Wolters Kluwer N.V. (WKL) Earnings Call Transcript & Summary

Ladies and gentlemen, I would like to welcome you to the Annual General Meeting of Wolters Kluwer. Over the past 2 years, we have learned to cope with and adapt to the coronavirus. It has been our top priority to protect the health and safety of our employees and customers as well as that of our shareholders, you, and other stakeholders participating in this event. That is why shareholders are accommodated today to either attend in person or to attend and participate in the meeting remotely through electronic means without the need to physically attend the meeting. While we can meet here today, it is now nearly 2 months ago when the invasion in Ukraine started. With growing horror and disbelief, we are all watching this. Wolters Kluwer stands with Ukraine and the international community in condemning this unjustifiable aggression, which has created a humanitarian crisis in the heart of Europe. Nancy will address in her speech what actions have been and are being taken by Wolters Kluwer in this respect. This will be my last meeting as Chair of the Supervisory Board of Wolters Kluwer. And at the end of this meeting, I will pass on my duties to Ann Ziegler -- Ann, over here -- as Chair. I'm thankful and pleased that it is possible for us to organize today's meeting in this hybrid format with all the members of the Supervisory Board and Executive Board physically present because that was not the case over the last 2 years. I was sitting here on my own with the notary and the secretary in Alphen and with a lot of technicians. Our auditor, Mr. Bas Savert of Deloitte, and our company notary, Ms. Leemrijse, over there, of law firm, Allen & Overy, are joining us as usual here today as well. In this hybrid meeting, shareholders are able to participate in person here in our head office in Alphen as well as remotely by asking questions through a dedicated shareholders' audio connection and voting during the meeting through the e-voting platform. I will explain that in more detail later. This hybrid meeting is also being broadcasted live via video webcast. We appreciate that many shareholders took the opportunity to exercise their voting rights by way of electronic or written proxy, and a number of shareholders have submitted questions related to the agenda in advance, which we will all discuss. Shareholders participating remotely who wish to ask a question in relation to the items on the agenda can do so via the audio connection accessible via the ABN AMRO e-voting platform. Remote participants will find a phone number displayed on the e-voting platform and the conference ID. [Operator Instructions] We will conduct the meeting in English, as you have been noticing over the last few minutes, for which we kindly ask your understanding. We also kindly request shareholders who ask questions in the room or via the audio connection do so in the English language. A live translation into Dutch will, this time, not be offered. We have complied with all statutory provisions and the provisions of our Articles of Association for convening this meeting by posting the meeting notice on our website on March 9 and announcing it by a press release. The agenda with explanatory notes, including the 2021 annual report, was published in a timely manner and has been deposited for inspection by shareholders, you, in the prescribed manner. Shareholders who are registered in the company's shareholder register have been notified by letter to attend this meeting. Because these requirements of the Articles of Association have been observed, resolutions can be validly adopted at this meeting. As soon as the exact number of shares present or representative is known, I will inform you. I don't have those data as yet. Right. We -- the meeting is being webcasted, and a recording will be made to correctly produce a short report of this meeting. [Operator Instructions] Right. Let us now turn to the meeting agenda. I would like to discuss, as usual, agenda items 2a, b, c and 3a together and to introduce the items 2a, b and 3a, not 2c. I would now like to give the floor to Ms. McKinstry, CEO and Chair of the Executive Board. Nancy?

