Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. Netherlands
  4. Euronext Amsterdam
  5. Wolters Kluwer
  6. News
  7. Summary
    WKL   NL0000395903


SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

Wolters Kluwer : N.V., - Wolters Kluwer 2021 Half-Year Report

08/04/2021 | 04:26am EDT

Wolters Kluwer 2021 Half-Year Report

August 4, 2021 - Wolters Kluwer, a global leader in professional information, software solutions, and services, today releases its half-year 2021 results.


  • Revenues €2,280 million, up 6% in constant currencies and up 5% organically.
    • Recurring revenues (81% of total revenues) up 5% organically; non-recurring up 4% organically.
    • Digital & services revenues (93%) grew 5% organically.
    • Expert solutions (55%) grew 6% organically, excluding revenues associated with the PPP1.
  • Adjusted operating profit €613 million, up 14% in constant currencies.
    • Adjusted operating profit margin up 170 basis points to 26.9%.
    • Margin increase reflects operational gearing and both temporary and structural cost savings.
  • Diluted adjusted EPS €1.66, up 4% overall and up 19% in constant currencies.
  • Adjusted free cash flow €476 million, up 54% in constant currencies, reflecting improved collections compared to a year ago.
  • Balance sheet and liquidity further strengthened with recent refinancing actions.
    • Net-debt-to-EBITDA1.7x (FY 2020: 1.7x).
  • Interim dividend €0.54 per share, set at 40% of prior year total dividend.
  • Share buyback: €229 million of 2021 program of up to €350 million repurchased to date.
  • Guidance for 2021 updated and increased. (See page 2).

Half-Year Report of the Executive Board

Nancy McKinstry, CEO and Chairman of the Executive Board, commented: "I am delighted to report that the first half has seen a faster-than-expectedrecovery from the pandemic. Growth in recurring revenues has proved to be resilient, while most non-recurringrevenue streams posted a strong rebound against declines in the comparable period. With our markets recovering and new sales picking up, we expect underlying operating costs to rise in the second half as we invest to support growth."

Key Figures - Six months ended June 30

€ million (unless otherwise stated)



∆ CC

∆ OG

Business performance - benchmark figures







Adjusted operating profit






Adjusted operating profit margin



Adjusted net profit





Diluted adjusted EPS (€)





Adjusted free cash flow





Net debt




IFRS reported results





Operating profit




Profit for the period




Diluted EPS (€)




Net cash from operating activities




∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.14); ∆ OG: % Organic growth. Benchmark figures are performance measures used by management. See Note 4 for a reconciliation from IFRS to benchmark figures.

1 Throughout this document, PPP refers to the U.S. Small Business Association (SBA) Paycheck Protection Program established by the 2020 U.S. CARES Act. Wolters Kluwer Compliance Solutions (part of Governance Risk & Compliance) supported its bank customers in lending under this program. The PPP was reopened on January 11, 2021, and was ended on May 31, 2021.

Wolters Kluwer 2021 Half-Year Results

Page 1 of 34

Full-Year 2021 Outlook

With our markets recovering from the effects of the pandemic, we now expect all divisions to see a year- on-year improvement in organic growth. Health, Tax & Accounting, and Legal & Regulatory divisions benefitted from timing in the first half, which we expect will reverse in second half. We expect underlying operating costs to rise in the second half as we step up investment and accelerate hiring to support growth and as we partly restore travel, promotion, and other costs that were curtailed during the crisis. We continue to plan for a gradual return to our offices, when and where circumstances allow, with currently some 5%-10% of employees back in office. Our revised guidance for 2021 adjusted operating profit margin, adjusted free cash flow, return on invested capital (ROIC), and diluted adjusted EPS is provided below.

Full-Year 2021 Outlook

Performance indicators

2021 Guidance

Previous Guidance

2020 Actual

Adjusted operating profit margin

Around 25.0%

24.5% - 25.0%


Adjusted free cash flow

€925 - €975 million

€875 - €925 million

€907 million


Around 12.5%

Around 12%


Diluted adjusted EPS

High-single-digit growth

Mid-single-digit growth


Guidance for adjusted operating profit margin and ROIC is in reported currencies and assumes an average EUR/USD rate in 2021 of €/$1.21. Guidance for adjusted free cash flow and diluted adjusted EPS is in constant currencies (€/$ 1.14). Guidance reflects share repurchases for up to €350 million in 2021.

If current exchange rates persist, the U.S. dollar rate will have a negative effect on 2021 results reported in euros. In 2020, Wolters Kluwer generated more than 60% of its revenues and adjusted operating profit in North America. As a rule of thumb, based on our 2020 currency profile, each 1 U.S. cent move in the average €/$ exchange rate for the year causes an opposite change of approximately 2 euro cents in diluted adjusted EPS.

