Wolters Kluwer (WKL) Q3 2024 TU earnings summary

Executive summary

• Nine-month revenues up 6% in constant currencies and organically, with recurring revenues (83% of total) up 7% organically and cloud software revenues up 16% organically.

• Adjusted operating profit rose 8% in constant currencies, with margin improvement driven by Financial & Corporate Compliance and Legal & Regulatory divisions.

• Share buyback program on track to reach €1 billion in 2024; €853 million repurchased year-to-date, with a new €100 million mandate for early 2025.

• Full-year 2024 guidance reiterated, expecting sustained organic growth and higher adjusted operating profit margin.

Financial highlights

• Recurring revenues grew 7% organically; non-recurring revenues increased 2% organically, reversing a prior decline.

• Adjusted free cash flow up 9% in constant currencies; adjusted operating cash flow up 7%.

• Net debt at €3,356 million as of September 30, 2024, with net-debt-to-EBITDA at 1.8x (up from 1.5x at year-end 2023).

• Share repurchases totaled €762 million in the first nine months; €491 million in dividends paid.

Outlook and guidance

• Full-year 2024 adjusted operating profit margin expected at 26.4%-26.8%; adjusted free cash flow €1,150–€1,200 million.

• Diluted adjusted EPS growth projected mid- to high single-digit; ROIC expected at 17%-18%.

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

• Restructuring expenses for 2024 expected at €20–€25 million; benchmark tax rate 23.0%-24.0%.