Netherlands Wolters Kluwer Tender

Wolters Kluwer a global leader in professional information software solutions and services today released its scheduled first-quarter 2019 trading update.The year has started well overall in line with our expectations. We are focused on our 2019-2021 strategic priorities including making investments to scale our expert solutions and to enrich our information products and services to deliver benefits for customers. We have several important initiatives underway to drive operational agility from improving our go-to-market to modernizing our technology infrastructure. I am confident in reaffirming our full-year guidance.First Quarter DevelopmentsFirst quarter revenues increased 9 in reporting currency partly reflecting a favorable 5 impact from currency due to the strength of the U.S. dollar against the euro. Excluding the effect of exchange rate movements revenues increased 4 in constant currencies driven by organic growth of 4. The effect of 2018 disposals in Health on the quarters revenues broadly offset the effect of 2018 acquisitions mainly in Legal Regulatory. Subscriptions and other recurring revenues grew 5 organically. The first-quarter adjusted operating profit margin increased compared to a year ago driven by the Tax Accounting division.Health revenues declined 1 in constant currencies as a result of the divestment of ProVation Medical March 9 2018 and the deconsolidation of Medicom effective April 1 2018. Revenues increased 5 organically driven by solid organic growth in Clinical Solutions despite a challenging comparable and improved organic growth in Health Learning Research Practice. For the full year we continue to expect organic growth to be in line with 2018 and the adjusted operating profit margin to decline year on year due to the absence of last years one-time benefits and due to increased investment in sales marketing.Tax Accounting revenues increased 5 in constant currencies reflecting organic growth of 5. Growth was driven by software solutions for professionals and corporates while content-oriented products and services were weaker compared to a year ago. For the full year we continue to expect organic growth to moderate from 2018 levels and the adjusted operating profit margin to improve on the back of lower restructuring costs and the absence of prior year net one-time charges.Governance Risk Compliance revenues increased 4 in constant currencies reflecting organic growth of 4. Recurring revenues picked up momentum while trends in transactional and other non-recurring revenues were mixed. For the full year we continue to expect recurring revenues to show improved organic growth and transactional revenue trends to moderate. We continue to expect the full year adjusted operating profit margin to improve due to efficiency initiatives.Legal Regulatory revenues increased 7 in constant currencies reflecting the acquisitions of eVision October 30 2018 and Legisway September 28 2018. Organic growth was 3 in the quarter driven by the divisions software solutions including Enablon. For the full year we continue to expect organic growth to be in line with 2018. We expect the adjusted operating profit margin to decline due to an absence of prior year one-time benefits higher investments and the full twelve-month inclusion of eVision.Cash Flow and Net DebtFirst quarter cash conversion declined as expected compared to a year ago due to net working capital outflows the comparable period having benefitted from a working capital inflow due to favorable timing of payments. As a result adjusted free cash flow also declined in the quarter. Cash taxes and financing costs were broadly stable compared to a year ago. Net acquisition spending in the quarter was 1 million. Net disposal proceeds amounted to 13 million in the quarter and were related to the sale of certain Swedish publishing assets in January 2018.Net debt stood at 2191 million on March 31 2019 a modest reduction compared to 2249 million at December 31 2018. Under IFRS 16 year-end net debt is restated to include lease liabilities now recognized as financial debt. Net-debt-to-EBITDA based on rolling twelve months EBITDA was 1.7x. Under IFRS 16 depreciation of right-of-use assets is added back to derive EBITDA.As of March 31 2019 the number of issued ordinary shares outstanding excluding 7.9 million shares held in treasury was 271.8 million.