We include restructuring costs in adjusted operating profit. We currently expect that restructuring costs will be in the range of €10-€15 million in 2021 (FY 2020: €49 million). We expect adjusted net financing costs of approximately €65 million in constant currencies2, including approximately €10 million in lease interest charges. We expect the benchmark tax rate on adjusted pre-tax profits to be in the range of 23.0%- 24.0% for 2021. Capital expenditure is expected to be within our normal range of 5.0%-6.0% of total revenues (FY 2020: 5.0%). Cash repayments of lease liabilities are expected to be in line with depreciation of right-of-use assets (FY 2020: €73 million). We expect the full-year cash conversion ratio to be around 100% in 2021 (FY 2020: 102%). See Note 4 for the calculation of our cash conversion ratio. Any guidance we provide assumes no additional significant change to the scope of operations. We may make further acquisitions or disposals which can be dilutive to margins and earnings in the near term.

2021 Outlook by Division

Health: We expect organic growth to improve over 2020 levels and the adjusted operating profit margin to be stable year-on-year as temporary cost savings fade and investment rises in the second half.

Tax & Accounting: We expect organic growth to improve from 2020 levels and the adjusted operating profit margin to decline due to the absence of one-time benefits and the fading of temporary cost savings.

Governance, Risk & Compliance: We now expect organic growth to improve from 2020 levels, as a rebound in Legal Services transactional revenues is now expected to more than compensate for lower revenues associated with the PPP1. We expect the full-year adjusted operating profit margin to improve on the back of lower restructuring and provisions, despite increased investment.

Legal & Regulatory: We expect the division to return to positive organic growth driven by digital information and software revenues. We expect the adjusted operating profit margin to improve as lower restructuring more than offsets increased investment.

2 Guidance for adjusted net financing costs in constant currencies excludes the impact of exchange rate movements on currency hedging and intercompany balances.

Wolters Kluwer 2021 Half-Year Results

Page 2 of 34

Our Mission, Business Model and Strategy

Our mission is to empower our professional customers with the information, software solutions, and services they need to make critical decisions, achieve successful outcomes, and save time. We support professionals across four main customer segments: health; tax & accounting; governance, risk & compliance; and legal & regulatory. All our customers face the challenge of increasing proliferation and complexity of information and the pressure to deliver better outcomes at a lower cost. Many of our customers are looking for mobility, flexibility, intuitive interfaces, and integrated open architecture technology to support their decision-making. We aim to solve their problems and add value to their workflow with our range of digital solutions and services, which we continuously evolve to meet their changing needs. Since 2003, we have been re-investing8%-10% of our revenues in developing new and enhanced products and the supporting technology platforms.

Expert solutions, which combine deep domain knowledge with technology to deliver both content and workflow automation to drive improved outcomes and productivity for our customers, accounted for 55% of total revenues in HY 2021 (FY 2020: 54%) and grew 4% organically. Excluding revenues associated with the PPP1, expert solutions grew 6% organically. Based on revenues, our largest expert solutions are:

  • Health: clinical decision support tool UpToDate; clinical drug databases Medi-Span and Lexicomp; and Lippincott nursing solutions for practice and learning.
  • Tax & Accounting: corporate performance solutions CCH Tagetik and TeamMate; professional tax and accounting software, including CCH ProSystem fx, CCH Axcess, and PFX Engagement in North America and similar software for professionals across Europe.
  • Governance, Risk & Compliance: finance, risk, and regulatory reporting suite OneSumX; banking compliance solutions ComplianceOne, Expere, and Gainskeeper; and enterprise legal management software Passport and Tymetrix.
  • Legal & Regulatory: EHS/ORM3 suite Enablon, and our range of workflow solutions for European legal professionals.

Our business model is primarily based on subscriptions and other recurring revenues (80% of total revenues in FY 2020 and 81% in HY 2021), augmented by implementation services revenues as well as volume-based transactional or other non-recurring revenues. Renewal rates for our digital information, software and service subscriptions are high and are one of the key indicators by which we measure our success. In

HY 2021, software products accounted for 43% of total revenues (FY 2020: 41%) and grew 5% organically. Of total software revenues, 31% related to recurring cloud software revenues, which grew 17% organically in the first half of 2021 (FY 2020: 19%).

We have been evolving our technology towards fewer, globally scalable platforms, with reusable components. We are transitioning our solutions to the cloud and leveraging advanced technologies such as artificial intelligence, natural language processing, and predictive analytics to drive further innovation. We are standardizing tools, streamlining our technology infrastructure (including data centers), and improving our development processes using the scaled agile framework. Our employees drive our achievements and we have been working to ensure we are providing engaging and rewarding careers.

