
term.
2017 Outlook by Division
Health: we expect good organic growth, comparable to 2016, and improved margins
due to the ongoing mix shift towards Clinical Solutions. First quarter growth
will be muted due to phasing and a challenging comparable.
Tax & Accounting: we expect solid organic growth, in line with 2016 and
reflecting normal seasonal selling patterns. Margins are expected to increase
slightly.
Governance, Risk & Compliance: we expect full-year organic growth to be similar
to 2016, with growth to be second-half-weighted due to expected timing of larger
contracts and a challenging first-half comparable for transactional and other
non-recurring revenues. Full-year margins are expected to increase due to
operating efficiencies.
Legal & Regulatory: we expect organic revenue decline, in line with 2016 trend,
due to more moderate growth in digital products following a large customer
migration in 2016. Margins are expected to improve in the second half.
Strategic Priorities 2016-2018
On February 24, 2016, we announced our strategic priorities for 2016-2018. This
strategic plan ("Growing our Value") prioritizes expanding our market coverage,
increasing our focus on expert solutions, and driving further operating
efficiencies and employee engagement. Our strategy aims to sustain and, in the
long run, further improve our organic growth rate, margins and returns as we
continue to focus on growing value for customers, employees and shareholders.
Our priorities are:
* Expand market coverage: We will continue to allocate the majority of our
capital towards leading growth businesses and digital products, and extend
into market adjacencies and new geographies where we see the best potential
for growth and competitive advantage. Expanding our market reach will also
entail allocating funds to broaden our sales and marketing coverage in
certain global markets. We intend to support this organic growth strategy
with value-enhancing acquisitions whilst continuing our program of small
non-core disposals.
* Deliver expert solutions: Our plan calls for increased focus on expert
solutions that combine deep domain knowledge with specialized technology and
services to deliver expert answers, analytics and productivity for our
customers. To support digital growth across all divisions, we intend to
accelerate our ongoing shift to global platforms and to cloud-based
integrated solutions that offer mobile access. Our plan is to also expand
our use of new media channels and to create an all-round, rich digital
experience for our customers. Investment in new and enhanced products will
be sustained in the range of 8-10% of total revenues in coming years.
* Drive efficiencies and engagement: We intend to continue driving scale
economies while improving the quality of our offerings and agility of our
organization. These operating efficiencies will help fund investment and
wage inflation, and support a rising operating margin over the long term.
Through increased standardization of processes and technology planning, and
by focusing on fewer, global platforms and software applications, we expect
to free up capital to reinvest in product innovation. Supporting this effort
are several initiatives to foster employee engagement.
Leverage Target and Financial Policy
Wolters Kluwer uses its cash flow to invest in the business organically or
through acquisitions, to maintain optimal leverage, and provide returns to
shareholders. We regularly assess our financial position and evaluate the
appropriate level of debt in view of our expectations for cash flow, investment
plans, interest rates, and capital market conditions.
While we may temporarily deviate from our leverage target at times, we continue
to believe that, in the longer run, a net-debt-to-EBITDA ratio of around 2.5x
remains appropriate for our business given the high proportion of recurring
revenues and resilient cash flow.
At December 31, 2016, our net-debt-to-EBITDA ratio was 1.7x.
Dividend Policy and 2016 Dividends
Wolters Kluwer has a progressive dividend policy under which the company aims to
increase the dividend per share each year.
In light of our current below-target leverage and our solid 2016 operating
performance, we are proposing a final dividend of ?0.60 per share. This will
bring the total dividend over the 2016 financial year to ?0.79 per share, an
increase of 4 euro cents or 5% on the prior year dividend (2015: ?0.75). If
approved, the 2016 dividend will mark the 11th consecutive year of increase in
dividend per share.
Under our progressive dividend policy, we remain committed to increasing the
total dividend per share each year, with the annual increase dependent on our
financial performance, market conditions, and our need for financial
flexibility.
For 2017, we intend to set the interim dividend at 25% of prior year total
dividend.
