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Wolters Kluwer Focuses on the Future; Strategy Update: Maximizing Value for Customers


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Copyright © Hugin AS 2009. All rights reserved.
2009-11-04 08:15:04 -


London, November , 04, 2009
Alphen aan den Rijn (November 4, 2009) - Wolters Kluwer, a
market-leading global information services and publishing company
focused on professionals, today outlined its three-year strategy for
Maximizing Value for Customers. With a focus on the future, the
2010-2012 strategic path builds on the successful transformation of
Wolters Kluwer and leverages the company's global leading market
positions to drive value for customers and shareholders.

Nancy McKinstry, CEO and Chairman of the Executive Board, commented:
"I am confident that our strategy for 2010-2012, Maximizing Value for
Customers, will drive greater value for our customers and
shareholders. We are well positioned for the future based on the
successful transformation of our business. Our strong foundation
includes global leading market positions, a resilient subscription
portfolio, world-class electronic and software capabilities, and a
solid financial position. These strengths enable us to create
information-enabled solutions and networks that help our customers
deliver tangible results. In the context of macro trends that lead to
increased regulation, more compliance complexity, and greater focus
on productivity by customers, Wolters Kluwer has the assets and
expertise to deliver intelligent solutions that reduce complexity and
drive efficiencies for our customers.
"The globalization of our organization, integrated product lines, and
coordinated back office functions reflect the needs of our customers
and is the logical next step in the evolution of Wolters Kluwer. We
will make full use of the value of our global footprint to focus on
innovation to drive better connectivity between our customers and
their clients, and to continue investing in our strong market-leading
positions.

"Our portfolio transformation has enhanced the company's competitive
position. Today, Wolters Kluwer has significant global scale in each
of its key markets. Wolters Kluwer holds the number one position in
the global tax and accounting market and has strong leading positions
in the global legal and regulatory and health markets. These robust
market positions provide a significant foundation for delivering
results by increasing the pace of innovation across geographies and
by leveraging economies of scale in product development and
technology."

Strategy for 2010-2012:  Maximizing Value for Customers

The vision to be The Professional's First Choice remains core to the
company's strategy. The strategy for Maximizing Value for Customers
centers on being the preferred global provider of information-enabled
solutions to enable professionals to manage processes and drive
results effectively. The company will achieve this objective by
delivering against three strategic priorities:

  * Deliver Value at the Point-of-Use by helping customers manage
    complex transactions to produce tangible results. Wolters
    Kluwer's value begins with high quality, proprietary information
    embedded in tools and solutions. This value is extended by
    helping professionals automate processes and manage complex
    decisions and transactions with intelligent solutions and
    networks.

  * Expand Solutions Across Processes, Customers, and Networks by
    following the transaction flow of the professional customers and
    delivering solutions across key activities. Wolters Kluwer will
    move towards providing intelligent solutions and collaborative
    networks to help its customers produce results efficiently by
    connecting them with clients, governments, and other stakeholders
    critical to their work.

  * Raise Innovation and Effectiveness Through Global Footprint by
    aligning Wolters Kluwer businesses and operations along its
    strong global market positions, with the creation of four global
    divisions: Legal & Regulatory, Tax & Accounting, Health & Pharma
    Solutions, and Financial & Compliance Services. This change will
    support innovation and efficiencies by sharing technology
    platforms, global products, and common business models.


