Wolters Kluwer 2024 Nine-Month Trading Update
Wolters Kluwer 2024 Nine-Month Trading Update
Alphen aan den Rijn, October 30, 2024, Wolters Kluwer, a global leader in professional information, software solutions and services, today releases its scheduled 2024 nine-month trading update.
Highlights
Full-year 2024 guidance reiterated.
Nine-month revenues up 6% in constant currencies and up 6% organically.
Recurring revenues (83% of total revenues) up 7% organically; non-recurring revenues up 2%.
Expert solutions revenues (59% of total revenues) grew 8% organically.
Cloud software revenues (18% of total revenues) grew 16% organically.
Nine-month adjusted operating profit up 8% in constant currencies.
Nine-month adjusted operating profit margin increased.
Nine-month adjusted free cash flow up 9% in constant currencies.
Third quarter benefitted from favorable timing of vendor payments.
Net-debt-to-EBITDA ratio 1.8x as of September 30, 2024.
Share buyback 2024: on track to reach €1 billion by year-end.
Share buyback 2025: mandate signed to repurchase up to €100 million in January and February 2025.
Nancy McKinstry, CEO and Chair of the Executive Board, commented: "I am pleased to report 6% organic growth through the first nine months, supported by continued growth in recurring revenues, led by our expert solutions including cloud-based software platforms. Investments in product innovation remained at record levels as we continue to pursue opportunities to support our customers in their drive for improved performance, outcomes, and efficiencies. We are on track to meet our full-year guidance."
Nine Months to September 30, 2024
Total revenues were up 6% in the first nine months of 2024, despite a slightly weaker U.S. dollar in the third quarter. Excluding the effect of currency, acquisitions, and divestments, organic growth was 6% in the first nine months (9M 2023: 5%).
Recurring revenues (83% of total revenues) sustained 7% organic growth (9M 2023: 7%; HY 2024: 7%). Within recurring revenues, cloud software revenues grew 16% organically (9M 2023: 15%). Non-recurring revenues (17% of total revenues) increased 2% organically (9M 2023: 2% decline), benefitting from the improved trend in Legal Services transactional fees in the Financial & Corporate Compliance division compared to last year. Apart from transactional fees, non-recurring revenues include print books, on-premise software licenses, software implementation services, and other non-subscription products and services.
Revenues from North America (64% of total) grew 6% organically (9M 2023: 4%) while revenues from Europe (28% of total) grew 5% (9M 2023: 7%). Asia Pacific & ROW (8% of total) grew 7% organically (9M 2023: 8%).
Nine-month adjusted operating profit increased 8% in constant currencies. The nine-month adjusted operating profit margin improved, mainly driven by our Financial & Corporate Compliance and Legal & Regulatory divisions. Restructuring expenses, which are included in adjusted operating profit, increased. Product development spend (CAPEX + OPEX) was maintained at 11% of revenues (9M 2023: 11% of revenues).
Health: Nine-month revenues increased 6% in constant currencies and 6% organically (9M 2023: 6%). Clinical Solutions recorded 8% organic growth (9M 2023: 7%), led by clinical decision tool UpToDate and our clinical drug databases (Medi-Span and UpToDate Lexidrug). The UpToDate patient engagement solution delivered good growth. Surveillance, compliance, and terminology software saw improved organic growth, mainly reflecting the Invistics drug diversion business acquired in June 2023. Health Learning, Research & Practice recorded 3% organic growth (9M 2023: 4%), with good organic growth in medical research against a challenging comparable alongside improved growth in education and practice. In September 2024, we completed the previously announced divestment of Learner's Digest International (LDI).
Tax & Accounting: Nine-month revenues increased 5% in constant currencies, reflecting the transfer of our Chinese legal research solution (BOLD) from Tax & Accounting to Legal & Regulatory at the start of the year. On an organic basis, revenues grew 7% (9M 2023: 8%). The North American business recorded 7% organic growth (9M 2023: 8%), driven by double-digit organic growth in our cloud-based software suite, CCH Axcess. While outsourced professional services continued to see strong growth, print books and other non-recurring revenues recorded slower growth. Tax & Accounting Europe sustained 7% organic growth (9M 2023: 7%) and began integrating the cloud software business acquired in September from the Isabel Group. Tax & Accounting Asia Pacific & ROW organic revenues were stable.
Financial & Corporate Compliance: Nine-month revenues increased 5% in constant currencies. On an organic basis, revenues rose 5% (9M 2023: 1%), with recurring revenues up 6% organically (9M 2023: 5%) and non-recurring transactional revenues up 3% (9M 2023: 7% decline). Legal Services grew 7% organically (9M 2023: 1%), supported by services subscriptions and 6% growth in Legal Services transactions. Subscriptions to our Beneficial Ownership Information (BOI) platform continued to build, in line with expectations. Financial Services recorded 3% organic growth (9M 2023: 0%), reflecting growth in recurring revenues and a stabilization in transactional revenues.
Legal & Regulatory: Nine-month revenues grew 8% in constant currencies, partly reflecting the transfer of BOLD into the division and bolt-on acquisitions. On an organic basis, revenues grew 5% (9M 2023: 4%). Legal & Regulatory Information Solutions grew 5% organically (9M 2023: 4%), supported by 7% growth in digital information solutions. Legal & Regulatory Software revenues grew 7% organically (9M 2023: 5%), led by double-digit organic growth at Legisway and continued growth in ELM transactional revenues.
Corporate Performance & ESG: Nine-month revenues increased 7% in constant currencies. On an organic basis, revenues increased by 7% (9M 2023: 8%), as recurring cloud software revenues sustained growth of 12%, but non-recurring on-premise license fees and software implementation services declined 2% (9M 2023: 0%). Our EHS & ESG1 unit (Enablon) delivered 14% organic growth (9M 2023: 15%), driven by 21% growth in cloud-based ...