Dividend dates for 2017 are provided on page 34. Shareholders can choose to
reinvest both interim and final dividends by purchasing additional Wolters
Kluwer shares through the Dividend Reinvestment Plan (DRIP) administered by ABN
AMRO Bank NV.
Anti-Dilution Policy and Share Buyback Program 2016-2018
Wolters Kluwer has a policy to offset the dilution caused by our annual
performance share issuance with share repurchases.
On February 24, 2016, we announced our intention to repurchase up to ?600
million in shares over the three-year period 2016-2018. This buyback includes
repurchases made under our anti-dilution policy. Assuming global economic
conditions do not deteriorate substantially, we believe this level of cash
return will leave us ample headroom for investment in the business, including
acquisitions.
During 2016, we repurchased 5.8 million shares for a total consideration of ?200
million under this program. The repurchased shares are added to and held as
treasury shares.
In 2017, we intend to repurchase a similar amount. As of February 21, 2017, we
have repurchased a further 1.4 million shares for a total consideration of ?50
million in the year to date.
Part of the shares held in treasury will be retained and used to meet future
obligations under share-based incentive plans. At the 2017 Annual General
Meeting of Shareholders Wolters Kluwer will propose cancelling any or all of the
other shares held in treasury or to be acquired under the share buyback program
2016-2018.
Full-Year 2016 Results
Benchmark Figures
Group revenues rose 2% overall and 2% in constant currencies to ?4,297 million.
Currency had a slightly negative impact on revenues as the benefit of a stronger
U.S. dollar was more than offset by the depreciation of the British pound and
other currencies. The effect of disposals on revenues outweighed the effect of
acquisitions.
Organic revenue growth, which excludes both the impact of exchange rate
movements and the effect of acquisitions and divestitures, was 3%, in line with
the prior year (2015: 3%).
Revenues from North America (61% of total revenues) grew 4% organically (2015:
5%), slowing as a result of reduced growth in non-recurring revenues in
Governance, Risk & Compliance. Revenues from Europe (31% of total revenues) saw
acceleration in organic growth to 1% (2015: 1% decline), with all four divisions
recording improved performance in this region, in particular Tax & Accounting
and Health. Revenues from Asia Pacific and Rest of World (8% of total revenues)
grew 3% organically (2015: 4%).
Adjusted operating profit increased 5% overall and 6% in constant currencies to
?950 million. The adjusted operating profit margin advanced by 70 basis points
to 22.1% (2015: 21.4%), driven by lower restructuring costs, results of
efficiency programs, the benefits of mix shift, and operational gearing.
Restructuring costs reduced to ?29 million compared to ?46 million in 2015.
Approximately half of this was incurred in Legal & Regulatory and the remainder
was spread across our other divisions. The acceleration of a number of
efficiency programs in late 2016 led restructuring costs to exceed our guidance
(?15-?25 million).
Adjusted net financing costs declined to ?107 million (2015: ?119 million) and
included a ?6 million loss on currency hedging and revaluation of intercompany
balances (2015: ?17 million loss). As a reminder, adjusted net financing costs
exclude the financing component of employee benefits, results of investments
available-for-sale, and net book gains or losses on equity-accounted investees.
Adjusted profit before tax was ?845 million (2015: ?783 million), an increase of
8% overall and 7% in constant currencies. The benchmark effective tax rate on
adjusted profit before tax increased to 26.8% (2015: 25.5%). In 2015, the
benchmark tax rate reflected a one-time favorable adjustment relating to
deferred tax assets.
Diluted adjusted EPS increased to ?2.10, an increase of 7% overall and 6% in
constant currencies.
IFRS Reported Figures
Reported operating profit increased 15% to ?766 million (2015: ?667 million),
reflecting the increase in adjusted operating profit, a decline in amortization
of acquired intangibles, and a net gain on disposals. These factors were partly
offset by an increase in acquisition-related costs. The net gain on divestments
of ?4 million (2015: ?14 million loss) consisted mainly of a ?15 million loss on
the disposal of our French trade media assets and a ?17 million gain on the
disposal of our indirect lending platform, AppOne.