Thank you very much, Frans, and welcome all of you to the Annual General Meeting of Shareholders. Before I start my presentation, I'd like to echo Frans' comment on the war in the Ukraine. We have followed the situation with much distress and disbelief as I'm sure you all have as well. After careful consideration, we have discontinued our business in Russia and Belarus, except for certain health products where there are compelling humanitarian reasons. In Ukraine, where we have a small number of employees and contractors, we have been focusing on supporting them in the best way that we can while also taking steps to ensure business continuity for our customers. Wolters Kluwer's teams in the region, in Europe and elsewhere around the world are offering a wide range of support, including financial assistance, housing, clothing, equipment, workspace and more. Our Health division is providing ongoing customer access to UpToDate for healthcare providers in the region and is participating in Research4Life to provide access to our journal content to Ukrainian medical institutions. Our Legal & Regulatory division is making legal research resources available to lawyers who are helping Ukrainian refugees. We've also made substantial donations to aid organizations that are supporting refugees and others impacted by the war, including the Red Cross. Our financial exposure to Russia, Belarus and Ukraine is very small. These countries together represent less than 1% of Wolters Kluwer's total revenues. And at this point in time, we have not seen an impact on our other European operations. But clearly, we are monitoring developments day to day. Now I'd like to turn to the agenda for today and provide you with a brief summary of our achievements for 2021, covering both financial and nonfinancial performance. I would then like to give you a summary of our strategy and finish with a recap of the outlook for 2022. Despite a second year of managing the challenges presented by the global pandemic, our teams around the world produced strong results in 2021, delivering on important strategic, financial and ESG goals. In terms of our financial performance, we delivered 6% organic growth and a significant increase in adjusted operating profit margin to reach 25.3%. This operating result, along with a lower tax rate and a reduced share count, drove 17% growth in diluted adjusted EPS in constant currencies. Adjusted free cash flow reached a new milestone at just over EUR 1 billion, a 15% increase in constant currencies, better than we had expected. The balance sheet remains very strong, with a leverage ratio of 1.4x at year-end. And the results led to a marked improvement in our return on invested capital. This financial performance allowed us to continue to deliver significant returns to investors. We returned over 70% of our adjusted free cash flow to shareholders last year in the form of dividends and share buybacks. Our expert solutions grew 6% organically. And today, they account for 55% of total revenues. We maintained our employee engagement score above the high-performing norm, and we completed our first-ever employee diversity, equity and inclusion survey. We also advanced in other important ESG areas, including cybersecurity and various programs that help reduce our carbon emissions. Let's put our 2021 financial performance in perspective. The recovery in organic growth from 2% in 2020 to 6% in 2021 was driven partly by the uplift in nonrecurring revenue streams, but importantly, also by accelerated momentum in recurring revenue streams, which make up 80% of the total revenues for Wolters Kluwer. This improvement in organic growth, alongside lower restructuring costs, a few positive onetime items and continued low level of spending on activities, such as travel and in-person events, helped drive -- helped to drive a further increase in our adjusted operating profit margin. We delivered a double-digit increase in diluted adjusted EPS in constant currencies and made further progress in increasing our return on invested capital, both partly reflecting a lower tax rate last year. As I mentioned, we reached a new milestone in adjusted free cash flow, exceeding EUR 1 billion. These strong financial results were delivered alongside advancements on several ESG fronts. This slide provides just a selection of the many nonfinancial measures that we monitor at Wolters Kluwer. I'd like to highlight just a few. Innovation is critical to customer satisfaction and organic growth of our business. As you can see in the top left chart, we sustained product development spends at high levels even throughout the last 2 years of uncertainty. We have also been making steady investments in security, and we conduct regular employee training in this area, all of which helped us increase and advance our cyber maturity score last year. As you can see in the top right chart, we have a strong track record of gender diversity at Wolters Kluwer, especially at leadership levels. With the appointment of Heleen Kersten, the Supervisory Board will be 57% female. This appointment, of course, is subject to your approval today. Now let's turn to our proposed dividend distribution and our share buyback plans for 2022. I mentioned we ended the year with a strong balance sheet, with a leverage ratio of 1.4x. This places the group in a very solid position to continue investing organically in the business, making select acquisitions while rewarding our shareholders with cash returns. With this in mind, we are recommending a 15% increase in the total dividend per share to EUR 1.57. This will bring the final dividend to EUR 1.03 per share to be paid out in May. The dividend proposal is, of course, subject to your approval today. Last year, we repurchased a total of EUR 410 million in shares, which included EUR 60 million of net proceeds related to the divestment of our U.S. legal education business. For this year, 2022, as we announced in February, we are planning to repurchase up to EUR 600 million in shares, including repurchases to offset share issuance. We are making good progress on this buyback. So far this year, we have already completed about 1/3 of this buyback program. In addition to cash returns, shareholders have seen a significant increase in the value of Wolters Kluwer's holdings over the last few years. And while this year has seen a difficult and volatile start, as of today, Wolters Kluwer has relatively outperformed the AEX and other key indices. This chart shows in blue, Wolters Kluwer's share price since 2018 compared to the AEX in orange, the Euro Stock Index in black and the MSCI Europe services sector in red. Wolters Kluwer's shares ended up the year 50%, significantly ahead of the indices that you see on this slide. Over the 3-year period ending December 31, 2021, Wolters Kluwer's shares increased 101% in value, more than double the performance of the Euro Stock Index and well ahead of the Amsterdam AEX and the MSCI Europe sector peers. So now let me turn to an update on our strategy. As many of you know, every 3 years, we update our strategy and develop a new plan that considers market trends, competitive developments, technological changes and other opportunities and challenges. Looking back over the last 3 years, our strategy of focusing on expert solutions, deploying advanced technologies and driving agility has served us well. So as a result, our new plan is really a refinement and reinforcement of our prior strategy. Our first priority remains to accelerate the development of expert solutions. We intend to drive further investment here, especially in cloud-based solutions. At the same time, we plan to continue to invest in select digital information products in order to transform them into expert solutions. Our second priority is to expand our reach. Here, we are seeking to extend our business into high-growth adjacencies around our customers' workflows and to adapt some of our existing products for new customer segments. We will also look to further develop partnerships and ecosystems for our key software platforms. And finally, our third priority is to evolve our core capabilities. We intend to strengthen certain centralized functions to drive excellence and scale economies. We also plan to advance our performance and capabilities around ESG, with a continued high priority given to attracting and retaining a diverse and engaged workforce. Expert solutions make up 55% of our total revenues, and many of these expert solutions are software products. Today, nearly all of our software products are available as a cloud-based solution. In the past few years, we've seen a strong shift to the cloud among our customers, and we expect that this will continue as -- even as the pandemic ends. To capture this opportunity, we intend to drive significant investment in growing these solutions. Over the past 3 years, our revenues from cloud-based solutions have nearly doubled, driven by organic growth and selected acquisitions. While all software grew at 6% in 2021, our cloud-based revenues grew 17% organically. In 2021, cloud software accounted for almost 1/3 of our total software revenues and about 14% of our group revenues. I mentioned that our strategy also aims to advance our ESG performance and capabilities, and I'd like to just touch on 2 areas. We focus a lot of attention on our people who create, sell and support our software and our solutions. Their well-being and engagement are our top priority. So we are pleased that despite the impact the pandemic has had on all of our lives, we were able to hold our employee engagement scores above the high-performing norm last year. This is a high standard that puts Wolters Kluwer amongst the leading companies on employee engagement. We know that employee engagement is a key driver of employee performance and, ultimately, of business results. We also know that more diverse workforces with a strong sense of belonging contribute to higher engagement as well. Belonging means the extent to which colleagues believe they can bring their authentic selves to work and be accepted for who they are. In August last year, we took a baseline measurement of belonging as part of our first-ever diversity, equity and inclusion survey. We scored 72, which aligns us with the average of global companies. We aspire to do better than that and have set a target to improve belonging in this year's short-term incentive plan for executives, including the Executive Board. To improve belonging, we're focused on the following actions: first, raising our team's awareness of our company's larger purpose; second, increasing our communication on the progress of our company overall and supporting our managers in reinforcing that we appreciate and encourage different perspectives and that we see a diverse workforce and diverse perspectives as being absolutely critical for innovation, creativity and growth. Another area that we've stepped up in the coming -- that we will step up in the coming years is in climate-related disclosures. We score well on ESG today, and we operate in a sector that is not carbon-intensive. But we recognize the need for our industry to play its part and to demonstrate that we are minimizing our environmental impact. We have been reporting on Scope 1 and Scope 2 emissions for over 10 years and have several decarbonization programs in place. And we have a carbon-related metric embedded in executive remuneration. We reported significant progress for 2021 in reducing our real estate footprint and in decommissioning our on-premise servers, both actions reduce our overall admissions. But we certainly want to enhance the scope and robustness of our data and develop a road map for the coming years. We stated in our 2021 annual report that we are committed to aligning our practices and reporting with the guidelines recommended by the task force on climate-related financial disclosures and to develop science-based targets. To achieve this ambition at the start of this year, we kicked off a project to assess our complete greenhouse gas footprint, including Scope 3 and, ultimately, to develop targets and abatement plans that can be externally verified. Before I sum up, I'd like to just touch on the outlook that we gave in February of this year. We stated that we expect good organic growth this year, although slower than in 2021 due to the challenging comparable starting in the second quarter of this year. We indicate that we expect to increase our adjusted operating profit margin into the range of 25.5% to 26%. We guided to adjusted free cash flow between EUR 1.025 billion and EUR 1.075 billion in constant currency. And finally, partly reflecting a higher tax rate, we said we expect diluted adjusted EPS in constant currencies to increase at a mid-single-digit growth rate and return on invested capital to increase to around 14%. So in summary, in 2021, we delivered strong financial results and advanced on several ESG fronts. We developed our new 3-year strategic plan, which will see us take steps in the coming years to accelerate our expert solution portfolio, expand our reach and evolve our core capabilities. And we set our guidance for the year ahead, which included mid-single-digit growth in diluted adjusted EPS in constant currencies. So with that, I'd like to thank you for your continued support as shareholders of Wolters Kluwer and turn back to our Chair. Thank you very much.

Thank you. Thank you, Nancy, for this presentation. Ms. Horan, next to me, Chair of the Selection and Remuneration Committee dealing with remuneration matters, will now introduce agenda item 2c, the advisory vote on the remuneration report as included in the 2021 annual report. And this agenda item is submitted to you for an advisory vote in accordance with Dutch law. By voting, you can indicate whether you believe the 2021 remuneration report provides a clear and comprehensive overview of all remuneration awarded to or -- due to individual members of the Executive and Supervisory Board over the last financial year. The remuneration report itself can be found on Pages 76 to 97 of the annual report and is also separately posted on our website. I also refer you to Note 38 of the financial statements, which can be found on Page 191 of the annual report. Jeanette, please go ahead.

Thank you, Frans. At last year's AGM, we introduced a new Executive Board remuneration policy that was adopted with strong support from shareholders. The new policy brought several important changes to remuneration, which were implemented last year. These changes can already be seen in the 2021 short-term incentive and will start to become evident in the long-term incentive payout when the 2021 to 2023 cycle matures in 2 years' time. The full details are in the remuneration report, but let me provide a summary here of how performance drove remuneration in 2021. As a reminder, the base salary for the CEO was not increased in 2021. And for the CFO, the base salary was increased by 2.5%. This slide shows the targets and actual performance on the short-term incentive. The cash bonus for 2021 was linked to 3 financial targets and 6 nonfinancial targets, as shown in the table on this slide. The financial targets were weighted at a combined 90%, while the nonfinancial targets were weighted at 10% in total. Due to the strong financial performance that Nancy just outlined for you in 2021, all 3 of the financial targets were exceeded. For revenue, performance was 3% above target. For adjusted net profit, performance was 9% above target while for adjusted free cash flow, performance was 24% above target. With regard to the 6 nonfinancial or ESG targets, the table shows the performance against 1 metric was slightly below target, performance on 2 metrics were on target and 3 were ahead of target. In aggregate, the nonfinancial measures resulted in a performance that was 4% ahead of target. So let's turn to the long-term incentive on the next slide, please. The long-term incentive, which matured at the end of 2021 and which covered the period 2019 to 2021, was, of course, set up 3 years ago and was under the former remuneration policy. As such, this plan was linked to 2 measures: relative total shareholder return and diluted earnings per share, both weighted equally. With respect to relative total shareholder return performance over the 3-year period, Wolters Kluwer ranked in fourth position out of 16 companies, as you can see in the chart on the left, resulting in above-target payout for the TSR-related shares. With respect to diluted earnings per share, the company delivered a compound annual growth rate for diluted EPS of 15% in constant currencies, which was ahead of the target of 12.6%, which was set 3 years ago. This resulted in above-target payout for the EPS-related shares. Before handing back to the Chair, I'd like to highlight that in line with the commitments we made last year, the 2021 remuneration report includes significantly improved disclosures. We have, for the first time, provided prospective targets for diluted adjusted EPS growth and for ROIC. We continue to disclose the targets for the short-term incentive retrospectively. I'd also like to preview what you will see for 2022. As you can read in the annual report, we've streamlined the number of ESG measures in the short-term incentive to 3. For environmental, we've included a target for the number of on-premise service that are decommissioned during the year, which lessens our carbon footprint. For social, we have a target for belonging, as described by Nancy. And for governance, we will, again, include a target for our cybersecurity maturity score. And as a reminder, under the new policy that was adopted a year ago, the CEO's target remuneration in the LTIP plan will be reduced to 240% of base salary, which reduces the total target remuneration by approximately 10% compared to what it would have been under the previous policy. And with that, I'd like to turn it back to you, Frans.