Maximizing Value for Customers Builds on the Company's Success as the
Professional's First Choice

Wolters Kluwer has established itself as the Professional's First
Choice for information, software and services which help
professionals improve their decision making and productivity. The
company's 2006-2009 strategic plan to drive profitable growth has
successfully extended value to customers by producing high-quality
solutions that drive productivity by combining proprietary content
with software applications to automate key tasks for the
professional. The company has successfully achieved the goals set out
under its current 2006-2009 strategic plan for profitable growth,
including:

  * Enhanced its portfolio by shifting to higher value added products
    and stronger growth markets
  * Continued investments of 8-10% of revenues in new products and
    platforms to support growth
  * Expanded electronic revenues to more than 50% of the portfolio
  * Extended subscription and other non-cyclical revenues to more
    than 70% of the portfolio
  * Achieved operating efficiencies and improved operating margins
  * Strengthened its solid financial position and improved financial
    flexibility
  * Delivered substantial EPS growth


Springboard Expansion

The Springboard operational excellence program is designed to further
business optimization initiatives resulting in sustainable margin
growth. Savings are expected to result largely from standardized
technology platforms and consolidated IT infrastructure, streamlined
content manufacturing processes, expanded global sourcing programs,
offshore service centers for software development and testing, and
content production and back office support functions.

Execution to date has exceeded expectations giving the company
further confidence in achieving its full-year 2009 ordinary EBITA
margin guidance. As a result, the full program run rate savings
estimates have been increased and the program has been expanded. The
expansion and acceleration of supply management initiatives in Europe
will contribute positively to the program results. Additionally,
further business optimization initiatives in France, the Netherlands,
the United Kingdom, and Law & Business will contribute to additional
savings. Furthermore, annualized run rate savings estimates for the
full program have been increased to €140-160 million by 2011, an
increase over the previous estimate of €120 million. Related
exceptional expenses are expected to increase to approximately
€220-240 million for the full program by 2011.


+-------------------------------------------------------------------+
| Savings and Cost Estimates (€ millions pre | Previous | Increased |
| tax)                                       | Guidance |  Guidance |
|--------------------------------------------+----------+-----------|
| 2011 Run Rate Cost Savings                 |      120 |   140-160 |
|--------------------------------------------+----------+-----------|
| Exceptional Program Costs                  |      180 |   220-240 |
+-------------------------------------------------------------------+


Global Organization

To drive the strategy for Maximizing Value for Customers, Wolters
Kluwer will transition to a global organization. Beginning in 2010,
the organization of the company will be aligned along four global
operating divisions: Legal & Regulatory (CEO Donatella Treu), Tax &
Accounting (CEO Kevin Robert), Health & Pharma Solutions (CEO Bob
Becker), and Financial & Compliance Services (CEO Brian Longe). The
four divisions will report into Nancy McKinstry, CEO and Chairman of
the Executive Board. With the expansion of the Springboard program,
Chris Cartwright, the CEO of the current Corporate & Financial
Services division, will move to a role supporting the successful
execution of this important initiative, reporting to Jack Lynch,
Member of the Executive Board.

As part of this transition to a global and integrated organization,
the company previously announced the creation of Global Shared
Services, headed by Tom Lesica, and a regional management structure
for its Legal, Tax & Regulatory units in Europe.

Guidance 2010-2012

The Wolters Kluwer strategy is focused on maximizing value for
customers and shareholders, reflected in Key Performance Indicators.


+-------------------------------------------------------------------+
| Key Performance Indicators | Medium-Term Guidance 2010-2012       |
|----------------------------+--------------------------------------|
|                            | *   Double-digit growth in online    |
|                            |   and software revenues              |
|                            | *   Online, software & services      |
|                            |   revenue >= 75% of total revenues   |
| Portfolio composition      | *   Subscription and other           |
|                            |   non-cyclical revenue >= 75% of     |
|                            |   total revenues                     |
|                            | *   Print revenue <= 25% of total    |
|                            |   revenues                           |
|----------------------------+--------------------------------------|
|                            | *   Broadly in line with recent      |
|                            |   levels under current economic      |
| Ordinary EBITA margin      |   conditions                         |
|                            | *   Consistent improvement           |
|                            |   thereafter                         |
|----------------------------+--------------------------------------|
| Diluted ordinary earnings  | *   Improvement beyond current       |
| per share                  |   economic conditions in constant    |
|                            |   currencies                         |
|----------------------------+--------------------------------------|
|                            | *   >= €400 million per annum over   |
| Free cash flow             |   the medium term in constant        |
|                            |   currencies                         |
|----------------------------+--------------------------------------|
| Return on invested capital | *   >= 8% over the medium term       |
| (after tax)                |                                      |
+-------------------------------------------------------------------+


