AMSTERDAM, The Netherlands, March 8, 2004 (PRIMEZONE) -- Note to the Editor: All financial information contained in this press release, unless otherwise indicated, is presented in accordance with new Dutch GAAP principles, which became mandatory as of January 1, 2003. We will refer to these as new accounting principles (NAP). It is important to note that this is the first time Wolters Kluwer (Euronext Amsterdam: WKL) is reporting in New Accounting Principles (NAP) and that all previous press releases and financial communications have been in old accounting principles (OAP), including the preliminary results press release on February 5, 2004 in which the 2003 results were first reported. Therefore, we have taken care to present our results under both old and new accounting principles to allow for comparisons from previously released information -- see annexes.
Performance in line with expectations as business stabilizes and improves.
Highlights for 2003 include:*
* New three-year strategy to invest in growth around leading market positions, restructure the cost base, and reorganize to deliver growth, is firmly in place
* Strong revenue growth in Canada, Italy, CEE and Spain, Tax Compliance, Teleroute, and Health's Professional & Education unit
* Cost savings of Euro 79 million achieved; one-third structural, including an organic reduction of 521 FTEs
* Senior management team strengthened with new appointments in all divisions
* Ordinary net income of Euro 349 million declined 8% in constant currencies (OAP Euro 343 million; declined 12% in constant currencies compared with 26% decline in half year 2003)
* Revenues Euro 3,436 million (OAP Euro 3,352 million); ordinary EBITA Euro 610 million (OAP Euro 601 million) before exceptional items; ordinary EBITA margin 18%
* Net debt reduced 29% from Euro 2.7 billion to Euro 1.9 billion, largely due to successful bond buy back of Euro 1.1 billion and new bond issue of Euro 700 million
* Ordinary EPS Euro 1.18 (OAP EPS Euro 1.16)
* Dividend maintained at Euro 0.55 for 2003
Commenting on the company's results, Nancy McKinstry, Chairman of the Executive Board of Wolters Kluwer, said: "The implementation of our new strategy set out at the end of October is well underway, and we are encouraged by the improved results in the 4th quarter. We are reiterating the outlook we provided on October 30th and the foundation we have put in place provides me confidence in the long-term future of Wolters Kluwer."
All values in Euro
In millions (except as otherwise indicated)
2003 2002 % Change % Change
Constant Currencies
Revenues 3,436 3,969 (13) (4)
Ordinary EBITA 610 763 (20) (10)
Ordinary EBITA
margin (%) 18 19
EBITA 514 763
EBITA
margin (%) 15 19
Ordinary
Net Income 349 442 (21) (8)
Ordinary
EPS (fully diluted) 1.18 1.50
Dividend 0.55 0.55
Free Cash Flow 393 400
Free Cash Flow
per share
(fully diluted) 1.32 1.36
Average Number of FTEs 19,540 20,284
Comparable GAAP Measures
all values in Euro
Million
2003 2002
Operating Income
114 669
Operating Income margin (%)
3 17
Net Income (69) 382
EPS (0.24) 1.34
EPS (fully diluted) (0.24) 1.30
*Note: "Ordinary" refers to figures adjusted for exceptional items and where applicable amortization of intangible assets. "Ordinary" figures are non-GAAP compliant financial figures, but are internally regarded as key financial measures. Unless otherwise specifically stated in this Press Release, all financial information is presented in accordance with Dutch GAAP principles (NAP), which became mandatory as of January 1, 2003. To facilitate comparisons with information previously disclosed, figures in old accounting principles (OAP) are given in the annexes. 2002 figures have been restated for changes reflecting some of the non-core businesses moving to divisions. 2003 was a year of change for Wolters Kluwer. The new strategy, announced in October, detailed a three-year plan to invest in growth around leading market positions, to reduce costs through structural improvements, and to reorganize the business to deliver growth. This strategy is firmly in place and tracking according to our expectations. In the 4th quarter of 2003, Wolters Kluwer began to see its business stabilize and improve, particularly in North America.
Ordinary net income for 2003 was down 8% in constant currencies (OAP down 12% in constant currencies) in line with our previously given outlook. Ordinary EBITA margin of 18% was slightly higher than expectations and was driven by improved revenue performance in the 4th quarter in North America and by additional cost efficiencies in all divisions. Cost reductions achieved from the specific savings programs and restructuring initiatives in place in 2003 were Euro 79 million, compared to expectations of Euro 70 million. Approximately one-third of these savings are structural. The remaining cost savings came from one-time reductions in bonuses, travel, profit sharing, and other personnel expenses.
Organic revenues declined by 2%, reflecting challenging economic conditions, underperformance at some operating units, and the lack of major new legislation. Despite these factors, Wolters Kluwer experienced strong growth in Canada, Italy, Central Europe, Scandinavia, Spain, Teleroute, Tax Compliance, and the Professional & Education unit of the Health division.
Nancy McKinstry, who assumed the position of Chairman in September 2003, added: "Our goal for 2004 is to restore top line growth while continuing our work to establish an appropriate cost base for Wolters Kluwer."
2003 Financial Overview Revenues in 2003 decreased to Euro 3,436 million (-4% at constant currencies). Organic revenue growth declined by -2%. Ordinary EBITA decreased to Euro 610 million (-10% at constant currencies). Ordinary net income was Euro 349 million (-8% at constant currencies). "Fully diluted" ordinary EPS, based on the weighted average number of shares, was Euro 1.18 (2002: Euro 1.50).
Operating income decreased to Euro 114 million, net income decreased to Euro -69 million in 2003, and fully diluted EPS was Euro -0.24.
In 2003, Wolters Kluwer had a modest acquisition program designed to complement our portfolio and strengthen leading market positions. Annualized revenue contribution from these acquisitions amounted to Euro 59 million. Two major acquisitions were CEDAM, a leading Italian legal publisher, and TyMetrix, a provider of legal e-billing services in the U.S.
The sale of non-core businesses continued in 2003, including the divestment of ISBW of the Netherlands, the public law assets of Kluwer Law International, and the education assets of Aspen Publishers.
Free cash flow remained strong at Euro 393 million (2002: Euro 400 million). Net debt decreased 29% from Euro 2.7 billion in 2002 to Euro 1.9 billion, as a result of significant restructuring of our balance sheet.
For 2003, Wolters Kluwer maintained its dividend at Euro 0.55 per share. As in previous years, shareholders may choose between a cash or stock dividend.
To view the full press release with all financial tables visit the following link: http://hugin.info/130682/R/937186/129875.pdf