Wolters Kluwer 2015 Half-Year Report

July 29, 2015 - Wolters Kluwer, a global leader in professional information services, today released its 2015 half-year results.

Highlights

• Full-year outlook reiterated.
• First-half revenues up 3% in constant currencies and up 2% organically.

  • Leading, growing positions grew 7% organically (52% of total revenues).
  • Digital & services revenues grew 5% organically (84% of total).
  • Growth in North America and Asia Pacific outweighed decline in Europe.
• First-half adjusted operating profit €391 million, up 5% in constant currencies.
• First-half diluted adjusted EPS €0.79, up 5% in constant currencies.
• Adjusted free cash flow €170 million, broadly stable in constant currencies.
• Leverage ratio net-debt-to-EBITDA 2.1x.
• €140 million share buyback completed on July 1.
• Announcing intent to pay interim dividends, starting with €0.18 in October 2015.
• Corporate Legal Services and Financial & Compliance Services to be combined, enabling us to pursue opportunities in governance, risk & compliance markets.

Interim Report of the Executive Board

Nancy McKinstry, CEO and Chairman of the Executive Board, commented:
"Our first half performance is encouraging. Organic growth improved to 2%, supported by our leading, high growth businesses and reinforced by strong transactional revenues in North America. The ongoing shift in business mix and our efficiency programs drove underlying margin increase. We have stepped up investment in product development and sales and marketing to build future growth, and we remain confident we will meet our guidance for 2015."

Key Figures 2015 Half-Year:

Six months ended June 30
(in millions of euros, unless otherwise stated)	2015	2014	D	D CC	D OG
Business performance - benchmark figures
Revenues	2,015	1,716	+17%	+3%	+2%
Adjusted operating profit	391	313	+25%	+5%	+4%
Adjusted operating margin	19.4%	18.2%
Adjusted net profit	235	190	+24%	+5%
Diluted adjusted EPS (€)	0.79	0.63	+24%	+5%
Adjusted free cash flow	170	136	+25%	-1%
Net debt	2,069	2,227	-7%
IFRS results
Revenues	2,015	1,716	+17%
Operating profit	281	214	+31%
Profit for the period	162	200	-19%
Diluted EPS (€)	0.55	0.67	-19%
Net cash from operating activities	245	188	+30%
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

Our guidance for the full year is unchanged. We note that comparables become more challenging in the second half, particularly for Corporate Legal Services and Financial & Compliance Services, and investments will be second-half weighted. As indicated 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. We expect the adjusted operating profit margin to increase in 2015. We currently expect restructuring costs 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 the 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 June period-end exchange rates (including a EUR/USD rate of 1.12) 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 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 @Wolters_Kluwer on Twitter, or search for Wolters Kluwer videos on YouTube.

Financial Calendar
September 22, 2015	Declaration of interim dividend
September 24, 2015	Ex-dividend date: 2015 interim dividend
September 25, 2015	Record date: 2015 interim dividend
October 12, 2015	Payment date: 2015 interim dividend ordinary shares
October 19, 2015	Payment date: 2015 interim dividend ADRs
November 4, 2015	Third-Quarter 2015 Trading Update
February 24, 2016	Full-Year 2015 Results

Media	Investors/Analysts
Annemarije Pikaar	Meg Geldens
Corporate Communications	Investor Relations
t + 31 (0)172 641 470	t + 31 (0)172 641 407
[e-mail]	[e-mail]

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:

Wolters Kluwer 2015 Half-Year Report (PDF)

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Source: Wolters Kluwer NV via Globenewswire

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