Wolters Kluwer 2022 Half-Year Report
Wolters Kluwer 2022 Half-Year
Report
Alphen aan den Rijn, August 3, 2022 – Wolters Kluwer, a
global leader in professional information, software solutions and
services, today releases its half-year 2022 results.
Highlights
- Revenues €2,600 million, up 7% in constant currencies and up 7%
organically.
- Recurring revenues (81% of total revenues) up 7% organically;
non-recurring up 6% organically.
- Digital & services revenues (93% of total revenues) grew 8%
organically.
- Expert solutions (56% of total revenues) grew 9%
organically.
- Adjusted operating profit €734 million, up 10% in constant
currencies.
- Adjusted operating profit margin up 130 basis points to
28.2%.
- Margin benefitted from operational gearing and favorable
currency mix.
- Slower than expected ramp-up in spending and hiring.
- Diluted adjusted EPS €2.04, up 23% overall and up 11% in
constant currencies.
- Adjusted free cash flow €497 million, down 4% in constant
currencies.
- Cash conversion declined and tax paid increased, as
expected.
- Balance sheet remains strong with net-debt-to-EBITDA of
1.3x.
- Interim dividend €0.63 per share, set at 40% of prior year
total dividend.
- Share buyback program for 2022 increased to €1 billion of which
€356 million completed to date.
- Guidance for 2022 increased. (See page 2).
Half-Year Report of the Executive
Board
Nancy McKinstry, CEO and Chair of the Executive Board,
commented: “The first half of the year saw strong,
better-than-anticipated organic growth which, along with currency
movements, benefitted our margins. Growth in expert solutions and
strong customer retention was delivered across all divisions. We
have upgraded our outlook for the full year and are confident we
are well-positioned to address the challenges associated with
growing economic and geopolitical headwinds.”
Key Figures – Six months ended June 30 |
€ million (unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Business performance – benchmark figures |
|
|
|
|
|
Revenues |
2,600 |
2,280 |
+14% |
+7% |
+7% |
Adjusted operating profit |
734 |
613 |
+20% |
+10% |
+11% |
Adjusted operating profit margin |
28.2% |
26.9% |
|
|
|
Adjusted net profit |
527 |
437 |
+21% |
+10% |
|
Diluted adjusted EPS (€) |
2.04 |
1.66 |
+23% |
+11% |
|
Adjusted free cash flow |
497 |
476 |
+4% |
-4% |
|
Net debt |
2,203 |
2,417 |
-9% |
|
|
ROIC |
14.8% |
12.8% |
|
|
|
IFRS reported results |
|
|
|
|
|
Revenues |
2,600 |
2,280 |
+14% |
|
|
Operating profit |
640 |
519 |
+23% |
|
|
Profit for the period |
455 |
360 |
+26% |
|
|
Diluted EPS (€) |
1.76 |
1.37 |
+29% |
|
|
Net cash from operating activities |
666 |
613 |
+9% |
|
|
∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆
OG: % Organic growth. Benchmark figures are performance measures
used by management. ROIC is based on twelve-months rolling figures.
See Note 4 for a reconciliation from IFRS to benchmark
figures. |
Full-Year 2022 Outlook
We are increasing our guidance for adjusted operating profit
margin and ROIC in reporting currency and for adjusted EPS growth
in constant currencies. We reaffirm our outlook for adjusted free
cash flow in constant currencies. While first half organic growth
was better than expected, we expect organic momentum to slow in the
remainder of the year, largely due to challenging comparables. We
expect second half margins to reflect increased hiring and
investments. Growth in diluted adjusted EPS will be dampened by a
return to our historical tax rate. Revenues from Russia, Belarus,
and Ukraine (mainly in Governance, Risk & Compliance)
represented less than 0.5% of group revenues in 2021 and HY
2022.
Full-Year 2022 Outlook |
Performance indicators |
2022 Guidance |
Previous 2022 Guidance |
2021 Actual |
Adjusted operating profit margin* |
26.0%-26.5% |
25.5%-26.0% |
25.3% |
Adjusted free
cash flow |
€1,025-€1,075 million |
€1,025-€1,075 million |
€1,010 million |
ROIC* |
14%-15% |
Around 14% |
13.7% |
Diluted adjusted EPS growth |
Mid- to high-single-digit |
Mid-single-digit |
€3.38 |
*Guidance for adjusted operating profit margin and ROIC is in
reporting currency and assumes an average EUR/USD rate in 2022 of
€/$1.07. Guidance for adjusted free cash flow and diluted adjusted
EPS is in constant currencies (€/$ 1.18). Guidance reflects share
repurchases of €1 billion in 2022. |
If current exchange rates persist, the U.S. dollar rate will
have a positive effect on 2022 results reported in euros. In 2021,
Wolters Kluwer generated more than 60% of its revenues and adjusted
operating profit in North America. As a rule of thumb, based on our
2021 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 EPS1. Also, if
current rates persist, we expect to incur a (non-cash) foreign
exchange loss on intercompany balances at year-end.
We include restructuring costs in adjusted operating profit. We
currently expect that restructuring costs will increase to within
our normal range of €10-€15 million (FY 2021: €6 million). Due to
higher interest rates on cash balances, we now expect adjusted net
financing costs2 in constant currencies to be approximately €55
million. We expect the benchmark tax rate on adjusted pre-tax
profits to be in the range of 23.0%-24.0% (FY 2021: 21.5%). Capital
expenditure is expected to increase but to remain within our normal
range of 5.0%-6.0% of total revenues (FY 2021: 5.0%). We continue
to expect the full-year cash conversion ratio to be in the range of
100%-105% (FY 2021: 112%).
Our guidance assumes no additional significant change to the
scope of operations. We may make further acquisitions or disposals
which can be dilutive to margins, earnings, and ROIC in the near
term.
2022 Outlook by Division
Health: we continue to expect organic growth to
slow from 2021 levels (mainly due to the absence of a contract win
of the size of the 2021 ASCO deal) and the adjusted operating
profit margin to improve.
Tax & Accounting: we expect organic growth
to accelerate from 2021 levels and the adjusted operating profit
margin to improve.
Governance, Risk & Compliance: we continue
to expect organic growth to slow from 2021 levels, mainly due to an
expected decline in transactional revenues in the second half. We
expect the adjusted operating profit margin to improve for the full
year.
Legal & Regulatory: we now expect organic
growth to improve on 2021 levels. We expect the adjusted operating
profit margin to decline modestly for the full year due to the
absence of a one-off pension amendment recorded in 2021.
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. Every day, 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.
Our expert solutions combine deep domain knowledge with
technology to deliver both content and workflow automation to drive
improved outcomes and productivity for our customers. Expert
solutions, which include our software products and certain advanced
information solutions, accounted for 56% of total revenues in the
first half of 2022 (FY 2021: 55%) and grew 9% organically. Software
revenues accounted for 44% of total revenues (FY 2021: 42%) and
grew 9% organically, with cloud software revenues up 20%
organically.
Based on revenues, our largest expert solutions by division
are:
- Health: global clinical decision support tool
UpToDate; clinical drug databases Medi-Span and Lexicomp; and
Lippincott nursing solutions for practice and learning.
- Tax & Accounting: global corporate
performance solution CCH Tagetik; global corporate internal audit
platform TeamMate; professional tax and accounting software,
including CCH Axcess and CCH ProSystem fx 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, eOriginal, and Gainskeeper; and
enterprise legal management software Passport and TyMetrix.
- Legal &
Regulatory: global EHS/ORM3 suite Enablon; legal workflow
solutions Kleos and Legisway; and other software tools for European
legal professionals.
Our business model is primarily based on subscriptions, software
maintenance, and other recurring revenues (80% of total revenues in
FY 2021 and 81% in HY 2021), augmented by implementation services
and license fees as well as volume-based transactional or other
non-recurring revenues. Renewal rates for our recurring digital
information, software, and service revenues are high and are one of
the key indicators by which we measure our success. Product
innovation is a key driver of growth.
More than half of our operating costs relate to our employees,
who create, develop, maintain, sell, implement, and support our
solutions on behalf of our customers. Our technology architecture
is increasingly based on globally scalable platforms that use
standardized components. An increasing proportion of our solutions
is built cloud-first. Many of our solutions incorporate advanced
technologies such as artificial intelligence, natural language
processing, robotic process automation, and predictive analytics.
Our development teams use customer-centric, contextual design and
develop solutions based on the scaled agile framework. Our
solutions are sold by our own sales teams or through selected
distribution partners.
Strategic priorities 2022-2024At the start of
this year, we rolled out our new three-year strategic plan, which
has three strategic priorities:
- Accelerate Expert Solutions: we intend to
focus our investments on cloud-based expert solutions while
continuing to transform selected digital information products into
expert solutions. We will invest to enrich the customer experience
of our products by leveraging advanced data analytics.
- Expand Our Reach: we will seek to extend
organically into high-growth adjacencies along our customer
workflows and adapt our existing products for new customer
segments. We plan to further develop partnerships and ecosystems
for our key software platforms.
- Evolve Core
Capabilities: we intend to enhance our central functions
to drive excellence and scale economies, mainly in sales and
marketing (go-to-market) and in technology. We plan to advance our
environmental, social, and governance (ESG) performance and
capabilities and to continue investing in diverse and engaged
talent to support innovation and growth.
We expect this strategy to support good organic growth and
improved margins and returns over the coming three years. While the
strategy remains centered on organic growth, we may make selected
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. We expect that group-wide product
development spend will remain at approximately 10% of total
revenues in the next three years.
Our strategy aims to achieve high levels of customer
satisfaction and an engaged, talented, and diverse workforce, to
maintain strong corporate governance and secure systems, and to
drive efficient operations that meet environmentally-sound
practices. Two key strategic ESG goals for the coming three years
are to drive an improvement in our belonging score4 and to start
aligning our reporting with the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD).
