Wolters Kluwer 2013 Third-Quarter Trading Update

Wolters Kluwer, a global leader in
professional information services, today released its scheduled 2013 third
quarter trading update.

Highlights

  * Full-year 2013 guidance reiterated.
  * Nine-month revenues up +2% at constant currencies and up +1% organically.
      * Electronic and service subscription revenues (56% of revenues) up 5%
        organically.
      * Leading, growing positions (44% of revenues) achieved organic growth of
        6% or higher.
      * North America and Asia Pacific driving growth, offsetting decline in
        Europe.
  * Nine-month ordinary EBITA margin broadly in line with prior period,
    following margin improvement in third quarter.
  * Nine-month ordinary free cash flow increased at constant currencies,
    benefitting from timing.
  * Nine-month acquisition spend, less divestiture proceeds after tax, was
    approx. €120 million.
  * Net-debt-to-EBITDA 2.5x as of September 30, on track for 2.5x or better by
    year-end 2013.
  * Further progress on rebalancing portfolio with recent agreement to divest
    certain publishing assets in the Netherlands.

Nancy McKinstry, CEO and Chairman of the Executive Board, commented:
"Our leading, high growth positions achieved strong organic revenue growth in
the third quarter, supporting the positive organic revenue growth for the group
as a whole. We made further progress on transforming our portfolio through
focused investment in growth and divestitures of non-core assets in Europe.
Early benefits from efficiency programs are helping offset wage inflation,
restructuring costs and the effect of dilutive disposals. We remain confident in
delivering our guidance for the full year."


Third Quarter Developments

Third-quarter revenues from continuing operations increased 4% at constant
currencies and grew 2% on an organic basis. The effect of acquisitions on
revenues was partly offset by divestitures in the third quarter. Total recurring
revenues (76% of total) saw positive organic growth despite expected reductions
in print subscriptions. Corporate Legal Services (CLS) transactional revenue
maintained robust growth, but the rate of decline in Financial Services (FS)
transactions, most notably mortage refinancings, deteriorated in the quarter.
Books and other cyclical revenue streams continued to be negatively affected by
weak demand.

The ordinary EBITA margin improved in the third quarter compared to a year ago
and was broadly in line with the prior year for the nine-month period. Wage
inflation, restructuring costs, organic investment, dilutive disposals and the
effect of a weaker U.S. Dollar were largely balanced by mix shift and cost
savings.

Within the Legal & Regulatory division, Corporate Legal Services (CLS) delivered
strong organic growth in the quarter, supported by new customer onboarding at
TyMetrix (legal spend software) and continued growth in CLS transactional
revenues. CLS transactional revenues grew despite slowing U.S. commercial
lending markets and face a tough comparable in the fourth quarter following a
late year rise in M&A volumes in 2012. In September, CLS acquired CitizenHawk, a
leader in online brand protection. In our other North American Legal &
Regulatory operations, legal education book sales were below expectations as
U.S. law school enrollments saw further decline. Good growth in legal online
solutions, such as RBSource for securities lawyers, partially mitigated this
impact. In Europe, organic revenue trends remain weak in most countries, as
expected, particularly for print products. Our outlook for the full year is
overall unchanged: we expect organic growth in North America to be more than
offset by declines in Europe, with the divisional margin contracting mainly as a
result of wage inflation, disposals and restructuring costs.

In Tax & Accounting, our North American business achieved positive organic
growth, as robust performance in tax software was partially offset by reduced
revenues from bank products and print formats. Despite the still challenging
economic environment, our European Tax & Accounting business also saw positive
organic growth in the quarter, as good growth in tax and accounting software
more than offset ongoing declines in print subscriptions, books, training, and
other cyclical activities. Asia Pacific scored several key clients wins with its
corporate tax compliance module, CCH Integrator, but was impacted by lower book
sales. ProSoft in Brazil, acquired in May 2013, is performing well and in line
with expectations. We continue to expect the division's organic growth and
margin this year to be similar to the prior year.

In Health, Clinical Solutions sustained double-digit organic revenue growth in
the third quarter, driven by strong performances from UpToDate, Pharmacy
OneSource, and Medicom. Health Language, acquired in January, is performing to
plan, delivering double-digit revenue growth. Medical Research revenues were
broadly stable, as growth in online subscriptions were offset by lower print
subscriptions. Professional & Education achieved solid organic growth in the
quarter benefitting from timing of orders and supported by growth in digital
learning solutions, such as PrepU. Health is on track to see good organic growth
and margin improvement for the full year.

Financial & Compliance Services saw organic revenue decline and margin
contraction in the third quarter. Finance, Risk & Compliance organic growth
decelerated in the quarter due to delays in the implementation of banking
regulations. Audit achieved robust organic growth in the quarter, despite an
ongoing product rationalisation program. Originations is facing a market-wide
downcycle in U.S. mortgage refinancing volumes which started in the second
quarter. As a result, FS transaction revenues declined organically by 6% in the
third quarter against double-digit growth in the comparable period last year.
Conditions for our European Transport Services business remain challenging as
anticipated and restructuring is underway. Given current trends, we now expect
the division to see modest decline in organic revenues and margin in the full
year.


