Wolters Kluwer (WKL) H2 2024 earnings summary

Executive summary

• Achieved 6% organic revenue growth and improved adjusted operating profit margin for 2024, with diluted adjusted EPS up 11% in constant currencies and adjusted free cash flow up 9%.

• Recurring revenues grew 7% organically, with cloud software revenues up 16% organically; cloud software surpassed on-premise for the first time.

• Adjusted free cash flow reached €1.276 billion, up 9%; net debt to EBITDA at 1.6x; ROIC improved to 18.1%.

• Significant shareholder returns: increased dividends and €1 billion share buyback; proposed 12% increase in total 2024 dividend per share to €2.33.

• CEO Nancy McKinstry to retire in early 2026, with Stacey Caywood nominated as successor.

Financial highlights

• Full-year revenues reached €5.916 billion, up 6% in constant currencies; adjusted operating profit was €1.6 billion, up 8%.

• Adjusted operating margin rose 70 bps to 27.1%, including a €27 million one-time non-cash pension gain.

• Adjusted net profit was €1.185 billion, up 7%; diluted adjusted EPS €4.97, up 11%.

• Adjusted free cash flow €1.276 billion, up 9%; cash conversion at 102%.

• Return on invested capital increased to 18.1%.

Outlook and guidance

• 2025 organic revenue growth expected in line with 2024 (6%), with margin improvement and mid-single-digit EPS growth.

• Adjusted operating profit margin guidance: 27.1%-27.5%; adjusted free cash flow €1,250-1,300 million; cash conversion returning to 95–100%.

• ROIC expected at 18–19%; restructuring costs to decrease to €5-15 million.

• By division: Tax & Accounting and Legal & Regulatory to match prior year growth; Health and Financial & Corporate Compliance to be slightly below; Corporate Performance & ESG to exceed prior year.

• Guidance assumes no major changes in scope; RASI acquisition expected to have immaterial near-term earnings impact.