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
2022Wolters 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 23, 2022, the interim dividend for 2022
was set at 40% of the prior year total dividend. This results in an
interim dividend of €0.63 per share, to be distributed on September
22, 2022, to holders of ordinary shares, or September 29, 2022, 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 2022 ExpandedAs 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.
On February 23, 2022, we announced our intention to repurchase
shares for up to €600 million during 2022. Today, we are announcing
an increase in this program to €1 billion. 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.
In the year to date, through August 2, 2022, we have repurchased
€356 million in shares (3.8 million shares at an average price of
€92.89). Included in these amounts was a block trade of 522,954
shares purchased for €46.1 million on February 24, 2022, to offset
the issuance of incentive shares. See Note 10 for further
information on issued share capital.
For the period starting August 4, 2022, up to and including
October 31, 2022, we have mandated third parties to execute €400
million in share buybacks on our behalf while for the period
starting November 3, 2022, up to and including December 28, 2022,
we have mandated another third party to execute €244 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. The maximum number of shares
which may be acquired will not exceed the authorization granted by
the General Meeting of Shareholders. Repurchased shares are added
to and held as treasury shares and will be used for capital
reduction purposes or to meet future obligations arising from
share-based incentive plans.
Share Cancellation 2022At the 2022 Annual
General Meeting of April 21, 2022, shareholders approved a
resolution to cancel for capital reduction purposes any or all
ordinary shares held in treasury or to be acquired by the company,
up to a maximum of 10% of issued share capital. As of August 2,
2022, Wolters Kluwer held 7.5 million shares in treasury. As
authorized by shareholders, the Executive Board has determined the
number of ordinary shares to be cancelled this year is 5.0 million.
Wolters Kluwer intends to cancel these shares in the second half of
2022. The remaining treasury shares will be retained in order to
meet future obligations under share-based incentive plans.
Net Debt, Leverage, Sustainability-Linked Credit
Facility, and Liquidity PositionNet debt on June 30, 2022,
was €2,203 million, compared to €2,131 million on December 31,
2021. The net-debt-to-EBITDA ratio was 1.3x (FY 2021: 1.4x;
HY 2021: 1.7x).
Our multi-currency credit facility remains fully undrawn.
Effective July 2022, we agreed to the final one-year extension of
this €600 million multi-currency credit facility, such that the
facility will now mature in 2025. The facility is
sustainability-linked, with pricing tied to four ESG key
performance indicators.
Our liquidity position remains strong with, as of June 30, 2022,
net cash available of €1,019 million6, partly offset by outstanding
Euro Commercial Paper (ECP) of €100 million.
Half-Year 2022 Results
Benchmark FiguresGroup revenues were €2,600
million, up 14% overall benefitting from the appreciation of the
U.S. dollar against the euro. Excluding the effect of exchange rate
movements, revenues increased 7% in constant currencies. Excluding
also the net effect of acquisitions and divestments, organic
revenue growth was 7% (HY 2021: 5%).
Revenues from North America accounted for 64% of total group
revenues and grew 7% organically (HY 2021: 5%). Revenues
from Europe, 29% of total revenues, grew 6% organically (HY 2021:
5%). Revenues from Asia Pacific and Rest of World, 7% of total
revenues, grew 11% organically (HY 2021: 3%).
Adjusted operating profit was €734 million (HY 2021: €613
million), an increase of 10% in constant currencies. The adjusted
operating profit margin increased 130 basis points to 28.2% (HY
2021: 26.9%). The increase in adjusted operating profit margin
mainly reflects strong operational gearing and favorable currency
mix. Margins were higher than expected due to a slower than
expected post-COVID ramp-up in spending (such as travel) and
hiring. Product development (including CAPEX) increased to 10% of
revenues (HY 2021: 9%).
Included in adjusted operating profit were restructuring
expenses of €3 million
(HY 2021: €2 million).
Adjusted net financing costs were stable at €42 million (HY
2021: €42 million). Included in adjusted net financing costs was a
€13 million net foreign exchange loss (HY 2021: €11 million net
foreign exchange loss) due to the translation of intercompany
balances. Interest income on cash balances increased.
Adjusted profit before tax was €692 million (HY 2021: €571
million), up 21% overall and up 11% in constant currencies.
The benchmark tax rate on adjusted profit before tax increased
to 23.8% (HY 2021: 23.5%), due to a change in our deferred tax
position. Adjusted net profit was €527 million (HY 2021: €437
million), an increase of 21% overall and 10% in constant
currencies.
Diluted adjusted EPS was €2.04 (HY 2021: €1.66), up 23% overall
and up 11% in constant currencies, reflecting the increase in
adjusted net profit and a 1.7% reduction in the diluted weighted
average number of shares outstanding to 258.2 million (HY
2021: 262.7 million).
IFRS Reported FiguresReported operating profit
increased 23% to €640 million (HY 2021: €519 million). The increase
reflects the increase in adjusted operating profit and lower
divestment-related losses, partly offset by an impairment of
certain Health assets.
Reported financing results amounted to a net cost of €43 million
(HY 2021: €43 million cost).
The reported effective tax rate decreased to 23.7% (HY 2021:
24.4%); the prior period reflected a divestment-related loss that
was not tax-deductible.
Net profit for the first half increased 26% overall to €455
million (HY 2021: €360 million) and diluted earnings per
share increased 29% to €1.76 (HY 2021: €1.37).
Cash FlowAdjusted operating cash flow was €703
million (HY 2021: €659 million), down 1% in constant currencies.
The cash conversion ratio decreased to 96% (HY 2021: 108%) due to
lower working capital inflows and higher capital expenditure
compared to the prior period, as expected. Capital expenditures
were €139 million (HY 2021: €107 million), representing
5.4% of revenues (HY 2021: 4.7%).
Cash payments related to leases, including lease interest paid,
were €39 million (HY 2021: €38 million). Depreciation of
physical assets, amortization and impairment of internally
developed software, and depreciation of right-of-use assets totaled
€143 million (HY 2021: €137 million), broadly in line with the
prior period.
Net interest paid, excluding lease interest paid, was €42
million, broadly in line with the prior period (HY 2021: €44
million).
Income tax paid increased to €175 million (HY 2021: €127
million), as expected. The net cash outflow related to
restructuring was lower than a year ago at €4 million (HY 2021:
outflow of €20 million). Consequently, adjusted free cash flow was
€497 million (HY 2021: €476 million), up 4% overall but down 4% in
constant currencies.
Total acquisition spending, net of cash acquired and including
transaction costs, was €71 million (HY 2021:
€99 million), primarily relating to the acquisition of IDS in
Governance, Risk & Compliance on April 8, 2022. Dividends paid
to shareholders amounted to €264 million (HY 2021: €233 million),
representing the final dividend of financial year 2021. Through
June 30, 2022, cash deployed towards the 2022 share repurchase
program totaled €302 million (HY 2021: €201 million).
ESG7 Developments
Advancing our ESG performance and capabilities is core to our
strategy. We are focused on delivering high levels of customer
satisfaction and innovative, impactful solutions and services; we
are nurturing an engaged, talented, and diverse workforce; we are
supporting strong ethics, compliance and governance, investing in
highly secure systems, and striving to reduce our carbon
footprint.
In the first half of 2022, we made progress in several areas. We
further expanded initiatives designed to attract and retain talent
amid tightened global markets for technology and other skilled
professionals. To drive recruitment, we expanded talent acquisition
capabilities and invested in partnerships and tools to enlarge
candidate sourcing, be more visible, and increase our diversity
outreach. To support both recruitment and retention, we expanded
our career development work and other initiatives designed to
support continued high levels of employee engagement and improve
belonging.
In February 2022, we committed to aligning our practices and
reporting to the recommendations of the Task Force on
Climate-related Disclosures (TCFD) and to setting science-based
targets. With regard to this commitment, we have this year made
improvements to our existing procedures for scope 1 and scope 2
data collection in order to expand coverage and establish a more
accurate baseline. With external advisors, we have developed a
roadmap to implement the TCFD recommendations and have made
progress on identifying and assessing material scope 3 emissions
categories.
In the meantime, we continue to drive forward existing programs
that reduce our emissions: in the first half, our real estate
rationalization program delivered a further 3% organic reduction in
office footprint (m2) around the world, following a 7% organic
reduction in 2021. Our cloud migration and on-premise server
decommissioning program is making steady progress: as of June 30,
2022, the number of on-premise servers decommissioned this year
exceeds 450 as we migrate customers and applications to more
energy-efficient cloud infrastructure.
Divisional Review
Organic growth and margin performance was strong across all four
divisions.
Divisional Summary – Six months ended June 30 |
|
€ million (unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
|
Revenues |
|
|
|
|
|
|
Health |
674 |
579 |
+16% |
+6% |
+6% |
|
Tax & Accounting |
843 |
732 |
+15% |
+9% |
+9% |
|
Governance, Risk & Compliance |
638 |
544 |
+17% |
+7% |
+6% |
|
Legal & Regulatory |
445 |
425 |
+5% |
+3% |
+6% |
|
Total revenues |
2,600 |
2,280 |
+14% |
+7% |
+7% |
|
Adjusted operating profit |
|
|
|
|
|
|
Health |
216 |
181 |
+19% |
+8% |
+8% |
|
Tax & Accounting |
270 |
229 |
+18% |
+10% |
+10% |
|
Governance, Risk & Compliance |
206 |
175 |
+18% |
+7% |
+6% |
|
Legal & Regulatory |
69 |
53 |
+31% |
+27% |
+36% |
|
Corporate |
(27) |
(25) |
+11% |
+8% |
+8% |
|
Total adjusted operating profit |
734 |
613 |
+20% |
+10% |
+11% |
|
Adjusted operating profit margin |
|
|
|
|
|
|
Health |
32.0% |
31.2% |
|
|
|
|
Tax & Accounting |
32.0% |
31.3% |
|
|
|
|
Governance, Risk & Compliance |
32.2% |
32.1% |
|
|
|
|
Legal & Regulatory |
15.6% |
12.5% |
|
|
|
|
Total adjusted operating profit margin |
28.2% |
26.9% |
|
|
|
∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆
OG: % Organic growth. |
|
Total recurring revenues, which include subscriptions and other
renewing revenue streams, accounted for 81% of total revenues in HY
2022 (HY 2021: 81%) and grew 7% organically (HY 2021: 5%). Digital
and service subscriptions grew 8% organically (HY 2021: 6%) while
print subscriptions declined 8% organically (HY 2021: 4% decline).
