Wolters Kluwer N.V. · EURONEXT:WKL
Wolters Kluwer — H1 2009 Earnings Presentation
35 slides from Wolters Kluwer's earnings presentation, Jul 29, 2009
Slide 1: Resilient Performance: 2009 Half-Year Results
Resilient Performance 2009 Half-Year Results July 29, 2009 - Amsterdam Nancy McKinstry CEO and Chairman of the Executive Board Boudewijn Beerkens CFO and Member of the Executive Board Jack Lynch Member of the Executive Board
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains forward-looking statements. These statements may be identified by words such as "expect", "should", "could", "shall", and similar expressions. Wolters Kluwer cautions that such forward-looking statements are qualified by certain risks and uncerta
Slide 3: Agenda
Agenda Introduction & Highlights Financial Performance Operating Performance & Outlook Q&A 2009 Half-Year Results - Resilient Performance July 29, 2009 – Amsterdam 3
Slide 4: Highlights 2009 Half-Year
Highlights 2009 Half-Year Resilient earnings growth, profit margins, and free cash performance despite weak market conditions Diluted ordinary EPS grew 12% to €0.70 Ordinary EBITA margin improved 70 basis points to 18.6% Free cash flow improved 38% to €146 million Revenue growth of 7% (2% at constan
Slide 5: Accomplishments
Accomplishments Steadfast in the pursuit of our long-term strategy to deliver profitable revenue growth Commitment to invest of 8-10% of revenue in new products Next-generation delivery platforms receive wide acclaim including IntelliConnectTM and OvidSP Electronic revenues grew to 52% of total reve
Slide 6: Innovative Information, Software, and Services
Innovative Information, Software, and Services Continued growth in higher margin electronic products as customers demand efficient work flow solutions – Electronic revenue now comprises 52% of total revenue Electronic Revenue as a % of Total Revenue: Half-Year 2009 €1,720 million 52% 49% 50% 46% 47%
Slide 7: Key Performance Indicators
Key Performance Indicators Good earnings growth, profit margins, and strong free cash performance sets the stage for delivery of full-year guidance Half-Year Half-Year Full-Year Full-Year Actual Actual Guidance Actual 2009 2008 2009 2008 Ordinary EBITA margin 18.6% 17.9% ± 20% 20.1% €134 €105 ± €350
Slide 8: Financial Performance 2009 Half-Year
Financial Performance 2009 Half-Year Results July 29, 2009 - Amsterdam Boudewijn Beerkens CFO and Member of the Executive Board
Slide 9: Half-Year Highlights
Half-Year Highlights Resilient earnings growth, profit margins, and free cash performance despite weak market conditions Ordinary EBITA Margin 1 Diluted ordinary EPS 18.6% € 0.64 +70 bps 17.9% +€0.01 € 0.63 HY 2008 HY 2009 HY 2008 HY 2009 1 2 Free Cash Flow Net Debt/ EBITDA Ratio € millions €134 3.2
Slide 10: Revenue Growth
Revenue Growth Key strategic acquisitions contributed to growth while underlying revenue were impacted by economic conditions and challenges in transactional and cyclical product lines Revenue: Half-Year 2009 €1,720 million Revenue: Six Months Ended June 30 Legal, Tax Health & 21% € millions 2009 20
Slide 11: Consolidated Revenue
Consolidated Revenue CFS transactions Sound performance in underlying 5% subscription and other non-cyclical Books revenues, materially in line with the Advertising 9% 3% prior year Pharma Books showed good growth due to Subscription & promomotion strong advanced ordering for the fall Other Non- 2%
Slide 12: Net Acquisition Contribution
Net Acquisition Contribution Prior year strategic acquisitions have contributed to revenue growth and improved profitability Performance Acquisitions Division Integration in Line with Include Segment Complete Expectations Health UpToDate Clinical data to physicians Accountancy software/ MYOB service
Slide 13: Currency Impact
Currency Impact Movement of EUR/USD exchange rate positively impacted results Components of Growth Revenue by Geography Half-Year 2009: €1,720 million Asia Pacific 5% 3% 7% North North America Europe America 52% Europe 45% 44% 53% 5% 2% Rest of -3% World 3% Organic Net Constant Currency Total Growth
Slide 14: Ordinary EBITA
Ordinary EBITA Improvement driven by performance of higher margin, online and software products, the contribution of prior year acquisitions and operational excellence programs, including project Springboard Ordinary EBITA: Half-Year 2009 €320 million Ordinary EBITA %: Six Months Ended June 30 2009
Slide 15: Statement of Profit & Loss
Statement of Profit & Loss Half Year (€ millions) 2009 2008 ∆% ∆% CC1 Revenue 1,720 1,608 7% 2% Ordinary EBITA 320 288 11% 4% Ordinary EBITA Margin (%) 18.6% 17.9% Exceptional items (28) 0 Amortization (91) (56) 62% 47% Financing Results (57) (49) 19% 27% Taxation on income (11) (39) (71%) (68%) Net
Slide 16: Reconciliation Ordinary Net Income/ EPS
Reconciliation Ordinary Net Income/ EPS Half year (€ millions) 2009 2008 Net Income 133 144 Non-controlling interests (1) 0 Net Income to Owners of the Company 132 144 Amortization of Intangibles 91 56 Taxation on Amortization (30) (21) Results on Disposals (after taxation) (8) (1) Exceptional Items
Slide 17: Consolidated Balance Sheet
Consolidated Balance Sheet € millions June 2009 December 2008 Non-Current Assets 4,800 4,873 Operating Working Capital (615) (640) Non-Operating Working Capital (396) (459) Working Capital (1,011) (1,099) Capital Employed 3,789 3,774 Equity 1,458 1,447 Long-Term Debt 1,894 1,914 Non-Current Liabilit
