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.

• Adjusted operating profit margin increased by 40 basis points to 26.5%, with profit up 8%.

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

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

• Strategic focus on cloud transition, GenAI integration, and sustainability advanced.

Financial highlights

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

• Adjusted operating profit was €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 increased to €2,932 million, with net debt to EBITDA at 1.6x.

• Interim dividend set at €0.83 per share; €603 million of €1 billion share buyback completed by July 30.

Outlook and guidance

• 2024 guidance unchanged: adjusted operating profit margin 26.4%-26.8%, adjusted free cash flow €1,150-1,200 million, ROIC 17%-18%, mid- to high single-digit EPS growth.

• Division-level guidance: Health margin stable due to write-offs; Tax & Accounting margin to decline slightly; FCC growth to exceed prior year; Legal & Regulatory and Corporate Performance & ESG in line or above prior year.

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

• Margin improvement to be driven by Financial & Corporate Compliance, Legal & Regulatory, and Corporate Performance & ESG.