Wolters Kluwer (WKL) H1 2024 earnings summary

Executive summary

• Organic revenue grew 6% in H1 2024, with all divisions contributing and recurring revenues at 82% of total, growing 7% organically.

• Adjusted operating profit margin improved by 40 basis points to 26.5%, with profit up 8% to €765 million.

• Diluted adjusted EPS rose 11% in constant currencies to €2.36.

• ROIC increased to 17.5%; net debt to EBITDA at 1.6x.

• Strategic progress included GenAI integration, cloud transition, and a €325 million European acquisition.

Financial highlights

• Revenues were €2,891 million, up 6% in constant currencies and organically year-over-year.

• Adjusted operating profit reached €765 million, up 8% in constant currencies.

• Adjusted free cash flow declined 10% to €445 million, mainly due to timing of vendor payments.

• Net debt to EBITDA was 1.6x, with net debt at €2.9 billion.

• Interim dividend set at €0.83 per share; €603 million spent on share buybacks by July 30, 2024.

Outlook and guidance

• Full-year margin guidance reiterated at 26.4%-26.8%; adjusted free cash flow expected between €1.15 and €1.2 billion.

• ROIC expected to improve to 17%-18%; mid to high single-digit growth in diluted adjusted EPS anticipated.

• Division-level guidance: Health and Legal & Regulatory to match prior year growth, Tax & Accounting slightly lower, FCC and CP&ESG in line or higher.

• Full-year cash conversion ratio expected around 95%; capital expenditure at upper end of 5%-6% of revenues.

• Margin improvement to be driven by FCC, Legal & Regulatory, and CP&ESG.