February 18, 2015 - Wolters Kluwer, a global leader in professional information services, today released its 2014 full-year results.
Highlights
- Revenues up 3% in constant currencies and up 2% organically.
- Leading, high growth positions grew 7% organically (48% of total revenues).
- Digital & services revenues grew 5% organically (80% of total).
- North America and Asia Pacific drove organic growth.
- Adjusted operating margin 21.0%, within guidance range, reflects increased restructuring.
- Diluted adjusted EPS €1.57, up 3% in constant currencies, in line with guidance.
- Adjusted free cash flow €516 million, up 1% in constant currencies, exceeding expectation.
- Net-debt-to-EBITDA improved to 2.1x at year-end (2013: 2.2x).
- Proposed 2014 dividend increase to €0.71 per share to be paid in cash.
- Outlook 2015: expect diluted adjusted EPS to rise at mid-single-digit rate in constant currencies.
- Reviewing strategic options for Transport Services (1% of revenues).
- Announcing up to €140 million share buy-back program in 2015, including anti-dilution buy-back.
Nancy McKinstry, CEO and Chairman of the Executive Board, commented:
"Group-wide organic growth improved to 2%, following a strong fourth quarter. Our leading, high growth businesses and digital products across all divisions are driving this growth and supporting the transformation of the company. The macro-economic environment in Europe remains uncertain, but our strategy is delivering results and we are confident we will meet our guidance for 2015."
Key Figures 2014 Full-Year:
| Year ended December 31 | |||||
| (in millions of euros, unless otherwise stated) | 2014 | 2013 | D | D CC | D OG |
| Business performance - benchmark figures | |||||
| Revenues | 3,660 | 3,565 | +3% | +3% | +2% |
| Adjusted operating profit | 768 | 765 | 0% | 0% | -1% |
| Adjusted operating margin | 21.0% | 21.5% | |||
| Adjusted net profit | 470 | 467 | +1% | +3% | |
| Diluted adjusted EPS (€) | 1.57 | 1.56 | +1% | +3% | |
| Adjusted free cash flow | 516 | 503 | +3% | +1% | |
| Net debt | 1,897 | 1,988 | -5% | ||
| IFRS results | |||||
| Revenues | 3,660 | 3,565 | +3% | ||
| Operating profit | 569 | 619 | -8% | ||
| Profit for the year | 474 | 346 | +37% | ||
| Diluted EPS | 1.58 | 1.15 | +37% | ||
| Net cash from operating activities | 645 | 630 | +2% | ||
| D: % Change; D CC: % Change constant currencies (EUR/USD 1.33); 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 2015 Outlook
In 2015, 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 2015 restructuring costs of €30-€35 million (2014: €36 million), 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 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.
We expect adjusted net financing costs of approximately €100 million, excluding the impact of exchange rate movements on currency hedging and intercompany balances. 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 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 @Wolters_Kluwer on Twitter, or search for Wolters Kluwer videos on YouTube.
| Financial Calendar | |
| March 11, 2015 | Publication of 2014 Annual Report |
| April 22, 2015 | Annual General Meeting of Shareholders |
| 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 |
| 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@wolterskluwer.com | ir@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.
The full press release is available here:
