Wolters Kluwer CEO Plans Disposals While Expanding in China
Wolters Kluwer NV, Europe’s largest tax and legal publisher, will sell unprofitable businesses and further its expansion into China this year to counter a slowdown in European growth.
The company, which gets 42 percent of its sales from Europe, may also find “operating efficiencies” in areas such as real estate and IT sourcing, Chief Executive Officer Nancy McKinstry said in a phone interview today. Meanwhile, the Alphen aan den Rijn, Netherlands-based publisher is seeking acquisitions in software and digital products.
“We wouldn’t do something really significant in size that transforms the business,” she said. “Over the past 10 years we usually spend between 200 million and 300 million euros a year on acquisitions.”
Wolters Kluwer, which today reported organic revenue growth of 1 percent for 2012, said conditions in Europe will remain tough this year. The company and peers, including the U.K.’s Reed Elsevier Plc, are focusing on growth through online subscriptions, software and digital offerings to counter a slow European market and a drop in traditional print sales.
Still, there are “pockets of growth” in the region, in fields such as tax and accounting, and corporate legal services, McKinstry said. Book lines and products for governments are lagging behind, she said.
“We’re expecting our European business to only perform better over the medium-term in the next couple of years,” McKinstry said. “Customer retention is holding up within the business but the question is how quickly news sales will rebound.”
Earnings before interest, taxes and amortization in 2012 increased to 785 million euros ($1.05 billion) from 728 million euros. Revenue climbed 7.4 percent to 3.6 billion euros, beating analysts’ 3.55 billion-euro average estimate, according to data compiled by Bloomberg.
The company’s shares rose 2.9 percent to 15.60 euros in Amsterdam trading, bringing the advance this year to 0.8 percent and giving Wolters Kluwer a market value of 4.71 billion euros.
Wolters Kluwer, which expanded its business in China by about 17 percent in 2012, is seeking similar growth in the country this year, McKinstry said.
“We’ve been growing nicely in China and we made some small acquisitions there,” she said.
Aside from sales in Europe, the company gets about 54 percent of revenue from the U.S. and about 6 percent from the rest of the world, she said.
The publisher also announced today that Kevin Entricken will become Chief Financial Officer in May, succeeding Boudewijn Beerkens, who has accepted the job of finance chief at SHV, a Dutch family-owned company. Entricken has been CFO of Wolters Kluwer Health for three years.
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