Wolters Kluwer N.V. · EURONEXT:WKL
Wolters Kluwer — H1 2013 Earnings Presentation
33 slides from Wolters Kluwer's earnings presentation, Jul 31, 2013
Slide 1: Half-Year Results 2013
2013 Half-Year Results July 31, 2013 | Amsterdam Nancy McKinstry Chief Executive Officer and Chairman Kevin Entricken Chief Financial Officer
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation 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 uncerta
Slide 3: Agenda
Agenda Introduction Financial Review Strategic and Operating Review 2013 Outlook Half-Year Results 2013 3
Slide 4: Introduction
Introduction Positive organic growth despite continued decline in Europe and in print Electronic & service subscription revenues grew 4% organically Leading, growing positions all achieved organic growth of 5% or better - Positions further strengthened with organic investment and selective acq
Slide 5: Agenda
Agenda Introduction Financial Review Strategic and Operating Review 2013 Outlook Half-Year Results 2013 5
Slide 6: Half-year 2013 results
Half-year 2013 results On track to meet full year guidance (€ million) 2013 HY 2012 HY ∆ ∆ CC ∆ OG Revenues 1,742 1,735 0% +1% +1% Ordinary EBITA 334 340 -2% 0% -1% Diluted ordinary EPS (€) 0.66 0.67 -2% -1% Ordinary free cash flow 140 142 -1% +1% Net Debt/EBITDA ratio 2.6x 3.0x ∆-% Change; ∆CC-% Ch
Slide 7: Revenues by division
Revenues by division Organic growth at Health helped offset tough comparable for F&CS (€ million) 2013 HY 2012 HY ∆ ∆ CC ∆ OG Legal & Regulatory 707 720 -2% -1% -1% Tax & Accounting 483 486 -1% 0% +1% Health 364 349 +4% +6% +4% Financial & Compliance Services 188 180 +4% +5% -3% Total Revenues 1,742
Slide 8: Revenues by type
Revenues by type Steady growth in recurring revenues dampened by cyclical businesses (€ million) 2013 HY 2012 HY ∆ ∆ CC ∆ OG Electronic & service subscription 944 904 +4% +6% +4% Print subscription 216 236 -8% -8% -6% Other non-cyclical 178 175 +2% +3% +3% Recurring revenues 1,338 1,315 +2% +3% +2%
Slide 9: Ordinary EBITA
Ordinary EBITA Modest margin decline due to investments, disposals and timing factors Margin Margin (€ million) 2013 HY 2012 HY ∆ ∆ CC ∆ OG 2013 HY 2012 HY Legal & Regulatory 135 140 -4% -3% -3% 19.0% 19.4% Tax & Accounting 121 121 0% +1% +4% 25.1% 24.8% Health 72 68 +7% +9% +5% 19.9% 19.5% Financia
Slide 10: Ordinary Net Income and EPS
Ordinary Net Income and EPS Ordinary net income broadly stable despite higher tax rate (€ million) 2013 HY 2012 HY ∆ ∆ CC Revenues 1,742 1,735 0% +1% Ordinary EBITA 334 340 -2% 0% Ordinary EBITA margin (%) 19.2 19.6 Ordinary net finance results1) (61) (62) Equity-accounted investees 0 0 Ordinary inc
Slide 11: IFRS Profit and Diluted EPS
IFRS Profit and Diluted EPS IFRS profits benefit from capital gains and lower loss on discontinued (€ million) 2013 HY 2012 HY ∆ Ordinary EBITA 334 340 -2% Amortization of acquired intangibles (93) (88) Results on divestments of operations 50 0 Non-benchmark costs (6) (5) Operating profit 285 247 +1
Slide 12: Ordinary Free Cash Flow
Ordinary Free Cash Flow Increased working capital outflow offset by lower tax payments (€ million) 2013 HY 2012 HY ∆ ∆ CC Ordinary EBITA 334 340 -2% 0% Depreciation and amortization of other intangibles 64 58 Autonomous movements in working capital (46) (18) Net capital expenditure (70) (67) Ordinar
Slide 13: Movement in Net Debt
Movement in Net Debt Net debt increased on higher acquisition spend (€ million) 2013 HY 2012 FY 2012 HY Net debt at start of period (2,086) (2,168) (2,168) Ordinary free cash flow from continuing operations 140 507 142 Springboard restructuring, net of tax (6) 24 (15) Acquisition spending, including
Slide 14: Leverage
Leverage Improved Net Debt/EBITDA ratio 2.6x; all cash dividend paid in 2Q Net debt / EBITDA Ratio 3.2 3.1 3.0 2.9 2.7 2.6 2.4 2.4 2007 2008 2009 2010 2011 2012 2012 HY 2013 HY 2012 restated for IAS 19R 'Employee benefits' and early adoption of IFRS 11 'Joint arrangements' Half-Year Results 2013 14
Slide 15: Balance Sheet
Balance Sheet Balance sheet remains solid (€ million) June 30, 2013 Dec. 31, 2012 June 30, 2012 Goodwill and intangible assets 4,778 4,651 4,756 Investment in equity-accounted investees 33 61 100 Other non-current assets 259 265 290 Non-current assets 5,070 4,977 5,146 Current assets 1,549 1,579 1,3
Slide 16: Debt Maturity Profile
Debt Maturity Profile Issued Eurobond €700 million of 2.875% to secure 2014 bond maturity Financing Profile 747 709 696 503 247 174 189 15 2 0 0 0 0 2013HY 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 >2023 Cash & cash equivalents + Debt maturity profile derivatives receivable Half-Year Re
Slide 17: Summary
