InvestorsCorporateJuly 27, 2011

Wolters Kluwer 2011 half-year results

Wolters Kluwer, a market-leading global information services company focused on professionals, today released its 2011 half-year results. Highlights include strong operating performance, a strategic re-focusing of the Health & Pharma Solutions division, and reiterated outlook for 2011.

The information in this press release is based on continuing operations, excluding the planned divestment of the pharma business, unless stated otherwise.


  • 3% revenue growth in constant currencies to €1,619 million (1% organic) fueled by strong growth in electronic and service subscriptions which grew 7% in constant currencies.
  • Online, software, and services now constitute 72% of total revenue.
  • Ordinary EBITA up 3% in constant currencies (1% organic) supported by migration to higher margin electronic products and contributions from the Springboard program.
  • Diluted ordinary EPS of €0.65 increased 2% over prior half year.
  • Solid free cash flow of €131 million impacted by tax payments, on track for full-year guidance.
  • Planned divestment of pharma business will focus the Health & Pharma Solutions division on leading market positions in professional information and clinical solutions; non-cash impairment charge of €106 million recorded as part of discontinuing operations.
  • Full-year guidance for total Company reiterated for 2011.

Key figures half-year 2011 ended June 30

2011 2010 ∆ CC ∆OG
Revenue (€ millions) 1,619 1,605 1% 3% 1%
Electronic and services revenue (% of total) 72% 70%
Ordinary EBITA (€ millions) 325 324 0% 3% 1%
Ordinary EBITA margin (%) 20.1% 20.2%
Ordinary net income (€ millions) 196 190 3% 1%
Diluted EPS (€) 0.39 0.44 (11%) (15%)
Diluted ordinary EPS (€) 0.65 0.63 2% (1%)
Free cash flow (€ millions) 131 171 (23%) (22%)

∆ - % Change; ∆ CC - % Change constantcurrencies(EUR/USD 1.33); ∆ OG – % Organic growth

Nancy McKinstry, CEO and Chairman of the Executive Board, commented on the performance: “I am encouraged with the considerable progress made during the first half year. Strong growth in online, software, and services is accelerating our revenue growth and supports the successful transformation of our business. Underlying trends in new sales and retention levels are improving in all geographies. Today, we announced the planned divestment of our pharma business. The Health division will focus on taking full advantage of our leading positions in professional information and clinical decision support solutions, one of the fastest growing areas of Health, to deliver enhanced value to our stakeholders. With these strategic changes and our first half-year results, we are confident that we will deliver on our expectations for the full year.”

Financial overview six months ended June 30

€ million, unless otherwise indicated 2011 2010 ∆ CC ∆ OG
Legal & Regulatory 695 704 (1%) 0% 0%
Tax & Accounting 467 474 (2%) (1%) (1%)
Health & Pharma Solutions 295 284 4% 9% 6%
Financial & Compliance Services 162 143 14% 17% 3%
Total revenues 1,619 1,605 1% 3% 1%
Ordinary EBITA
Legal & Regulatory 136 131 4% 6% 4%
Tax & Accounting 129 137 (6%) (6%) (6%)
Health & Pharma Solutions 51 47 9% 19% 16%
Financial & Compliance Services 29 30 (4%) 0% 0%
Corporate (20) (21) (4%) (4%) (4%)
Total ordinary EBITA 325 324 0% 3% 1%

∆ - % Change; ∆ CC - % Change constant currencies (EUR/USD 1.33); ∆ OG – % Organic growth

Revenues grew 3% in constant currencies to €1,619 million, with organic growth of 1% (HY 2010: 0%). Legal & Regulatory revenues were in line with HY 2010, with organic growth improving markedly from -3% organic growth at HY 2010 led by strong results in North America. Tax & Acccounting revenues fell 1% organic, impacted by the restructuring of bank product revenue (2% of annual division revenues), which is expected to shift revenues into the second half year. Health & Pharma Solutions revenues grew by 9% in constant currencies (6% organic), driven by strong growth at Ovid and double-digit growth in Clinical Solutions. Financial & Compliance Services’ revenue growth of 17% (3% organic) was supported by double-digit growth in Audit, Risk, and Compliance (ARC Logics), strong performance from banking and compliance products, and global expansion through the acquisition of FRSGlobal. Emerging market results are advancing, with revenues in China growing with strong double-digit numbers.