Slide 18: Free Cash Flow
Free Cash Flow Half Year (€ millions) 2009 2008 ∆% ∆% CC1 Ordinary EBITA 320 288 11% 4% Depreciation 45 38 Aut. Movements in Working Capital (21) (61) Financing Charges (112) (67) Paid Corporate Income Tax (21) (29) Appropriation of Provisions (27) (8) Other 12 13 Cash Flow from Operating Activities
Slide 19: Investment Levels in Line with Targets
Investment Levels in Line with Targets The company continues to invest in new products and platforms to support future growth Investments as a % of Investment Initiatives Revenues Pfx.net: next-generation tax 8-10% software platform 9% 8% IntelliConnect: global online platform 4-6% 5% OvidSP: global
Slide 20: Springboard
Springboard Operational excellence/ cost savings program on track MGTP Current Results — Program on track and in-line with management expectations Content — Total cost savings increased by €20 million to €36 million in Re-engineering the first half of 2009 (2008 full-year savings: €16 million) — Exc
Slide 21: Solid Financial Position
Solid Financial Position Net Debt/ EBITDA Free Cash Flow (€ million) 3.2 3.1 2.9 399 405 395 2.6 2.4 ±350 311 2005 2006 2007 2008 2009 HY 2005 2006 2007 2008 2009 2009 Guidance at constant currencies EUR/ USD 1.47 Guidance Autonomous movement in Debt Maturity Profile (€ million) Working Capital (€ m
Slide 22: Operating Performance 2009 Half-Year
Operating Performance 2009 Half-Year Results July 29, 2009 - Amsterdam Nancy McKinstry CEO and Chairman of the Executive Board
Slide 23: Health Highlights
Health Highlights Significant progress in the division’s performance was achieved in the first-half Clinical Books showed good growth due to strong advanced ordering for the Solutions Pharma fall semester selling season 18% Solutions 27% Medical Research posted strong growth driven by renewal sales
Slide 24: Health Revenue
Health Revenue Stable subscription and other non-cyclical Revenues: Six months ended June 30th results driven by good renewal rates, offset by (€ millions) 2009 2008 ∆ ∆ CC ∆ OG weaker new product sales Subscription & other Book products restored to growth with stronger non-cyclical 233 183 27% 16%
Slide 25: CFS Highlights
CFS Highlights The division leveraged its brands, strong customer loyalty, and market positions to increase its market share penetration by offering leading full service compliance solutions to its customers Corporate & Legal Services results were impacted by lower Financial corporate formation and
Slide 26: CFS Revenue
CFS Revenue Stable subscription and other non-cyclical Revenues: Six months ended June 30th revenue driven by performance of (€ millions) 2009 2008 ∆ ∆ CC ∆ OG representation, banking, securities and Subscription & other insurance products non-cyclical 160 140 15% 0% 0% Corporate & Legal Services un
Slide 27: TAL Highlights
TAL Highlights The division continued to strengthen its core leadership position by increasing penetration of its next-generation platforms for information and software including the launch of IntelliConnectTM Tax and Accounting: Good subscription growth in the U.S. and Law & Canada offset by weaker
Slide 28: TAL Revenue
TAL Revenue Subscription revenues were in line with prior Revenues: Six months ended June 30th year while other non-cyclical revenues, which (€ millions) 2009 2008 ∆ ∆ CC ∆ OG includes bank product transactions and tax Subscription & other form click product lines, were below prior year non-cyclical
Slide 29: LTRE Highlights
LTRE Highlights Revenue results were impacted by cyclical declines in advertising, training and consulting as well as weaker new sales across the Scandinavia business due to economic conditions 3% Belgium 9% France Online and software sales continued to perform well as customers 16% migrated from pr
Slide 30: LTRE Revenue
LTRE Revenue Subscription revenues in line with the prior Revenues: Six months ended June 30th year, stable retention sales while other non- (€ millions) 2009 2008 ∆ ∆ CC ∆ OG cyclical products were weaker due to Subscription & other recessionary market conditions non-cyclical 490 484 1% 3% (2%) Boo
Slide 31: 2009 Full-Year Outlook
2009 Full-Year Outlook 2009 Half-Year Results July 29, 2009 - Amsterdam Nancy McKinstry CEO and Chairman of the Executive Board
Slide 32: 2009 Outlook
2009 Outlook Key Performance Indicators 2009 Guidance Ordinary EBITA Margin Broadly In-line with 2008 Free Cash Flow1 ± €350 million Return on Invested Capital (after tax) ≥ 8% Diluted ordinary EPS1 €1.41 to €1.46 ¹ At constant currencies (EUR/USD = 1.47) 2009 Half-Year Results - Resilient Performan
Slide 33: Outlook
Outlook Realistic Expectations Confident Outlook Weak market conditions are Resilient first-half sets the stage expected to continue for continued success Customers will continue to Subscription portfolio provides stability carefully evaluate incremental spending for new products Recent acquisitions
Slide 34: Summary
Summary Diversified and resilient portfolio Good progress against strategic goals Growing online and software solutions portfolio Continued investment to ensure long-term success Solid profitability and cash flow Strong financial position Well positioned for the future 2009 Half-Year Results - Resil
Slide 35: Q&A
Q&A July 29, 2009 - Amsterdam Nancy McKinstry CEO and Chairman of the Executive Board Boudewijn Beerkens CFO and Member of the Executive Board Jack Lynch Member of the Executive Board