Solid Financial Position Underpins Strategy for Maximizing Value for
Customers

The company's solid financial position underpins its 2010-2012
guidance. Management reiterates the net-debt-to-EBITDA target of 2.5
times. Priorities for the uses of free cash flow will include
rewarding our shareholders through a progressive dividend policy,
improving our financial leverage, and investments in the business.
Management reiterates its commitment to invest between 8-10% of
revenues in new products and platforms to drive profitable growth
over the medium term.

Benchmark Figures
Wherever used in this press release, the term "ordinary" refers to
figures adjusted for exceptional items and, where applicable,
amortization of publishing rights and impairment of goodwill and
publishing rights. Exceptional items consist of qualifying
restructuring expenses. "Ordinary" figures are non-IFRS compliant
financial figures, but are internally regarded as key performance
indicators to measure the underlying performance of the base
business. These figures are presented as additional information and
do not replace the information in the income statement and in the
cash flow statement. The term "ordinary" is not a defined term under
International GAAP.

About Wolters Kluwer
Wolters Kluwer is a leading global information services and
publishing company. The company provides products and services for
professionals in the health, tax, accounting, corporate, financial
services, legal, and regulatory sectors. Wolters Kluwer had 2008
annual revenues of €3.4 billion, employs approximately 20,000 people
worldwide, and maintains operations in over 35 countries across
Europe, North America, Asia Pacific, and Latin America. Wolters
Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its
shares are quoted on Euronext Amsterdam (WKL) and are included in the
AEX and Euronext 100 indices. Visit www.wolterskluwer.com for
information about our market positions, customers, brands, and
organization.

Should you wish to change how you receive information from Wolters
Kluwer, please click here.

Forward-looking Statements
This press release contains forward-looking statements. These
statements may be identified by words such as "expect," "should,"
"could," "shall," and similar expressions. Wolters Kluwer cautions
that such forward-looking statements are qualified by certain risks
and uncertainties that could cause actual results and events to
differ materially from what is contemplated by the forward-looking
statements. Factors which could cause actual results to differ from
these forward-looking statements may include, without limitation,
general economic conditions; conditions in the markets in which
Wolters Kluwer is engaged; behavior of customers, suppliers, and
competitors; technological developments; the implementation and
execution of new ICT systems or outsourcing; and legal, tax, and
regulatory rules affecting Wolters Kluwer's businesses, as well as
risks related to mergers, acquisitions, and divestments. In addition,
financial risks such as currency movements, interest rate
fluctuations, liquidity, and credit risks could influence future
results. The foregoing list of factors should not be construed as
exhaustive. Wolters Kluwer disclaims any intention or obligation to
publicly update or revise any forward-looking statements, whether as
a result of new information, future events, or otherwise.

Calendar

2009 Full-Year Results                              February 24, 2010
Publication of 2009 Annual Report                   March 18, 2010
Annual General Meeting of Shareholders,             April 21, 2010
Amsterdam


Full overview available at www.wolterskluwer.com.


Media                                       Investors/Analysts
Caroline Wouters                            Kevin Entricken
Vice President, Corporate                   Vice President, Investor
Communications                              Relations
t + 31 (0)172 641 459                        t + 31 (0)172 641 407
press@wolterskluwer.com                     ir@wolterskluwer.com



Presentations by Senior Management on November 4, 2009 - Hilton Hotel
Amsterdam
Strategy Update: Maximizing Value for Customers
Investor/Analyst Meeting: 10:00 AM CET
Presentation will be webcast on the corporate website
www.wolterskluwer.com

hugin.info/130682/R/1352444/327196.pdf


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