Among non-recurring revenue streams, print books posted 13% organic
growth (HY 2021: 16%) with growth in Health and Tax &
Accounting books outweighed by a decline in Legal & Regulatory
books. GRC transactional revenues slowed modestly to 2% organic
growth (HY 2021: 3%), with mixed trends. Other non-recurring
revenues, mostly software licenses and related services, increased
8% organically (HY 2021: 3% growth).
Revenues by Type – Six months ended June 30 |
€ million (unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Digital and service subscription |
1,890 |
1,637 |
+15% |
+8% |
+8% |
Print
subscription |
76 |
81 |
-5% |
-8% |
-8% |
Other
recurring |
135 |
133 |
+1% |
-7% |
+3% |
Total recurring
revenues |
2,101 |
1,851 |
+14% |
+6% |
+7% |
Print
books |
55 |
55 |
+1%5 |
-4% |
+13% |
LS
transactional (GRC) |
146 |
126 |
+16% |
+5% |
+3% |
FS
transactional (GRC) |
65 |
57 |
+13% |
+3% |
-2% |
Other
non-recurring |
233 |
191 |
+21% |
+16% |
+8% |
Total
non-recurring revenues |
499 |
429 |
+16% |
+8% |
+6% |
Total revenues |
2,600 |
2,280 |
+14% |
+7% |
+7% |
∆: %
Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆ OG: %
Organic growth. Other non-recurring revenues include software
licenses, software implementation fees, professional services, and
other non-subscription offerings. LS = Legal Services; FS =
Financial Services. |
Health
- Clinical Solutions grew 8% organically, mainly driven by
UpToDate and drug information.
- Learning, Research & Practice grew 4% organically despite a
challenging comparable.
- Margin increase reflects operational gearing and the mix shift
towards Clinical Solutions.
Health – Six months ended June 30 |
€ million (unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Revenues |
674 |
579 |
+16% |
+6% |
+6% |
Adjusted
operating profit |
216 |
181 |
+19% |
+8% |
+8% |
Adjusted
operating profit margin |
32.0% |
31.2% |
|
|
|
Operating
profit |
180 |
165 |
+9% |
|
|
Net capital
expenditure |
19 |
14 |
|
|
|
Ultimo FTEs |
3,003 |
2,829 |
|
|
|
∆: %
Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆ OG: %
Organic growth. |
Wolters Kluwer Health revenues increased 6% in constant
currencies and 6% organically (HY 2021: 8%). Adjusted operating
profit increased 8% in constant currencies and 8% on an organic
basis, mainly reflecting operational gearing and the mix shift
towards Clinical Solutions. IFRS operating profit included a €20
million impairment on the acquired identifiable intangible assets
of Learner’s Digest.
Clinical Solutions (55% of divisional revenues)
delivered 8% organic revenue growth (HY 2021: 6%). UpToDate
(clinical decision support) and our drug information solutions
posted high single-digit organic growth, supported by renewals and
new customer wins. At UpToDate, the U.S. and international business
continue to achieve similar organic growth rates. Emmi, our patient
engagement solution, achieved high single-digit organic revenue
growth driven by new customer wins and upselling. Revenues in
surveillance and compliance software and medical terminology
solutions were soft on an underlying basis.
Health Learning, Research & Practice (45%
of divisional revenues) posted 4% organic revenue growth despite a
challenging comparable (HY 2021: 11%). Print book revenues were
better than expected, up 42% organically, driven by a combination
of restocking by and favorable timing of orders from book
distributors (HY 2021: 41% increase). We expect print book trends
to decline in the second half. Ovid, our online medical research
platform, achieved good organic growth driven by subscription
renewals globally. The recently launched Ovid Synthesis Clinical
Evidence Manager, which helps improve patient outcomes, has
generated good interest in the hospital market. Digital learning
solutions for nursing schools and students, such as Lippincott
CoursePoint+, performed well against a challenging comparable.
Revenues from our continuing medical education solutions for
physicians (Learner’s Digest) declined further.
Tax & Accounting
- Corporate Performance up 9% organically, driven by CCH
Tagetik.
- Professional Tax & Accounting growth partly reflects timing
and non-recurring factors.
- Margin increase reflects strong operational gearing partly
offset by increased investment.
Tax & Accounting – Six months ended June
30 |
€ million (unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Revenues |
843 |
732 |
+15% |
+9% |
+9% |
Adjusted
operating profit |
270 |
229 |
+18% |
+10% |
+10% |
Adjusted
operating profit margin |
32.0% |
31.3% |
|
|
|
Operating
profit |
252 |
187 |
+35% |
|
|
Net capital
expenditure |
47 |
34 |
|
|
|
Ultimo FTEs |
7,593 |
7,116 |
|
|
|
∆: %
Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆ OG: %
Organic growth. |
Wolters Kluwer Tax & Accounting revenues increased 9% in
constant currencies. The impact of the deconsolidation of ProSoft
(Brazil) on June 1, 2021, was offset by the impact of the
acquisition of Vanguard Software on May 14, 2021, and a small
product transfer8. Organic revenue growth was 9% (HY 2021:
6%). Adjusted operating profit rose 10% in constant currencies, as
strong operational gearing more than offset increased investment.
IFRS operating profit increased 35%, reflecting the absence of last
year’s divestment-related loss on the ProSoft transaction.
Corporate Performance9 (15% of divisional
revenues) grew 9% organically (HY 2021: 11%), led by CCH Tagetik,
our global performance management platform. CCH Tagetik sustained
double-digit organic growth, driven by subscription revenues for
the cloud version and by implementation services. The integration
of Vanguard with CCH Tagetik is progressing well. Our U.S.
Corporate Tax unit (including SureTax) has been brought together
with CCH Tagetik and Vanguard to develop synergies in the North
American market.
North America Professional Tax &
Accounting9 (53% of divisional revenues) recorded organic
growth of 10% (HY 2021: 5%) benefitting from a few timing and
non-recurring factors: higher than expected transactional fee
revenue during the U.S. tax filing season, a surge in demand for
outsourced professional services, and early print book orders. CCH
Axcess, our cloud-based platform for U.S. professional firms,
enjoyed accelerated growth in subscription revenues driven by
renewals, new sales, and strong uptake of its Document, Practice,
and Workstream modules. The audit solution, Engagement, also
performed strongly. Our U.S. publishing unit recorded 7% organic
growth with print books up 15%. TeamMate posted single-digit
organic growth and is being aligned with our external audit
solutions.
Europe Professional Tax & Accounting8 (27%
of divisional revenues) posted 6% organic growth (HY 2021: 5%) with
strong performances across all countries. Recurring software
maintenance and cloud subscription revenues sustained robust
organic growth. The European business continues to invest in
building cloud and hybrid-cloud solutions to support European tax
advisors and their clients.
Asia Pacific & Rest of World Professional Tax &
Accounting (5% of divisional revenues) revenues were up 6%
organically with by double-digit organic growth in China partly
offset by weakness in other parts of Asia Pacific.
Governance, Risk & Compliance
- Governance, Risk & Compliance grew 6% organically supported
by subscription revenues.
- Transactional revenue growth slowed overall, as expected, with
diverging trends by category.
- Stable margin mainly reflects operational gearing offset by
increased investment.
Governance, Risk & Compliance – Six months ended June
30 |
€ million (unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Revenues |
638 |
544 |
+17% |
+7% |
+6% |
Adjusted
operating profit |
206 |
175 |
+18% |
+7% |
+6% |
Adjusted
operating profit margin |
32.2% |
32.1% |
|
|
|
Operating
profit |
184 |
155 |
+19% |
|
|
Net capital
expenditure |
46 |
35 |
|
|
|
Ultimo FTEs |
4,798 |
4,454 |
|
|
|
∆: %
Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆ OG: %
Organic growth. |
Wolters Kluwer Governance, Risk & Compliance (GRC) revenues
increased 7% in constant currencies, including the acquisitions of
LicenseLogix on October 29, 2021, and IDS on April 8, 2022. Organic
growth was 6% (HY 2021: 2%). The adjusted operating profit margin
was broadly stable, with strong operational gearing offset by
increased investment and the absence of last year’s revenues and
margin related to the PPP10. IFRS operating profit rose 19% largely
reflecting the increase in adjusted operating profit.
Legal Services (56% of divisional revenues)
posted 6% organic growth (HY 2021: 9%). CT Corporation
recorded good but slower organic growth, with transactional volumes
facing a challenging comparable. CT’s recurring service
subscriptions saw an improvement in organic growth. The integration
of LicenseLogix, provider of business licenses and permitting
services, is on track. Enterprise Legal Management (ELM) recorded
significantly improved organic growth driven by growth in services
and higher transactional volumes.
Financial Services (44% of divisional revenues)
achieved 7% organic growth (HY 2021: decline of 6%). Compliance
Solutions, which provides lending software and services to banks,
posted 4% organic growth, as strong organic growth in eOriginal
subscription revenues was partly offset by an expected decline in
transaction revenues due to the completion of the PPP program and
slower growth in mortgage volumes. The integration of recently
acquired IDS is underway and on track. Lien Solutions, now part of
Compliance Solutions, posted 19% organic revenue growth driven by a
recovery in UCC search and filing volumes and continued strong
growth in motor vehicle title and registration services.
Finance, Risk & Reporting, which provides regulatory
reporting and risk solutions to banks, posted robust organic
growth, compared to a modest decline a year ago, driven by
professional services and new sales. Finance, Risk & Reporting
suspended business in Russia and Belarus. These countries
represented less than 0.5% of group revenues in 2021 and HY
2022.