Cash Flow, Acquisitions, Divestitures, and Net Debt
Nine-month cash conversion was, as expected, lower than a year ago due to
working capital outflows. Nine-month ordinary free cash flow increased at
constant currencies, due mainly to lower cash taxes as a result of timing. Our
full-year guidance for ordinary free cash flow remains unchanged at >= €475
million on the basis of constant exchange rates.

In the nine months to September 30, acquisition spending less after tax disposal
proceeds amounted to approximately €120 million. On September 30, we completed
the disposal of our French healthcare assets, which were part of the Pharma
divestment program initiated in 2011 and recorded in discontinued operations. In
October, we reached agreement on the divestiture of certain publishing
activities in The Netherlands. Annual revenues of these Dutch activities and
those of the U.S. disposal announced in the first half represent approximately
1% of group continuing revenues in 2012. We continue to expect the impact of
divestitures to be slightly dilutive to earnings in 2013 partially offsetting
earnings enhancing acquisitions.

Twelve month rolling net-debt-to-EBITDA was 2.5x at the end of the third
quarter, improving from 2.6x reported for 30 June 2013. We expect net-debt-to-
EBITDA to be at or better than our target of 2.5x by year-end 2013.


Full-Year 2013 Outlook

Our full year outlook remains unchanged from the guidance set out in February.
The table below provides our outlook for the continuing operations in 2013.
Guidance for ordinary free cash flow and diluted ordinary earnings per share
(EPS) is based on constant exchange rates. Wolters Kluwer generates more than
half of its revenue and ordinary EBITA in North America. As a rule of thumb,
based on our 2012 currency profile, a 1 U.S. cent move in the average EUR/USD
exchange rate for the year causes an opposite 1 euro-cent change in diluted
ordinary EPS. (The average EUR/USD rate during the first nine months of 2013 was
1.32, compared to 1.28 in the first nine months of 2012. The closing rate at
September 30 was 1.35).


 Outlook
-------------------------------------------------------------------------------
 Performance indicators     2013 Guidance
-------------------------------------------------------------------------------
 Ordinary EBITA margin      21.5-22.0%

 Ordinary free cash flow    >= €475 million

 Return on invested capital >= 8%

 Diluted ordinary EPS       Low single-digit growth
-------------------------------------------------------------------------------
 Guidance for ordinary free cash flow and diluted ordinary EPS is in constant
 currencies (EUR/USD 1.29).
 Guidance reflects IFRS 11, IAS 19R and removal of the pension financing credit
 or charge from benchmark figures, and includes the estimated impact of
 performance share issuance offset by share repurchases.



Ordinary net financing results, which exclude the pension financing credit or
charge, are expected to be approximately €130 million in constant currencies,
reflecting the negative carry caused by early refinancing of our bonds due in
2014. The benchmark effective tax rate on ordinary income before tax is expected
to be broadly in line with the benchmark tax rate of 2012 (27.8%).

About Wolters Kluwer
Wolters Kluwer is a global leader in professional information services.
Professionals in the areas of legal, business, tax, accounting, finance, audit,
risk, compliance and healthcare rely on Wolters Kluwer's market leading
information-enabled tools and software solutions to manage their business
efficiently, deliver results to their clients, and succeed in an ever more
dynamic world. Wolters Kluwer reported 2012 annual revenues of €3.6 billion. The
group employs over 19,000 people worldwide and maintains operations in over 40
countries across Europe, North America, Asia Pacific and Latin America. The
company is headquartered in Alphen aan den Rijn, the Netherlands. Wolters Kluwer
shares are listed on NYSE Euronext Amsterdam (WKL) and are included in the AEX
and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American
Depositary Receipt program. The ADRs are traded on the over-the-counter market
in the U.S. (WTKWY).

For more information about our products and organization, visit
www.wolterskluwer.com, follow @Wolters_Kluwer on Twitter, or search for Wolters
Kluwer videos on YouTube.

  Financial Calendar

  February 19, 2014   Full-Year 2013 Results



  Media                      Investors/Analysts

  Caroline Wouters           Meg Geldens

  Corporate Communications   Investor Relations

  t + 31 (0)172 641 459      t + 31 (0)172 641 407

  press@wolterskluwer.com    ir@wolterskluwer.com



Forward-looking Statements
This press release contains forward-looking statements. These statements may be
identified by words such as "expect", "should", "could", "shall" and similar
expressions. Wolters Kluwer cautions that such forward-looking statements are
qualified by certain risks and uncertainties that could cause actual results and
events to differ materially from what is contemplated by the forward-looking
statements. Factors which could cause actual results to differ from these
forward-looking statements may include, without limitation, general economic
conditions; conditions in the markets in which Wolters Kluwer is engaged;
behavior of customers, suppliers, and competitors; technological developments;
the implementation and execution of new ICT systems or outsourcing; and legal,
tax, and regulatory rules affecting Wolters Kluwer's businesses, as well as
risks related to mergers, acquisitions, and divestments. In addition, financial
risks such as currency movements, interest rate fluctuations, liquidity, and
credit risks could influence future results. The foregoing list of factors
should not be construed as exhaustive. Wolters Kluwer disclaims any intention or
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.


PDF version of Press Release: http://hugin.info/130682/R/1740820/584701.pdf

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