Wolters Kluwer, a leader in professional information services, affirms its full-year 2014 guidance and reports first-quarter revenues up +2% in constant currencies and up +2% organically. Leading, high growth businesses continue to drive performance with digital subscriptions produced good organic growth; while transactional cyclical revenues declined.
Nancy McKinstry, CEO and Chairman of the Executive Board, commented: “Our leading, high growth businesses and digital products again drove positive organic revenue performance in the first quarter, more than compensating for expected decline in print formats and certain transactional and cyclical revenue streams. We sustained organic investment in new products and geographic expansion, and, as announced previously, stepped up restructuring in order to drive further efficiencies, particularly in Europe. The acquisition of Datacert last month will help further transform our portfolio. We remain confident of achieving the guidance we set out at the start of this year.”
First-quarter revenues declined 1% overall due to the strength of the Euro against the U.S. Dollar and other currencies. In constant currencies, revenues rose +2%, driven mainly by organic growth which benefitted from a favorable comparison to the prior year (first quarter 2013: -1%). The effect of 2013 acquisitions (mainly Prosoft in Tax & Accounting) was broadly offset by the impact of last year’s divestitures (mainly in Legal & Regulatory). Recurring revenues saw good organic growth in the quarter, despite further decline in print subscriptions. Books, transactional and other non-recurring revenues declined. The first-quarter adjusted operating margin declined compared to a year ago, due to increased restructuring costs, lower transactional revenues as well as the effect of last year’s disposals and currency.
Financial & Compliance Services first quarter revenues were lower on organic basis due to declines in our Originations and Transport units. Finance, Risk & Compliance saw positive organic growth driven by strong performance from FRSGlobal and FinArch products. In Audit, TeamMate internal audit software had a strong start to the year which more than compensated for the expected revenue attrition from the rationalisation of the Axentis platform. We expect full year results to be back-end loaded, supported by positive organic growth in our Finance, Risk & Compliance and Audit units. First half performance is expected to be impacted by lower mortgage refinancing volumes.
Cash conversion was broadly stable compared to a year ago. Adjusted free cash flow declined in constant currencies, as expected, due mainly to higher paid financing costs resulting from double coupon payments due to the maturing Eurobond in January 2014. We continue to expect at least EUR475 million adjusted free cash flow at constant currencies for the full year. Twelve months rolling net-debt-to-EBITDA was 2.2 at the end of the first quarter, stable compared to 2.2 reported for year-end 2013, and better than our target of 2.5.
Source: Wolters Kluwer Press Release