Strategic Priorities 2019-2021

While the pandemic has had an impact on our financial trajectory, it has fully reinforced and validated many aspects of our strategy: the evolution towards digital and expert solutions, the transition to cloud- based software platforms, and the investment to upgrade internal systems, infrastructure, and digital marketing capabilities. Our strategic priorities for 2019-2021 continue to be:

3 Throughout this document, EHS/ORM refers to environmental, health & safety and operational risk management.

Wolters Kluwer 2021 Half-Year Results

Page 3 of 34

  • Grow Expert Solutions: We will focus on scaling our expert solutions by extending these offerings and broadening their distribution through existing and new channels, including strategic partnerships. We will invest to build or acquire positions in adjacent market segments.
  • Advance Domain Expertise: We intend to continue transforming our information products and services by enriching their domain content with advanced technologies to deliver actionable intelligence and deeper integration into customer workflows. We will invest to enhance the user experience of these products through user-centric design and differentiated interfaces.
  • Drive Operational Agility: We plan to strengthen our global brand, go-to-market, and digital marketing capabilities to support organic growth. We will invest to upgrade our back-office systems and IT infrastructure. Part of our 2019-2021 strategic plan is to complete the modernization of our Human Resources technology to support our efforts to attract and nurture talent.

Our strategy is focused on organic growth, although we may make further bolt-on acquisitions and non-core disposals to enhance our value and market positions. Acquisitions must fit our strategy, strengthen or extend our existing business, be accretive to diluted adjusted EPS in their first full year and, when integrated, deliver a return on invested capital above our weighted average cost of capital (8%) within three to five years.

In the first half of 2021, group-wide product development spending (including capital expenditures) remained within our guided range of 8%-10% of total revenues. We continued to develop and enhance our expert solutions, while also investing to transform our digital information products to enhance their content, functionality, and user interfaces, while adding capabilities that leverage artificial intelligence.

We took steps to drive operational agility, leveraging standardized technology platforms and components and transitioning products to the cloud. In the first half of 2021, we successfully migrated our corporate performance management systems to the cloud-based CCH Tagetik solution and completed the consolidation of 280 product websites into a single Wolters Kluwer website.

ESG Priorities4

Our strategy aims to deliver high levels of customer satisfaction and impactful products and services, while fostering an engaged, talented, and diverse workforce, and ensuring strong corporate governance, secure systems, and efficient and environmentally-friendly operations. At the start of 2021, we rolled out a new sustainability plan (ENGAGE) to further advance these objectives.

In the first half of 2021, we made progress on a number of environmental, social, and governance (ESG) initiatives. We advanced on programs to reduce our carbon emissions: our real estate rationalization program delivered a 4% organic reduction in our office footprint by closing several smaller offices. Our server migration and data center consolidation program is on track to reduce the number of on-premise servers this year by transitioning applications to the cloud. This migration of customer applications and internal systems from on-premise servers to more energy-efficient cloud platforms results in better capacity utilization and a net reduction in carbon emissions.

In July 2021, we launched our first global, all-employee survey of diversity, equity & inclusion. The results will form the basis for setting new goals to ensure that we have a diverse workforce that reflects the communities in which we live and work.

And on the governance side, we have now incorporated six strategic and verifiable ESG measures and targets into management's short-term incentive plan. Four of these ESG measures were also linked to our €600 million multi-currency credit facility, creating a sustainability-linked facility approved by twelve syndicate lenders.

4 Environmental, social and governance priorities.

Wolters Kluwer 2021 Half-Year Results

Page 4 of 34

Financial Policy, Capital Allocation, Net Debt, and Liquidity

Wolters Kluwer uses its free cash flow to invest in the business organically and through acquisitions, to maintain optimal leverage, and to provide returns to shareholders. We regularly assess our financial position and evaluate the appropriate level of debt in view of our expectations for cash flow, investment plans, interest rates, and capital market conditions. While we may temporarily deviate from our leverage target, we continue to believe that, in the longer run, a net-debt-to-EBITDA ratio of around 2.5x remains appropriate for our business given the high proportion of recurring revenues and resilient cash flows.

Dividend Policy and Interim Dividend 2021

Wolters Kluwer remains committed to a progressive dividend policy, under which we aim to increase the dividend per share in euros each year, independent of currency fluctuations. The payout ratio5 can vary from year to year. Proposed annual increases in the dividend per share take into account our financial performance, market conditions, and our need for financial flexibility. The policy takes into consideration the characteristics of our business, our expectations for future cash flows, and our plans for organic investment in innovation and productivity, or for acquisitions. We balance these factors with the objective of maintaining a strong balance sheet.

As announced on February 24, 2021, the interim dividend for 2021 was set at 40% of the prior year total dividend. This results in an interim dividend of €0.54 per share, to be distributed on September 23, 2021, to holders of ordinary shares, or September 30, 2021, to holders of Wolters Kluwer ADRs.