Legal & Regulatory
- EHS/ORM3 & Legal Software (21% of divisional revenues) grew
20% organically.
- Information Solutions (79%) recorded 3% organic growth despite
print declines.
- Margin increase reflects operational gearing and underlying
cost savings.
Legal & Regulatory – Six months ended June
30 |
€ million (unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Revenues |
445 |
425 |
+5% |
+3% |
+6% |
Adjusted
operating profit |
69 |
53 |
+31% |
+27% |
+36% |
Adjusted
operating profit margin |
15.6% |
12.5% |
|
|
|
Operating
profit |
51 |
37 |
+36% |
|
|
Net capital
expenditure |
27 |
24 |
|
|
|
Ultimo FTEs |
4,258 |
4,146 |
|
|
|
∆: %
Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆ OG: %
Organic growth. |
Legal & Regulatory revenues increased 3% in constant
currencies, including the effect of the disposal of the U.S. legal
education business on December 1, 2021. On an organic basis,
revenues grew 6% (HY 2021: 4%). Adjusted operating profit
increased 27% in constant currencies, due to operational gearing
and underlying cost savings. Reported IFRS operating profit
increased 36%, reflecting the increase in adjusted operating
profit, partly offset by a slight increase in amortization of
acquired identifiable intangible assets.
EHS/ORM & Legal Software (21% of divisional
revenues) organic growth was 20% (HY 2021: 4%), led by Enablon in
environmental, health & safety and operational risk management
(EHS/ORM). Enablon recorded double-digit organic growth driven by
higher on-premise software license and implementation fees and
continued strong growth in cloud-based recurring revenues. Legal
Software tools, mainly Kleos and Legisway, delivered steady
double-digit organic growth. On June 28, 2022, we acquired Level
Programs, a provider of legal practice management software in
Spain.
Legal & Regulatory Information Solutions
(79% of divisional revenues) saw revenues decline 1% in constant
currencies due to the impact of the disposal of U.S. legal
education business on December 1, 2021. On an organic basis,
Information Solutions recorded 3% growth (HY 2021: 4%), with
digital products up 7% (HY 2021: 6%). Trends in print revenues
returned to historical rates of decline.
Corporate
Net corporate expenses increased 8% in constant currencies and
8% on an organic basis, largely due to increased spending on third
party services relating to market research and various
projects.
Corporate – Six months ended June 30 |
€ million (unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Adjusted operating profit |
(27) |
(25) |
+11% |
+8% |
+8% |
Operating
profit |
(27) |
(25) |
+11% |
|
|
Net capital
expenditure |
0 |
0 |
|
|
|
Ultimo FTEs |
124 |
125 |
|
|
|
∆: %
Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆ OG: %
Organic growth. |
Risk Management
In our 2021 Annual Report, the company described certain risk
categories that could have a material adverse effect on its
operations and financial position. Those risk categories are deemed
to be incorporated and repeated in this report by reference. In the
company’s view, the nature and potential impact of these risk
categories on the business are not materially different for the
second half of 2022.
Statement by the Executive Board The Executive
Board is responsible for the preparation of the 2022 Half-Year
Report, which includes the Interim Report of the Executive Board
and the condensed consolidated interim financial statements for the
six months ended June 30, 2022. The condensed consolidated interim
financial statements for the six months ended June 30, 2022, are
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union. The
responsibility of the Executive Board includes selecting and
applying appropriate accounting policies and making accounting
estimates that are reasonable in the circumstances.
The Interim Report of the Executive Board endeavors to present a
fair review of the situation of the business at the balance sheet
date and of the state of affairs in the half-year under review.
Such an overview contains a selection of some of the main
developments in the first six months of the financial year and can
never be exhaustive. This Interim Report also contains the current
expectations of the Executive Board for the second half of the
financial year. With respect to these expectations, reference is
made to the disclaimer about forward-looking statements on page 35
of this half-year report. As required by provision 5:25d (2)(c) of
the Dutch Financial Markets Supervision Act (Wet op het financieel
toezicht) and on the basis of the foregoing, the Executive Board
confirms that to its knowledge:
- The condensed consolidated interim
financial statements for the six months ended June 30, 2022, give a
true and fair view of the assets, liabilities, financial position,
and profit or loss of the company and the undertakings included in
the consolidation taken as a whole; and
- The Interim Report of the Executive
Board includes a fair overview of the situation at the balance
sheet date, the course of affairs during the first six months of
the financial year of the company and the undertakings included in
the consolidation taken as a whole, and the reasonably to be
expected course of affairs for the second half of 2022 as well as
an indication of important events that have occurred during the six
months ended June 30, 2022, and their impact on the condensed
consolidated interim financial statements, together with a
description of the principal risks and uncertainties for the second
half of 2022, and also includes the major related parties
transactions entered into during the six months ended June 30,
2022.
Alphen aan den Rijn, August 2, 2022
Executive Board
N. McKinstry, CEO and Chair of the Executive Board
K. B. Entricken, CFO and Member of the Executive Board
The content of this Half-Year Report has not been audited or
reviewed by an independent external auditor.
CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
Unaudited Condensed Consolidated Interim Financial
Statements for the six months ended June 30, 2022,
and 2021
Unaudited Condensed Consolidated Interim Statement of Profit or
LossUnaudited Condensed Consolidated Interim Statement of
Comprehensive IncomeUnaudited Condensed Consolidated Interim
Statement of Cash FlowsUnaudited Condensed Consolidated Interim
Statement of Financial PositionUnaudited Condensed Consolidated
Interim Statement of the Changes in Total EquityNotes to the
Unaudited Condensed Consolidated Interim Financial Statements
Unaudited Condensed Consolidated Interim Statement of
Profit or Loss
(in millions of euros, unless otherwise stated) |
Note |
Six months ended June 30 |
|
|
2022 |
2021 |
|
|
|
|
Revenues |
5 |
2,600 |
2,280 |
Cost of revenues |
|
(738) |
(646) |
Gross profit |
|
1,862 |
1,634 |
|
|
|
|
Sales costs |
|
(417) |
(365) |
General and administrative costs |
|
(799) |
(716) |
Total operating expenses |
|
(1,216) |
(1,081) |
|
|
|
|
Other gains and (losses) |
|
(6) |
(34) |
Operating profit |
|
640 |
519 |
|
|
|
|
Financing results |
|
(43) |
(43) |
Share of profit of equity-accounted investees, net of tax |
|
0 |
0 |
Profit before tax |
|
597 |
476 |
|
|
|
|
Income tax expense |
|
(142) |
(116) |
|
|
|
|
Profit for the period |
|
455 |
360 |
|
|
|
|
Attributable to: |
|
|
|
|
|
455 |
360 |
- Non-controlling interests
|
|
0 |
0 |
Profit for the
period |
|
455 |
360 |
|
|
|
|
Earnings per share (EPS) (€) |
|
|
|
Basic EPS |
|
1.77 |
1.38 |
Diluted
EPS |
|
1.76 |
1.37 |
|
|
|
|
Unaudited Condensed Consolidated Interim Statement of
Comprehensive Income
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
|
Comprehensive income: |
|
|
Profit for the period |
455 |
360 |
|
|
|
Other comprehensive income: |
|
|
Items that are or may be reclassified subsequently to the statement
of profit or loss: |
|
|
Exchange differences on translation of foreign operations |
308 |
|
108 |
Recycling of foreign exchange differences on loss of control |
– |
|
26 |
Net gains/(losses) on hedges of net investments |
(15) |
|
(6) |
Net gains/(losses) on cash flow hedges |
27 |
|
9 |
|
|
|
|
Items that will not be reclassified to the statement of profit or
loss: |
|
|
|
Remeasurements on defined benefit plans |
(4) |
0 |
Other comprehensive income/(loss) for the period, before tax |
316 |
137 |
|
|
|
Income tax on other comprehensive income |
1 |
0 |
|
|
|
Other comprehensive income/(loss) for the period, net of
tax |
317 |
137 |
|
|
|
Total comprehensive income for the period |
772 |
497 |
|
|
|
Attributable to: |
|
|
|
772 |
496 |
- Non-controlling interests
|
0 |
1 |
Total |
772 |
497 |
Unaudited Condensed Consolidated Interim Statement of
Cash Flows
(in millions of euros) |
Note |
Six months ended June 30 |
|
2022 |
2021 |
Cash flows from operating activities |
|
|
Profit for the period |
455 |
360 |
Adjustments for: |
|
|
Income tax expense |
142 |
|
116 |
|
Share of profit of equity-accounted investees, net of tax |
0 |
|
0 |
|
Financing results |
43 |
|
43 |
|
Amortization, impairment, and depreciation |
231 |
|
197 |
|
Book (profit)/loss on disposal of operations and non-current
assets |
1 |
|
28 |
|
Changes in employee benefit provisions |
3 |
|
0 |
|
Additions to and releases from provisions |
0 |
|
5 |
|
Appropriation of provisions |
(5) |
|
(20) |
|
Share-based payments |
12 |
|
10 |
|
Autonomous movements in working capital |
4 |
|
54 |
|
Other adjustments |
1 |
|
(5) |
|
Total adjustments |
432 |
428 |
|
|
|
Interest paid and received (including the interest portion of lease
payments) |
(46) |
(48) |
Paid income tax |
(175) |
(127) |
Net cash from operating activities |
666 |
613 |
|
|
|
Cash flows from investing activities |
|
|
Net capital expenditure |
(139) |
(107) |
Acquisition spending, net of cash
acquired |
7 |
(69) |
(96) |
Receipts from divestments, net of cash disposed |
7 |
(1) |
1 |
Net cash used in investing activities |
(209) |
(202) |
|
