Wolters Kluwer NV
amsterdam : WLSN

July 27, 2011 02:12 ET

Wolters Kluwer 2011 Half-Year Results - Building Growth Momentum, Strengthened Portfolio

ALPHEN AAN DEN RIJN, NETHERLANDS--(Marketwire - Jul 27, 2011) - 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.

Highlights * 3% revenue growth in constant currencies to EUR1,619 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 EUR0.65 increased 2% over prior half year.

* Solid free cash flow of EUR131 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 EUR106 million recorded as part of discontinuing operations.

* Full-year guidance for total Company reiterated for 2011.

Key Figures 2011 Half-Year

---------------------------------------------------------------------------
Six months ended June 30                 2011    2010     D    D CC   D OG
---------------------------------------------------------------------------
Revenue (EUR millions)                  1,619   1,605    1%     3%      1%

Electronic and services revenue (% of
total)                                     72%    70%

Ordinary EBITA (EUR millions)             325    324     0%     3%      1%

Ordinary EBITA margin (%)                20.1%  20.2%

Ordinary net income (EUR millions)        196    190     3%     1%

Diluted EPS (EUR)                        0.39   0.44   (11%)  (15%)

Diluted ordinary EPS (EUR)               0.65   0.63     2%   (1%)

Free cash flow (EUR millions)             131    171   (23%)  (22%)
---------------------------------------------------------------------------
D - % Change; D CC - % Change constant currencies (EUR/USD 1.33); D 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

(All amounts are in millions of euros unless otherwise indicated)
--------------------------------+-----+-----+----+----+--------------------
 Six months ended June 30       | 2011| 2010|   D|D CC|                D OG
--------------------------------+-----+-----+----+----+--------------------
 Revenues                       |     |     |    |    |
--------------------------------+-----+-----+----+----+--------------------
 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%
--------------------------------+-----+-----+----+----+--------------------
 D - % Change; D CC - % Change constant currencies (EUR/USD 1.33); D OG - %
 Organic growth

Revenues grew 3% in constant currencies to EUR1,619 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 EUR325 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 EUR88 million position the program to meet its full-year run rate savings estimate of EUR170-EUR180 million. Total costs incurred during the period were EUR30 million.

Diluted ordinary EPS increased 2% to EUR0.65 (HY 2010: EUR0.63). Net finance costs were EUR59 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 EUR35 million).

The planned divestment results in a non-cash impairment charge of EUR106 million which is reported as part of Result from discontinuing operations, after tax.

Free cash flow was EUR131 million, (HY 2010: EUR171 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.

The full press release on the 2011 Half-Year Results is available here: Wolters Kluwer 2011 Half-Year Results (PDF)

About Wolters Kluwer

Wolters Kluwer is a market-leading global information services company. Professionals in the areas of legal, business, tax, accounting, finance, audit, risk, compliance, and healthcare rely on Wolters Kluwer's 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 had 2010 annual revenues of EUR3.6 billion, employs approximately 19,000 people worldwide, and maintains operations across Europe, North America, Asia Pacific, and Latin America. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

Visit our website, YouTube, follow @Wolters_Kluwer on Twitter, or look up Wolters Kluwer on Facebook for more for information about our customers, market positions, brands, and organization.

Presentation by Senior Management on July 27, 2011 - www.wolterskluwer.com

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.

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Forward-looking Statements

This press release 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 on the 2011 Half-Year Results is available here:

Wolters Kluwer 2011 Half-Year Results (PDF): http://hugin.info/130682/R/1533696/467266.pdf

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Source: Wolters Kluwer NV via Thomson Reuters ONE

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