Shareholders can choose to reinvest both interim and final dividends by purchasing additional Wolters Kluwer shares through the Dividend Reinvestment Plan (DRIP) administered by ABN AMRO Bank N.V.

Share Buyback 2021 and Share Cancellation 2021

As a matter of policy since 2012, Wolters Kluwer will offset the dilution caused by our annual incentive share issuance with share repurchases (Anti-Dilution Policy). In addition, from time to time when appropriate, we return capital to shareholders through share buyback programs. Shares repurchased by the company are added to and held as treasury shares and are either cancelled or utilized to meet future obligations arising from share-based incentive plans. The maximum number of shares which may be acquired will not exceed the authorization granted by the General Meeting of Shareholders.

On February 24, 2021, we announced our intention to repurchase shares for up to €350 million during 2021. Assuming global economic conditions do not deteriorate substantially, we believe this level of share buybacks leaves us with ample headroom to support our dividend plans, to sustain organic investment, and to make selective acquisitions. The share repurchases may be suspended, discontinued, or modified at any time.

During the year up until August 3, 2021, we have spent €229 million on share buybacks (3.1 million shares at an average price of €73.41). Included in these amounts was a block trade of 593,276 for €38.6 million on February 25, to partly offset the issuance of incentive shares. See Note 9 for further information on issued share capital.

For the period starting August 5, 2021, up to and including November 1, 2021, we have mandated a third party to execute €70 million in share buybacks on our behalf, within the limits of relevant laws and regulations (in particular Regulation (EU) 596/2014) and the company's Articles of Association.

As of August 3, 2021, Wolters Kluwer held 7.5 million shares in treasury. A portion of these treasury shares will be retained in order to meet future obligations under share-based incentive plans.

At the 2021 Annual General Meeting of April 22, 2021, shareholders approved a resolution to cancel for

5 Dividend payout ratio: dividend per share divided by adjusted earnings per share.

Wolters Kluwer 2021 Half-Year Results

Page 5 of 34

This is an excerpt of the original content. To continue reading it, access the original document here.


Wolters Kluwer NV published this content on 04 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2021 08:25:04 UTC.

ę Publicnow 2021
All news about WOLTERS KLUWER
09/24WOLTERS KLUWER : N.V., - Share Buyback Transaction Details September 16 - September 22, 20..
09/23New Collaboration between Wolters Kluwer Enablon and the Value Reporting Foundation off..
09/23WOLTERS KLUWER : Kevin Entricken CFO Wolters Kluwer wins Dutch CFO Award 2021
09/23WOLTERS KLUWER : Share Buyback Transaction Details September 16 - September 22, 2021
09/22WOLTERS KLUWER : Corporate Vision Names Wolters Kluwer's Ann Roberson Technology Operation..
09/21WOLTERS KLUWER : Presents “Top 10 Insurance Market Conduct Issues of 2020” Web..
09/20WOLTERS KLUWER : ELM Solutions Experts Discuss Legal Spend Volatility in New Podcast
09/16WOLTERS KLUWER : N.V., - Share Buyback Transaction Details September 9 - September 15, 202..
09/16WOLTERS KLUWER : Earns Five 2021 Best in Biz International Awards
09/16WOLTERS KLUWER : recognized with Gold Globee« in the 6th annual 2021 American Best in Busi..
More news
Analyst Recommendations on WOLTERS KLUWER
More recommendations
Sales 2021 4 691 M 5 497 M 5 497 M
Net income 2021 704 M 825 M 825 M
Net Debt 2021 2 241 M 2 626 M 2 626 M
P/E ratio 2021 35,4x
Yield 2021 1,48%
Capitalization 24 774 M 29 010 M 29 031 M
EV / Sales 2021 5,76x
EV / Sales 2022 5,50x
Nbr of Employees 18 670
Free-Float 96,1%
Duration : Period :
Wolters Kluwer Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends WOLTERS KLUWER
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 18
Last Close Price 95,42 €
Average target price 86,52 €
Spread / Average Target -9,33%
EPS Revisions
Managers and Directors
Nancy McKinstry Chairman-Executive Board & Chief Executive Officer
Kevin B. Entricken Chief Financial Officer
Frans J. G. M. Cremers Chairman-Supervisory Board
Jeanette Horan Independent Member-Supervisory Board
Ann Elizabeth Ziegler Independent Member-Supervisory Board
Sector and Competitors
1st jan.Capi. (M$)
WOLTERS KLUWER38.17%29 010
S&P GLOBAL INC.37.83%109 138
RELX PLC22.45%57 856
MSCI INC.48.11%54 525
EQUIFAX INC.37.48%32 348