|
|
Cash flows from financing activities |
|
|
Repayment of loans |
(1) |
0 |
Proceeds from new loans |
100 |
525 |
Repayment of principal portion of lease liabilities |
(35) |
(34) |
Repurchased shares |
(302) |
(201) |
Dividends paid |
(264) |
(233) |
Net cash from/(used in) financing activities |
(502) |
57 |
|
|
|
Net cash flow before effect of exchange
differences |
(45) |
468 |
|
|
|
Exchange differences on cash and cash equivalents and bank
overdrafts |
74 |
27 |
Net change in cash and cash equivalents less bank overdrafts |
29 |
495 |
|
|
|
Cash and cash equivalents less bank overdrafts at January 1 |
994 |
364 |
Cash and cash equivalents less bank overdrafts at June
30 |
1,023 |
859 |
|
|
|
Add: Bank overdrafts used for cash management purposes at June
30 |
79 |
92 |
Less: included in assets held for sale at June 30 |
(4) |
– |
Cash and cash equivalents at June 30 in the statement
of financial position |
1,098 |
951 |
Unaudited Condensed Consolidated Interim Statement of
Financial Position
(in millions of euros) |
Note |
June 30, 2022 |
December 31, 2021 |
June 30, 2021 |
Goodwill |
|
4,444 |
|
4,180 |
|
4,118 |
|
|
Intangible assets other than goodwill |
|
1,670 |
|
1,620 |
|
1,667 |
|
|
Property, plant, and equipment |
|
83 |
|
75 |
|
80 |
|
|
Right-of-use assets |
|
306 |
|
301 |
|
323 |
|
|
Investments in equity-accounted investees |
|
10 |
|
10 |
|
8 |
|
|
Financial assets and other receivables |
|
35 |
|
23 |
|
27 |
|
|
Contract assets |
|
18 |
|
19 |
|
17 |
|
Deferred tax assets |
|
66 |
|
62 |
|
91 |
|
|
Total non-current assets |
|
|
6,632 |
|
6,290 |
|
6,331 |
|
|
|
|
|
|
|
|
|
|
Inventories |
|
73 |
|
65 |
|
71 |
|
|
Contract assets |
|
163 |
|
138 |
|
135 |
|
|
Trade and other receivables |
|
1,279 |
|
1,374 |
|
1,155 |
|
|
Current income tax assets |
|
81 |
|
59 |
|
37 |
|
|
Cash and cash equivalents |
|
1,098 |
|
1,001 |
|
951 |
|
|
Assets classified as held for sale |
8 |
104 |
|
101 |
|
– |
|
|
Total current assets |
|
|
2,798 |
|
2,738 |
|
2,349 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
9,430 |
|
9,028 |
|
8,680 |
|
|
|
|
|
|
|
|
|
|
Issued share capital |
|
32 |
|
32 |
|
32 |
|
|
Share premium reserve |
|
87 |
|
87 |
|
87 |
|
|
Other reserves |
|
2,512 |
|
2,298 |
|
2,039 |
|
|
Equity attributable to the owners of the company |
|
|
2,631 |
|
2,417 |
|
2,158 |
|
Non-controlling interests |
|
|
0 |
|
0 |
|
0 |
|
Total equity |
|
|
2,631 |
|
2,417 |
|
2,158 |
|
|
|
|
|
|
|
|
|
|
Long-term debt, excl. lease liabilities |
9 |
2,079 |
|
2,791 |
|
2,790 |
|
|
Lease liabilities |
9 |
258 |
|
260 |
|
280 |
|
|
Deferred tax liabilities |
|
284 |
|
294 |
|
327 |
|
|
Employee benefits |
|
99 |
|
90 |
|
116 |
|
|
Provisions |
|
8 |
|
7 |
|
6 |
|
|
Non-current deferred income |
|
135 |
|
113 |
|
111 |
|
|
Total non-current liabilities |
|
|
2,863 |
|
3,555 |
|
3,630 |
|
|
|
|
|
|
|
|
|
|
Deferred income |
|
1,809 |
|
1,709 |
|
1,597 |
|
|
Other contract liabilities |
|
86 |
|
80 |
|
65 |
|
|
Trade and other payables |
|
813 |
|
944 |
|
733 |
|
|
Current income tax liabilities |
|
166 |
|
142 |
|
174 |
|
|
Short-term provisions |
|
22 |
|
27 |
|
33 |
|
|
Borrowings and bank overdrafts |
9 |
179 |
|
9 |
|
217 |
|
|
Short-term bonds |
9 |
700 |
|
– |
|
– |
|
|
Short-term lease liabilities |
9 |
79 |
|
71 |
|
73 |
|
|
Liabilities classified as held for sale |
8 |
82 |
|
74 |
|
– |
|
|
Total current liabilities |
|
|
3,936 |
|
3,056 |
|
2,892 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
6,799 |
|
6,611 |
|
6,522 |
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities |
|
|
9,430 |
|
9,028 |
|
8,680 |
|
Unaudited Condensed Consolidated Interim Statement of
Changes in Total Equity
(in millions of euros) |
|
|
|
2022 |
|
|
Equity attributable to the owners of the company |
Non-controlling interests |
Total equity |
Balance at January 1, 2022 |
|
2,417 |
0 |
2,417 |
|
|
|
|
|
Total comprehensive income for the period |
|
772 |
0 |
772 |
Share-based payments |
|
12 |
– |
12 |
Final cash dividend 2021 |
|
(264) |
0 |
(264) |
Repurchased shares |
|
(306) |
– |
(306) |
Balance at June 30, 2022 |
|
2,631 |
0 |
2,631 |
(in millions of euros) |
|
|
|
2021 |
|
|
Equity attributable to the owners of the company |
Non-controlling interests |
Total equity |
Balance at January 1, 2021 |
|
2,087 |
0 |
2,087 |
|
|
|
|
|
Total comprehensive income for the period |
|
496 |
1 |
497 |
Share-based payments |
|
10 |
– |
10 |
Final cash dividend 2020 |
|
(232) |
(1) |
(233) |
Repurchased shares |
|
(203) |
– |
(203) |
Balance at June 30, 2021 |
|
2,158 |
0 |
2,158 |
Notes to the Unaudited Condensed Consolidated Interim
Financial Statements
Note 1 Reporting
entity
Wolters Kluwer N.V. (the company) with its subsidiaries
(together referred to as 'the group', and individually as ‘group
entities’) is a global provider of professional information,
software solutions, and services for clinicians, nurses,
accountants, lawyers, and tax, finance, audit, risk, compliance,
and regulatory sectors. Our expert solutions combine deep domain
knowledge with technology to deliver both content and workflow
automation to drive improved outcomes and productivity for our
customers.
These unaudited condensed consolidated interim financial
statements (interim financial statements) for the six months ended
June 30, 2022, comprise the group and the group’s interests in
associates.
Note 2 Basis of
preparation
Statement of complianceThese interim financial
statements have been prepared in accordance with International
Accounting Standards (IAS) 34 Interim Financial Reporting, as
adopted by the European Union. As such, the financial statements do
not include all the information required for a complete set of IFRS
financial statements. However, selected explanatory notes are
included to explain events and transactions that are significant to
get an understanding of the changes in the group’s financial
position and performance since the last annual consolidated
financial statements for the year ended December 31, 2021.
The interim financial statements for the six months period ended
June 30, 2022, have been abridged from Wolters Kluwer’s 2021
Financial Statements as part of the 2021 Annual Report. These
interim financial statements have not been audited or reviewed by
the external auditor. The interim financial statements were
authorized for issue by the Executive Board and Supervisory Board
on August 2, 2022.
Accounting policies The accounting policies
applied in these interim financial statements are the same as those
applied in the 2021 Financial Statements, apart from the effect of
the following new accounting standards and amendments which became
effective as of January 1, 2022:
- References to the Conceptual Framework (Amendments to IFRS
3);
- Property, Plant, and Equipment – Proceeds before intended use
(Amendments to IAS 16); and
- Onerous contracts – Cost of Fulfilling a Contract (Amendments
to IAS 37).
These amendments did not have any impact on the amounts
recognized in the current or prior periods and are not expected to
significantly affect future periods.
Effect of forthcoming accounting standardsA
number of new standards and amendments are not yet effective for
the year ending December 31, 2022, and have not been early adopted
in these interim financial statements. The group expects no
significant changes as a result of these new standards and
amendments.
Functional and presentation currencyThe interim
financial statements are presented in euros, which is the company’s
functional and presentation currency. Unless otherwise indicated,
the financial information in these interim financial statements is
in euros and has been rounded to the nearest million.
Exchange rates to the euro |
2022 |
2021 |
U.S. dollar (at June 30) |
1.05 |
1.20 |
U.S. dollar (average six months) |
1.10 |
1.21 |
U.S. dollar (at December 31) |
|
1.13 |
Judgments and estimates The preparation of the
interim financial statements in conformity with IFRS requires
management to make judgments, estimates, and assumptions that
affect the application of policies and reported amounts of assets,
liabilities, income, and expense.
In preparing these interim financial statements, the significant
judgments made by management in applying the group’s accounting
policies and the key sources of estimation and uncertainty were the
same as those applied to the 2021 Financial Statements (reference
is made to Note 3 – Accounting Estimates and Judgments of the 2021
Financial Statements).
The estimates and underlying assumptions are based on historical
experience and other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of
making the judgments about carrying values of assets and
liabilities that are not clear from other sources. Actual results
may differ from those estimates and may result in material
adjustments in the next financial period(s).
Reference is also made to Note 30 - Financial Risk Management of
the 2021 Financial Statements, which outlines Wolters Kluwer’s
exposure to a variety of risks, including market risk, currency
risk, interest rate risk, liquidity risk, and credit risk. These
risks have not substantially changed since the issuance of our 2021
Annual Report.
Impact of Russian-Ukrainian warIn February
2022, global geopolitical tension began to worsen following the
start of the Russian-Ukrainian war. The repercussions on the global
macroeconomic scenario, already characterized by difficulties in
global supply chains and high inflation rates, are currently highly
uncertain. It is likely that the war between Russia and Ukraine
could have consequences on global economic activities and spending
patterns in current and future periods.
Some suppliers of Wolters Kluwer have operations in Ukraine,
predominantly in technology support services. Wolters Kluwer has
been working closely together with these suppliers to ensure a
minimal impact on our products and services.