Summary First half revenues up 1% organically Ordinary EBITA of €334 million; 19.2% margin, improving in the second half First half ordinary diluted EPS €0.66 Ordinary free cash flow of €140 million, up 1% in constant currency Net-debt-to-EBITDA of 2.6x, to be on target of 2.5x or better b
Slide 18: Agenda
Agenda Introduction Financial Review Strategic and Operating Review 2013 Outlook Half-Year Results 2013 18
Slide 19: Progress on strategy
Progress on strategy Our strategy aims to accelerate profitable growth Expand our leading, high growth positions Deliver solutions and insights Drive efficiencies Half-Year Results 2013 19
Slide 20: 1. Expand our leading, high growth positions
1. Expand our leading, high growth positions Our leading high growth positions all grew 5% organically or better 2013 HY organic growth of units indicated % of Division Finance and Audit, Risk & +5% Financial & Compliance 52% Compliance1) Health 43% Clinical Solutions >10% Tax & Accounting 59% Tax &
Slide 21: 2. Deliver solutions and insights
2. Deliver solutions and insights We are focusing on solutions that deliver increased productivity for our customers Drives Decisions and Tailored to the Increasingly Mobile Outcomes Customer UpToDate Anywhere TyMetrix 360˚ advanced TeamMate Express for mobile app user interface smaller audit
Slide 22: 3. Drive efficiencies
3. Drive efficiencies We are continuing to drive savings and creating global scale economies Sales Channel Process & Sourcing Technology Real Estate & Go to Market Organization Travel Reduce storage Office Implement big Consolidate Printing and consumption, consolidation data software pr
Slide 23: Selective acquisitions and disposals
Selective acquisitions and disposals Leading, growing positions further strengthened Key acquisitions Selected divestments Legal & Expands trademark Best Case Solutions Regulatory research in Europe AccessData (interest) Tax & Leading provider of Tax Accounting software in Brazil Leading player
Slide 24: Legal & Regulatory
Legal & Regulatory Improved organic trend in both North America and Europe North America: CLS and L&B € million 2013 HY 2012 HY Δ Δ CC Δ OG Organic growth +3% driven by Corporate Revenues 707 720 -2% -1% -1% Legal Services, up +6% Ordinary EBITA 135 140 -4% -3% -3% Launched new interface for leg
Slide 25: Tax & Accounting
Tax & Accounting Organic growth driven by software; margins stable despite investment North America € million 2013 HY 2012 HY Δ Δ CC Δ OG Software revenues up 4% Revenues 483 486 -1% 0% +1% Publishing and bank product decline as Ordinary EBITA 121 121 0% +1% +4% expected Margin 25.1% 24.8% CCH
Slide 26: Health
Health Organic growth 4% driven by Clinical Solutions Clinical Solutions € million 2013 HY 2012 HY Δ Δ CC Δ OG Maintains double-digit organic growth Revenues 364 349 +4% +6% +4% UpToDate adds Dermatology, local Ordinary EBITA 72 68 +7% +9% +5% language search, and is investing in Margin 19.9% 19
Slide 27: Financial & Compliance Services
Financial & Compliance Services F&CS results influenced by tough comparables and product migration Finance, Risk & Compliance € million 2013 HY 2012 HY Δ Δ CC Δ OG High single digit organic growth Revenues 188 180 +4% +5% -3% Investing in global capabilities Ordinary EBITA 28 32 -14% -13% -17% A
Slide 28: Agenda
Agenda Introduction Financial Review Strategic and Operating Review 2013 Outlook Half-Year Results 2013 28
Slide 29: Divisional Outlook 2013
Divisional Outlook 2013 North America to see organic growth, driven by CLS Legal & Regulatory European markets to remain weak Margin contraction Organic growth similar to 2012 Tax & Accounting Growth in tax software globally Margins broadly stable Strong growth in Clinical Solutions He
Slide 30: Guidance 2013
Guidance 2013 Performance indicators FY2013 Guidance Ordinary EBITA Margin 21.5–22.0% Ordinary free cash flow ≥ €475 million Return on Invested Capital (after tax) ≥ 8% Diluted ordinary EPS Low single-digit growth Ordinary net finance result Approximately €130 million Benchmark tax rate Broadly in l
Slide 31: Appendix
Appendix Nancy McKinstry Chief Executive Officer and Chairman Kevin Entricken Chief Financial Officer
Slide 32: Revenue and EBITA Breakdown
Revenue and EBITA Breakdown 2013 HY Revenues by division 2013 HY Ordinary EBITA1) 1) Excluding corporate costs of € 22 million Health Health 21% Legal & 20% Legal & Regulatory Regulatory F&CS 40% F&CS 38% 8% 11% Tax & Tax & Accounting Accounting 28% 34% 2013 HY Revenues by product type 2013 HY Reven
Slide 33: Revenues by region
Revenues by region (€ million) 2013 HY 2012 HY ∆ ∆ CC ∆ OG North America 944 936 +1% +2% +2% Europe 675 692 -2% -2% -2% AsiaPac & ROW 123 107 +13% +16% +8% Total Revenues 1,742 1,735 0% +1% +1% ∆-% Change; ∆CC-% Change constant currencies (EUR/USD 1.29); ∆OG–% Organic growth. 2012 restated for IAS 1