Reported financing results amounted to a cost of ?113 million (2015: ?125
million cost) including the financing component of employee benefits of
?6 million (2015: ?5 million).
Profit before tax increased 21% to ?655 million (2015: ?542 million). The
reported effective tax rate increased to 25.2% (2015: 21.9%) and reflects a
negative tax impact on 2016 divestments. In 2015, the tax rate reflected a one-
time favorable adjustment relating to deferred tax assets.
Total profit for the year increased 16% to ?490 million (2015: ?423 million) and
diluted earnings per share increased 17% to ?1.66 (2015: ?1.42).
Cash Flow
Adjusted operating cash flow was ?948 million (2015: ?903 million), an increase
of 5% overall and 5% in constant currencies. The cash conversion ratio was 100%
(2015: 100%), ahead of our expectation despite an increase in capital
expenditures. Capital expenditures increased to ?224 million, or 5.2% of
revenues (2015: 4.5%). The increase in investment mainly relates to capitalized
product development costs in Tax & Accounting and Governance, Risk & Compliance.
Depreciation of property, plant & equipment and amortization of other intangible
assets was ?179 million (4.2% of revenues). Working capital inflows increased to
?43 million (2015: ?18 million) driven by favorable timing of payments and a
reduction in inventory levels.
Adjusted free cash flow was ?708 million, up 9% overall and up 9% in constant
currencies, reflecting the increase in adjusted operating cash flow and
benefitting from a reduction in corporate income taxes paid. Corporate income
taxes paid were ?108 million (2015: ?141 million), as a result of favorable
timing of cash tax payments. Paid financing costs were broadly stable at ?100
million (2015: ?101 million). The net movement of restructuring provisions of
?10 million related to cash spending of ?31 million on efficiency programs and
net additions of ?21 million during 2016. In 2016, a ?22 million voluntary
injection was paid into our North American pension scheme.
Dividends paid to shareholders during 2016 totaled ?223 million, comprising the
2015 final dividend and 2016 interim dividend.
Acquisition spending, net of cash acquired and including acquisition-related
costs, was ?461 million (2015: ?183 million). Of this, ?5 million related to
earn-outs on acquisitions made in prior years. The majority of acquisition
spending reflects the purchase of Enablon in Legal & Regulatory (July 2016) and
Emmi Solutions in Health (November 2016). Divestiture proceeds, net of cash
disposed, were ?14 million, representing the net proceeds from the sale of our
French trade media assets and our U.S. indirect lending solution, AppOne.
During the year, we completed ?200 million of share buybacks, of which ?2
million was settled in January 2017.
Net Debt and Leverage
Net debt at December 31, 2016, was ?1,927 million, an increase of ?139 million
since December 31, 2015, as a result of acquisitions and the share buyback
program. The net-debt-to-EBITDA ratio at year end 2016 was 1.7x.
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 2016 annual revenues of ?4.3 billion. The group serves
customers in over 180 countries, maintains operations in over 40 countries, and
employs approximately 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 solutions and organization, visit
www.wolterskluwer.com, follow us on Twitter, Facebook, LinkedIn, and YouTube.
Financial Calendar
March 8, 2017 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
August 28, 2017 Ex-dividend date: 2017 interim dividend
August 29, 2017 Record date: 2017 interim dividend
September 19, 2017 Payment date: 2017 interim dividend
September 26, 2017 Payment date: 2017 interim dividend ADRs
November 1, 2017 Nine-Month 2017 Trading Update
February 21, 2018 Full-Year 2017 Results
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).
Wolters Kluwer 2016 Full-Year Report:
http://hugin.info/130682/R/2080819/783639.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: 22.02.2017 - 08:00 Uhr
Sprache: Deutsch
News-ID 525671
Anzahl Zeichen: 25226
contact information:
Town:
Alphen aan den Rijn
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 190 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Wolters Kluwer 2016 Full-Year Report"
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).