Wolters Kluwer has been carefully considering the future of our
customer relationships in Russia and Belarus, where we have a
limited footprint, and, above all, what our actions would mean for
people in the region. We have discontinued doing business in Russia
and Belarus except for certain health products where there are
compelling humanitarian reasons.
Revenues generated in Russia, Belarus, and Ukraine represented
less than 0.5% of group revenues in the first half of 2022 and in
full year 2021. At June 30, 2022, trade receivables regarding
customers based in Russia, Belarus, and Ukraine were neglectable.
The Russian-Ukrainian war did not result in an impairment trigger
on the group’s non-current assets.
Note
3 Seasonality
The overall impact of seasonality on group revenues and costs is
limited. Revenue recognition does not always follow the pattern of
cash flows as the revenues for certain license contracts are
deferred.
Note
4 Benchmark
Figures
Wherever used in these interim financial statements, the term
‘adjusted’ refers to figures adjusted for non-benchmark items and,
where applicable, amortization and impairment of goodwill and
acquired identifiable intangible assets.
Adjusted figures are non-IFRS compliant financial figures, but
are internally regarded as key performance indicators to measure
the underlying performance of the business. These figures are
presented as additional information and do not replace the
information in the consolidated interim statement of profit or loss
and in the consolidated interim statement of cash flows. The term
‘adjusted’ is not a defined term under IFRS.
Reconciliation of benchmark figures
Revenue Bridge
(in millions of euros) |
€ |
% |
|
|
|
Revenues HY 2021 |
2,280 |
|
Organic change |
160 |
7 |
Acquisitions |
9 |
0 |
Divestments |
(15) |
0 |
Currency impact |
166 |
7 |
Revenues HY 2022 |
2,600 |
14 |
U.S. dollar 2022: HY average €/$=1.10 versus 2021: HY average
€/$=1.21
Reconciliation between operating profit and adjusted operating
profit
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
Operating profit |
640 |
519 |
Amortization and impairment of acquired identifiable intangible
assets |
88 |
60 |
Non-benchmark items in operating profit |
6 |
34 |
Adjusted operating profit (A) |
734 |
613 |
For our continuing medical education solutions for physicians
(Learner’s Digest), we identified a triggering event in the first
half of 2022 as expectations of market growth deteriorated. The
group recognized an impairment on the acquired identifiable
intangible assets of €20 million and on other intangible assets of
€3 million, which was included in adjusted operating profit.
Reconciliation between financing results and adjusted net
financing costs
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
Financing results |
(43) |
(43) |
Non-benchmark items in financing results |
1 |
1 |
Adjusted net financing costs |
(42) |
(42) |
Reconciliation between profit for the period and adjusted net
profit
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
Profit for the period attributable to the owners of the
company (B) |
455 |
360 |
Amortization and impairment of acquired identifiable intangible
assets |
88 |
60 |
Tax on amortization and impairment of acquired identifiable
intangible assets and goodwill |
(22) |
(17) |
Non-benchmark items, net of tax |
6 |
34 |
Adjusted net profit (C) |
527 |
437 |
Summary of non-benchmark items
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
Included in other gains and (losses): |
|
|
Divestment-related results |
(4) |
(30) |
Acquisition-related costs |
(2) |
(3) |
Additions to acquisition integration provisions |
0 |
(1) |
Total non-benchmark income/(costs) in operating
profit |
(6) |
(34) |
|
|
|
Included in financing results: |
|
|
Employee benefits financing component |
(1) |
(1) |
Total non-benchmark income/(costs) in financing
results |
(1) |
(1) |
|
|
|
Total non-benchmark items before tax |
(7) |
(35) |
Tax on non-benchmark items |
1 |
1 |
Non-benchmark items, net of tax |
(6) |
(34) |
Reconciliation between net cash from operating activities and
adjusted free cash flow
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
Net cash from operating activities |
666 |
613 |
Net capital expenditure |
(139) |
(107) |
Repayment of principal portion of lease liabilities |
(35) |
(34) |
Acquisition-related costs |
2 |
3 |
Paid divestment expenses |
3 |
2 |
Net tax benefit on divested assets and consolidation of platform
technology |
0 |
(1) |
Adjusted free cash flow (D) |
497 |
476 |
Per share information
(in euros, unless otherwise stated) |
Six months ended June 30 |
|
2022 |
2021 |
|
|
|
Total number of ordinary shares outstanding at June 301) |
255.5 |
260.3 |
Weighted average number of ordinary shares outstanding (E)1) |
257.0 |
261.4 |
Diluted weighted average number of ordinary shares (F)1) |
258.2 |
262.7 |
|
|
|
Adjusted EPS (C/E) |
2.05 |
1.67 |
Diluted adjusted EPS (C/F) |
2.04 |
1.66 |
Diluted adjusted EPS in constant currencies |
1.93 |
1.74 |
|
|
|
Basic EPS (B/E) |
1.77 |
1.38 |
Diluted EPS (B/F) |
1.76 |
1.37 |
|
|
|
Adjusted free cash flow per share (D/E) |
1.93 |
1.82 |
Diluted adjusted free cash flow per share (D/F) |
1.93 |
1.81 |
1) In millions of sharesBenchmark tax rate
(in millions of euros, unless otherwise stated) |
Six months ended June 30 |
|
2022 |
2021 |
|
|
|
Income tax expense |
142 |
116 |
Tax benefit on amortization and impairment of acquired identifiable
intangible assets |
22 |
17 |
Tax benefit/(expense) on non-benchmark items |
1 |
1 |
Tax on adjusted profit before tax (G) |
165 |
134 |
Adjusted net profit (C) |
527 |
437 |
Adjustment for non-controlling interests |
0 |
0 |
Adjusted profit before tax (H) |
692 |
571 |
|
|
|
Benchmark tax rate (G/H) (%) |
23.8 |
23.5 |
Cash conversion ratio
(in millions of euros, unless otherwise stated) |
Six months ended June 30 |
|
2022 |
2021 |
|
|
|
Operating profit |
640 |
519 |
Amortization, impairment, and depreciation |
231 |
197 |
EBITDA |
871 |
716 |
Non-benchmark items in operating profit |
6 |
34 |
Adjusted EBITDA |
877 |
750 |
Autonomous movements in working capital |
4 |
54 |
Net capital expenditure |
(139) |
(107) |
Repayment of principal portion of lease liabilities |
(35) |
(34) |
Interest portion of lease liabilities |
(4) |
(4) |
Adjusted operating cash flow (I) |
703 |
659 |
|
|
|
Adjusted operating profit (A) |
734 |
613 |
|
|
|
Cash conversion ratio (I/A) (%) |
96 |
107 |
Note 5
Segment
Reporting
Divisional revenues and operating profit
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
Revenues |
|
|
Health |
674 |
579 |
Tax &
Accounting |
843 |
732 |
Governance,
Risk & Compliance |
638 |
544 |
Legal & Regulatory |
445 |
425 |
Total revenues |
2,600 |
2,280 |
|
|
|
Operating profit/(loss) |
|
|
Health |
180 |
165 |
Tax &
Accounting |
252 |
187 |
Governance,
Risk & Compliance |
184 |
155 |
Legal &
Regulatory |
51 |
37 |
Corporate |
(27) |
(25) |
Total operating profit |
640 |
519 |
The group disaggregates revenues by media format and by revenue
type as part of the management information discussed by the
Executive Board. Reference is made to Appendix 2 and 3 of this
report.
Note 6
Earnings per
Share
Earnings per share (EPS)
(in millions of euros, unless otherwise stated) |
Six months ended June 30 |
|
2022 |
2021 |
Profit for the period attributable to the owners of the
company (B) |
455 |
360 |
|
|
|
Weighted average number of shares |
|
|
in millions of shares |
|
|
Outstanding ordinary shares at January 1 |
262.5 |
267.5 |
Effect of repurchased shares |
(5.5) |
(6.1) |
Weighted average number of ordinary shares for the period
(E) |
257.0 |
261.4 |
|
|
|
Basic EPS (€) (B/E) |
1.77 |
1.38 |
|
|
|
Diluted weighted average number of shares |
|
|
in millions of shares |
|
|
Weighted average number of ordinary shares for the period (E) |
257.0 |
261.4 |
Long-Term Incentive Plan |
1.2 |
1.3 |
Diluted weighted average number of ordinary shares for the
period (F) |
258.2 |
262.7 |
|
|
|
Diluted EPS (€) (B/F) |
1.76 |
1.37 |
Note
7 Acquisitions
and Divestments
AcquisitionsTotal acquisition spending in the first half of
2022, net of cash acquired, was €69 million (HY 2021:
€96 million).
On April 8, 2022, Wolters Kluwer Governance, Risk &
Compliance completed the acquisition of 100% of the shares of
International Document Services, Inc. (IDS), a leading U.S.
provider of compliance and document generation software solutions
for the mortgage and real estate industry, for €64 million in cash.
The transaction had no deferred and contingent considerations. IDS
serves over 450 clients, including U.S. mortgage lenders, banks and
law firms. IDS’s services include initial disclosures, electronic
signatures, closing documents, and document fulfillment. The IDS
flagship document preparation solution, idsDoc, is a cloud-based
platform that is recognized across the industry for its superior
capabilities, customer service, and integrations with many of the
leading loan origination systems and eClosing platforms. Revenues
are based on transactional pricing linked to mortgage volumes. IDS
is headquartered in Draper, Utah, and employs approximately 75
employees. The fair values of the identifiable assets and
liabilities of IDS, as reported at June 30, 2022, are
provisional.
On June 28, 2022, Wolters Kluwer Legal & Regulatory
completed the acquisition of 100% of the shares of Level Programs
S.L. (Level Programs), a provider of legal practice management
software in Spain, for €5 million in cash and deferred
consideration of €1 million. Level Program’s principal product is
Kmaleon, which is a platform used by mid-sized law firms in Spain
to efficiently manage their cases and documents, billing,
accounting, and time control. Level Programs is headquartered in
Terrassa and employs approximately 25 employees. The fair values of
the identifiable assets and liabilities of Level Programs, as
reported at June 30, 2022, are provisional.