Ordinary EBITA improved 3% in constant currencies to €325 million. The company improved profitability by the continued shift towards higher margin electronic solutions, diligent cost management, and the impact of the Springboard operational excellence program.

The Springboard operational excellence program continued to deliver positive results. Half-year cost savings of €88 million position the program to meet its full-year run rate savings estimate of €170-€180 million. Total costs incurred during the period were €30 million. Diluted ordinary EPS increased 2% to €0.65 (HY 2010: €0.63). Net finance costs were €59 million and the effective tax rate was 26%, both in line with expectations. The fully diluted weighted average number of shares increased from 300.3 million to 302.8 million, due to the stock dividend and incentive shares, partially offset by the impact of the share buy-back (2.1 million shares purchased in the first half year 2011 for a total consideration of €35 million). The planned divestment results in a non-cash impairment charge of €106 million which is reported as part of Result from discontinuing operations, after tax. Free cash flow was €131 million, (HY 2010: €171 million), impacted by higher tax payments and the timing of tax refunds when compared against the first half of 2010.

The net-debt-to-EBITDA ratio was 3.0 (HY 2010: 2.9), with the dividend payment, share buy-back program, and acquisitions occuring in the first half year, against cash flow which is heavily weighted in the fourth quarter. The Company maintains a medium-term objective of achieving a net-debt-to-EBITDA ratio of 2.5. Prior year debt refinancing at attractive rates extended the maturity profile beyond 2014, ensuring a strong liquidity position and sufficient headroom.

2011 Outlook Reiterated 1)

Performance indicators 2011 Guidance
Ordinary EBITA margin 20.5-21.0%
Free cash flow 2) ≥ €425 million
Return on invested capital ≥ 8%
Diluted ordinary EPS 2) 3) €1.50 to €1.55

1)Based on total Wolters Kluwer, including pharma business. 2)In 2011 constant currencies (EUR/USD = 1.33) 3)Assumptions: financing costs: €130 million; effective tax rate: 26%; diluted weighted average number of shares: 307 million excluding impact of share buy-back.

A solid start to the year reinforces the Company’s confidence in its 2011 full-year outlook. Management continues to expect good growth in software and workflow solutions to outweigh challenges in print-based publishing and cyclical revenue sources such as training, consulting, and advertising. Geographically, the Company continues to expect that markets in North America and Asia will continue to improve, while the pace of European market recovery is expected to be slow. 

Improving margins will be underpinned by the migration of revenues to more profitable electronic products, ongoing stringent cost management, and the continuing contribution of the Springboard program. As in prior years, management will continue to invest approximately 8-10% of revenues in new products and platforms to drive future growth.

Impact of planned divestment of pharma business on outlook

The contribution from the discontinuing operations is expected to have the following impact on full-year pro-forma results for the continuing business: improved ordinary EBITA margin of approximately 100 basis points and reduced diluted ordinary EPS and free cash flow of approximately 2-3% and 3%, respectively. 


November 9, 2011 Trading Update
Februari 22, 2012
Full-Year 2011 Results

Presentations by senior management on July 27, 2011:

Media Roundtable: 11:00 AM CET. This event will be held for members of the press taking place at the Beurs van Berlage, Amsterdam and will be podcasted on the corporate website. 

Investor/Analyst meeting: 13:00 PM CET. This event will take place at the Beurs van Berlage, Amsterdam and will be webcast live on the corporate website.

About Wolters Kluwer

Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software solutions and services for professionals in healthcare; tax and accounting; financial and corporate compliance; legal and regulatory; corporate performance and ESG. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with technology and services.

Paul Lyon
Paul Lyon

Senior Director, External Communications: Global Branding & Communications

Wolters Kluwer
Meg Geldens
Meg Geldens
Vice President, Investor Relations
Investor Relations
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