In addition, other smaller acquisitions were completed, with a
combined total consideration of €1 million.
In the first half of 2022, acquisition-related costs were €2
million (HY 2021: €3 million).
The acquisition spending in first half of 2021 was €96 million
and included the acquisition of Vanguard Software Corporation and a
few smaller acquisitions.
Acquisition-related results
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
Consideration payable in cash |
70 |
98 |
Deferred and contingent acquisition payments |
1 |
1 |
Total consideration |
71 |
99 |
|
|
|
Non-current assets |
48 |
32 |
Current assets |
2 |
4 |
Non-current liabilities |
(1) |
(2) |
Current liabilities |
(2) |
(3) |
Deferred tax liabilities |
(11) |
(2) |
Fair value of net identifiable
assets/(liabilities) |
36 |
29 |
|
|
|
Goodwill on acquisitions |
35 |
70 |
|
|
|
Cash effect of the acquisitions: |
|
|
Consideration payable in cash |
70 |
98 |
Cash acquired |
(1) |
(2) |
Deferred and contingent considerations paid |
0 |
0 |
Acquisition spending, net of cash acquired |
69 |
96 |
The fair value of the identifiable assets and liabilities will
be revised if new information, obtained within one year from the
acquisition date, about facts and circumstances that existed at the
acquisition date, causes adjustments to the above amounts, or for
any additional provisions that existed at the acquisition date.
The goodwill relating to the 2022 acquisitions represents future
economic benefits specific to the group arising from assets that do
not qualify for separate recognition as intangible assets. This
includes expected new customers who generate revenue streams in the
future, revenues generated because of new capabilities of the
acquired product platforms, as well as expected synergies that will
arise following the acquisitions.
Of the goodwill recognized in 2022, none was deductible for
income tax purposes (HY 2021: €70 million).
DivestmentsNet disposal proceeds amounted to €(1) million in the
first half of 2022 (HY 2021: €1 million) and included a working
capital settlement paid to the buyer of Legal Education, which was
divested in 2021.
In the first half of 2021, net disposal proceeds amounted to €1
million and included a deferred divestment consideration received.
In addition, certain Prosoft assets in Brazil were combined with
those of Alterdata Tecnologia em Informática Ltda in exchange for
an 11.8% non-controlling interest in the combined entity.
Divestment-related results
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
Divestments of operations: |
|
|
Consideration receivable in cash |
(1) |
– |
Non-controlling interests received, recognized as financial assets
at fair value |
– |
6 |
Consideration receivable |
(1) |
6 |
|
|
|
Non-current assets |
– |
7 |
Current assets |
0 |
2 |
Current liabilities |
0 |
(1) |
Net identifiable assets and liabilities |
0 |
8 |
|
|
|
Reclassification of foreign exchange gain/(loss) on loss of
control, recognized in other comprehensive income |
– |
(26) |
Book profit/(loss) on divestments of
operations |
(1) |
(28) |
|
|
|
Divestment
expenses |
(3) |
(2) |
Divestment-related results, included in other gains and
(losses) |
(4) |
(30) |
|
|
|
Cash effect of divestments: |
|
|
Consideration receivable in cash |
(1) |
– |
Deferred consideration received |
– |
1 |
Cash included in divested operations |
– |
0 |
Receipts from divestments, net of cash
disposed |
(1) |
1 |
Note
8 Assets/Liabilities
Classified as Held for Sale
On December 9, 2021, Wolters Kluwer Legal & Regulatory
announced that it has entered into exclusive discussions to sell
its legal information businesses in France and Spain following
receipt of a binding offer from Karnov Group. Signing of a final
agreement is conditional upon completion of the consultation with
the European and French works councils. Completion of the
transaction would be conditional upon antitrust approval in Spain
and is expected in the second half of 2022. The French and Spanish
legal information units to be sold employ approximately 600
FTEs.
Net assets classified as held for sale
(in millions of euros) |
June 30, 2022 |
December 31, 2021 |
June 30, 2021 |
|
|
|
|
Assets of disposal groups classified as held for sale |
104 |
101 |
– |
Liabilities of disposal groups classified as held for sale |
(82) |
(74) |
– |
Net assets of disposal groups classified as held for
sale |
22 |
27 |
0 |
Assets and liabilities of disposal groups
(in millions of euros) |
June 30, 2022 |
December 31, 2021 |
June 30, 2021 |
|
|
|
|
Non-current assets |
75 |
73 |
– |
Cash and cash equivalents |
4 |
2 |
– |
Other current assets |
25 |
26 |
– |
Non-current liabilities |
(16) |
(14) |
– |
Current liabilities |
(66) |
(60) |
– |
Net assets of disposal groups classified as held for
sale |
22 |
27 |
0 |
Result of disposal groups
The revenues, adjusted operating profit, and operating profit of
the disposal groups can be specified as follows:
(in millions of euros) |
Six months ended June 30 |
|
2022 |
2021 |
|
|
|
Revenues |
42 |
42 |
Adjusted operating profit |
8 |
5 |
Operating profit |
8 |
5 |
Note 9 Net
Debt
Reconciliation gross debt to net debt
(in millions of euros, unless otherwise stated) |
June 30, 2022 |
December 31, 2021 |
June 30, 2021 |
Gross debt |
|
|
|
Bonds |
1,927 |
|
2,625 |
|
2,625 |
|
Private placements |
141 |
|
153 |
|
152 |
|
Other long-term loans |
9 |
|
10 |
|
9 |
|
Deferred and contingent acquisition payments |
2 |
|
1 |
|
0 |
|
Derivative financial instruments |
0 |
|
2 |
|
4 |
|
Long-term debt (excl. lease liabilities) |
2,079 |
2,791 |
2,790 |
|
|
|
|
Lease liabilities |
258 |
260 |
280 |
Total long-term debt |
2,337 |
3,051 |
3,070 |
|
|
|
|
Borrowings and bank overdrafts |
179 |
|
9 |
|
217 |
|
Short-term bonds |
700 |
|
– |
|
– |
|
Short-term lease liabilities |
79 |
|
71 |
|
73 |
|
Deferred and contingent acquisition payments |
1 |
|
1 |
|
1 |
|
Derivative financial instruments |
18 |
|
– |
|
7 |
|
Total short-term debt |
977 |
81 |
298 |
Total gross debt |
3,314 |
3,132 |
3,368 |
|
|
|
|
Minus: |
|
|
|
Cash and cash equivalents |
(1,098) |
(1,001) |
(951) |
Derivative financial instruments: |
|
|
|
Non-current receivable |
(13) |
– |
– |
Net debt |
2,203 |
2,131 |
2,417 |
|
|
|
|
Net-debt-to-EBITDA ratio (on a rolling basis) * |
1.3 |
1.4 |
1.7 |
* Net-debt-to-EBITDA ratio is based on a twelve-months rolling
EBITDA.
Effective July 2022, the group exercised the option to extend
its €600 million multi-currency credit
facility from July 2024 to July 2025.
Note 10 Equity,
LTIP, and Dividends
The group made progress on the 2022 share buyback program of up
to €600 million which was announced on February 23, 2022. In 2022,
up to and including August 2, 2021, the group has completed
repurchases of €356 million (3.8 million ordinary shares at an
average share price of €92.89). This 2022 buyback program has now
been expanded to €1 billion.
For the period starting August 4, 2022, up to and including
October 31, 2022, we have mandated third parties to execute €400
million in share buybacks on our behalf while for the period
starting November 3, 2022, up to and including December 28, 2022,
we have mandated another third party to execute €244 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. The maximum number of shares
which may be acquired will not exceed the authorization granted by
the General Meeting of Shareholders.
Shares repurchased are added to and held as treasury shares and
will be used for capital reduction purposes and to meet obligations
arising from share-based incentive plans. A total of
1.2 million shares were repurchased to offset the dilution
caused by our annual incentive share issuance.
In the first six months of 2022, treasury shares were used for
the vesting of Long-Term Incentive Plan (LTIP) shares; no new
shares were issued. The LTIP 2019-21 vested on December 31, 2021.
Total Shareholder Return (TSR) ranked fourth relative to the peer
group of 15 companies, resulting in a pay-out of 125% of the
conditional base number of shares awarded to the Executive Board
and Senior Management. The EPS-condition based shares resulted in a
pay-out of 150%. A total of 649,774 shares were released on
February 24, 2022.
Under the 2022-24 LTIP grant, 297,358 shares were conditionally
awarded to the Executive Board and other senior managers in the
first six months of 2022. In the first six months of 2022, a total
of 15,392 shares were forfeited under the long-term incentive
plans.
A final dividend of €1.03 per share was approved at the Annual
General Meeting of Shareholders in April 2022 and was paid in the
second quarter. The final dividend brings the total dividend over
the 2021 financial year to €1.57 per share, an increase of 15%
compared to the 2020 dividend. The 2021 dividend of €1.57 per share
amounting to €404 million (2020 dividend: €356 million) was fully
distributed in cash. This 2021 dividend was paid in two parts, an
interim dividend of €140 million in the second half of 2021 and a
final dividend of €264 million in the first half of 2022.
For 2022, the interim dividend will be set at 40% of the prior
year’s total dividend, equivalent to €0.63 per share.
At June 30, 2022, the Executive Board jointly held 412,167
shares (December 31, 2021: 412,167 shares), of which 372,131 shares
(December 31, 2021: 372,131 shares) were held by Ms. McKinstry and
40,036 shares (December 31, 2021: 40,036 shares) by
Mr. Entricken.
At June 30, 2022, Mrs. A.E. Ziegler, held 1,894 Wolters Kluwer
ADRs (December 31, 2021: 1,894 Wolters Kluwer ADRs). None of the
other members of the Supervisory Board held shares in Wolters
Kluwer (December 31, 2021: none of the other members of the
Supervisory Board held shares).
Note 11 Related
Party Transactions
There were no major related party transactions entered into
during the six months period ended June 30, 2022.
Note 12 Events
after Balance Sheet date
Subsequent events were evaluated up to August 2, 2022, which is
the date the condensed consolidated interim financial statements
were authorized for issue by the Executive Board and Supervisory
Board. No subsequent events were identified.
Appendix
1 Divisional
Supplemental Information – Six months ended June 30
|
(€ million, unless otherwise stated) |
|
|
Change: |
|
2022 |
2021 |
Organic |
Acquisition/ Divestment |
Currency |
Health |
|
|
|
|
|
Revenues |
674 |
579 |
36 |
– |
59 |
Adjusted
operating profit |
216 |
181 |
15 |
– |
20 |
Adjusted operating profit margin |
32.0% |
31.2% |
|
|
|
Tax & Accounting |
|
|
|
|
|
Revenues |
843 |
732 |
65 |
0 |
46 |
Adjusted
operating profit |
270 |
229 |
24 |
0 |
17 |
Adjusted operating profit margin |
32.0% |
31.3% |
|
|
|
Governance, Risk & Compliance |
|
|
|
|
|
Revenues |
638 |
544 |
35 |
6 |
53 |
Adjusted
operating profit |
206 |
175 |
11 |
2 |
18 |
Adjusted operating profit margin |
32.2% |
32.1% |
|
|
|
Legal & Regulatory |
|
|
|
|
|
Revenues |
445 |
425 |
24 |
(12) |
8 |
Adjusted
operating profit |
69 |
53 |
18 |
(4) |
2 |
Adjusted operating profit margin |
15.6% |
12.5% |
|
|
|
Corporate |
|
|
|
|
|
Adjusted operating profit |
(27) |
(25) |
(2) |
– |
0 |
Wolters Kluwer |
|
|
|
|
|
Revenues |
2,600 |
2,280 |
160 |
(6) |
166 |
Adjusted
operating profit |
734 |
613 |
66 |
(2) |
57 |
Adjusted operating profit margin |
28.2% |
26.9% |
|
|
|
Note: Acquisition/divestment column includes the contribution from
2022 and 2021 acquisitions before these became organic (12 months
from their acquisition date), the impact of 2022 and 2021
divestments, and the effect of asset transfers between divisions,
if any. |
Appendix 2
Revenues by Media
Format – Six months ended June 30
|
(€ million, unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Software |
1,136 |
974 |
+17% |
+9% |
+9% |
Other digital |
1,029 |
908 |
+13% |
+6% |
+6% |
Digital |
2,166 |
1,882 |
+15% |
+8% |
+8% |
Services |
264 |
227 |
+16% |
+6% |
+5% |
Print |
170 |
171 |
-1% |
-6% |
-1% |
Total revenues |
2,600 |
2,280 |
+14% |
+7% |
+7% |
∆: %
Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆ OG: %
Organic growth. Other digital includes digital information and
services related to software. Services include legal
representation, consulting, training, events, and other
services. |
Appendix 3
Divisional Revenues
by Type – Six months ended June 30
|
(€ million, unless otherwise stated) |
2022 |
2021 |
∆ |
∆ CC |
∆ OG |
Health |
|
|
|
|
|
Digital and
service subscription |
540 |
462 |
+17% |
+7% |
+7% |
Print
subscription |
23 |
21 |
+10% |
+1% |
+1% |
Other recurring |
48 |
45 |
+7% |
-2% |
-2% |
Total recurring revenues |
611 |
528 |
+16% |
+6% |
+6% |
Print
books |
24 |
16 |
+54% |
+41% |
+41% |
Other non-recurring |
39 |
35 |
+11% |
0% |
0% |
Total Health |
674 |
579 |
+16% |
+6% |
+6% |
Tax & Accounting |
|
|
|
|
|
Digital and
service subscription |
648 |
561 |
+15% |
+9% |
+10% |
Print
subscription |
10 |
11 |
-7% |
-9% |
-9% |
Other recurring |
80 |
78 |
+2% |
-8% |
+7% |
Total recurring revenues |
738 |
650 |
+13% |
+7% |
+9% |
Print
books |
10 |
8 |
+26% |
+15% |
+15% |
Other non-recurring |
95 |
74 |
+29% |
+24% |
+6% |
Total Tax & Accounting |
843 |
732 |
+15% |
+9% |
+9% |
Governance, Risk & Compliance |
|
|
|
|
|
Digital and
service subscription |
378 |
320 |
+18% |
+8% |
+8% |
Total recurring revenues |
378 |
320 |
+18% |
+8% |
+8% |
LS
transactional |
146 |
126 |
+16% |
+5% |
+3% |
FS
transactional |
65 |
57 |
+13% |
+3% |
-2% |
Other non-recurring |
49 |
41 |
+18% |
+13% |
+13% |
Total Governance, Risk & Compliance |
638 |
544 |
+17% |
+7% |
+6% |
Legal & Regulatory |
|
|
|
|
|
Digital and
service subscription |
324 |
294 |
+10% |
+8% |
+9% |
Print
subscription |
43 |
49 |
-12% |
-12% |
-12% |
Other recurring |
7 |
10 |
-26% |
-31% |
+4% |
Total recurring revenues |
374 |
353 |
+6% |
+4% |
+6% |
Print
books |
21 |
31 |
-31% |
-32% |
-7% |
Other non-recurring |
50 |
41 |
+21% |
+18% |
+14% |
Total Legal & Regulatory |
445 |
425 |
+5% |
+3% |
+6% |
Total Wolters Kluwer |
|
|
|
|
|
Digital and
service subscription |
1,890 |
1,637 |
+15% |
+8% |
+8% |
Print
subscription |
76 |
81 |
-5% |
-8% |
-8% |
Other recurring |
135 |
133 |
+1% |
-7% |
+3% |
Total recurring revenues |
2,101 |
1,851 |
+14% |
+6% |
+7% |
Print
books |
55 |
55 |
+1% |
-4% |
+13% |
LS
transactional |
146 |
126 |
+16% |
+5% |
+3% |
FS
transactional |
65 |
57 |
+13% |
+3% |
-2% |
Other non-recurring |
233 |
191 |
+21% |
+16% |
+8% |
Total non-recurring revenues |
499 |
429 |
+16% |
+8% |
+6% |
Total Wolters Kluwer |
2,600 |
2,280 |
+14% |
+7% |
+7% |
∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.18); ∆
OG: % Organic growth. Note: Other non-recurring revenues include
license & implementation fees. |
About Wolters Kluwer
Wolters Kluwer (EURONEXT: WKL) is a global leader in
professional information, software solutions, and services for the
healthcare; tax and accounting; governance, risk and compliance;
and legal and regulatory sectors. We help our customers make
critical decisions every day by providing expert solutions that
combine deep domain knowledge with technology and services.
Wolters Kluwer reported 2021 annual revenues of €4.8 billion.
The group serves customers in over 180 countries, maintains
operations in over 40 countries, and employs approximately 20,000
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 (ADR) program.
The ADRs are traded on the over-the-counter market in the U.S.
(WTKWY).
For more information, visit www.wolterskluwer.com, follow us on
Twitter, Facebook, LinkedIn, and YouTube.
Financial Calendar
August 30, 2022
Ex-dividend date: 2022 interim dividendAugust 31, 2022
Record
date: 2022 interim dividendSeptember 22,
2022 Payment date:
2022 interim dividendSeptember 29, 2022
Payment date: 2022
interim dividend ADRsNovember 2, 2022
Nine-Month 2022 Trading UpdateFebruary 22, 2023
Full-Year 2022 ResultsMarch 8, 2023
Publication of 2022 Annual Report and ESG Data Overview
Media
Investors/Analysts
Gerbert van Genderen
Stort Meg
GeldensGlobal Branding &
Communications Investor
Relationst + 31 (0)172 641 230
t + 31 (0)172 641
407 press@wolterskluwer.com
ir@wolterskluwer.com
Forward-looking Statements and Other Important Legal
Information
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; conditions created by global pandemics,
such as COVID-19; 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.
Elements of this press release contain or may contain inside
information about Wolters Kluwer within the meaning of Article 7(1)
of the Market Abuse Regulation (596/2014/EU).
Trademarks referenced are owned by Wolters Kluwer N.V. and its
subsidiaries and may be registered in various countries.
1 This rule of thumb excludes the impact of exchange rate
movements on intercompany balances, which is accounted for in
adjusted net financing costs in reported currencies and determined
based on period-end spot rates and balances.
2 Adjusted net financing costs include lease interest charges.
Guidance for adjusted net financing costs in constant currencies
excludes the impact of exchange rate movements on currency hedging
and intercompany balances.
3 EHS/ORM = environmental, health and safety and operational
risk management.
4 Belonging measures the extent to which employees believe they
can bring their authentic selves to work and be accepted for who
they are. Belonging and engagement scores are currently measured by
a third party (Microsoft GLINT).
5 Dividend payout ratio: dividend per share divided by adjusted
earnings per share.
6 Net cash available consists of cash and cash equivalents of
€1,098 million less overdrafts used for cash management purposes of
€79 million.
7 ESG = environmental, social and governance.
8 A Netherlands tax software product was transferred from the
Legal & Regulatory division into Europe Professional Tax &
Accounting. Organic growth stated is pro forma for the new
organization.
9 Renamed from Corporate Performance Solutions. As per January
1, 2022, TeamMate (internal audit solution) was transferred from
Corporate Performance into North America Professional Tax &
Accounting while our U.S. Corporate Tax unit was transferred into
Corporate Performance from North America Professional Tax &
Accounting. Organic growth rates stated are pro forma for the new
organization. The HY 2022 organic growth rates under the previous
reporting structure would have been 10% for Corporate Performance
Solutions and 10% for North America Professional Tax &
Accounting.
10 PPP = Paycheck Protection Program, a program of the U.S.
Small Business Association (SBA)
- 2022.08.03 Wolters Kluwer 2022 Half-Year Results
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