Yes. Thank you, Jeanette. As indicated before, we now come to agenda Item 3a. The financial statements for the year 2021 have been audited by our independent external auditor, Deloitte. And their opinion can be found on the Pages 204 to 214 of the annual report. I would now like to invite Bas Savert, partner at Deloitte, to give a brief overview on the audit work performed by his firm. Bas, please.

Thank you, and good afternoon. Bas Savert, and indeed, I'm a partner at Deloitte and, since last year, responsible for the audit of Wolters Kluwer. And like in prior years, I will briefly discuss the audit, and I will use one slide to take you through the process. Our unqualified auditor's report was issued on the 22nd of February '22, and this report is included, as just mentioned, from Page 204 onwards. And in this opinion, we refer to our responsibilities as well as responsibilities of management with regards to both the financial statements as well as the other information included in the annual report. And this other information contains the strategic report and the governance section. And it's important to mention that these sections are -- work on these sections is limited to verifying that the legally required information is included and that the information is consistent with the financial statements. Like I mentioned, '21 was my second year as a signing partner on Wolters Kluwer. It was also the second year that we had to deal with the situation of COVID and working remotely. This especially impacted obviously the audit procedures itself and the oversight of our component auditors in other regions. But I must say that it was, overall, a smooth process, and we didn't have a lot of impact or negative impact from that situation. During the year, we frequently discussed our audits with the Audit Committee. We had sessions both with the Audit Committee members and management but also without management being present. And in those sessions, we discussed our audit plan, the key reporting deliverables, such as the management letter and the report for the full year. And the approach was relatively consistent with prior years. So the group materiality increased a bit in line with the profitability to EUR 60 million and with the consolidated group companies, so the subsidiary audits were performed with a lower materiality level, which did not exceed EUR 26.4 million. Furthermore, for certain areas, more qualitative reasons drove us to further reduce the materiality level. And you can think of disclosures or topics such as remuneration. The key areas of our audits were discussed -- are reflected in our auditor's report, and they were also relatively consistent. So the valuation of goodwill is a point where we always have a good look at revenue recognition and relevant internal controls. And the procedures in these areas have not resulted in reportable matters to be included. We did report certain recommendations on internal controls like we always do, and they are included in the management letter. And I must say that overall, if you look at the number and the severity of the deficiencies that they reduced compared to previous years, and there were only very limited number of recurring findings. Besides the areas addressed in the key audit matters section, we also placed emphasis on some other areas, such as the coordination of our group audit, fraud and compliance growing concern and the first year of reporting under ESEF, the whole digital filing. And I would like to refer to the full report or to the report as included in the annual report for more details about our audit and about the key audit matters. So that summarizes the audit from my side. Thank you for your attention. I give the word back to the Chairman.

Thank you, Bas. Now I would like to take the questions related to the agenda items 2a, b, c and 3a. And we will start with questions that were provided by shareholders in advance of the meeting. Then we will take questions from the room here in Alphen. And then we will open the audio line with the shareholders attending remotely. So every voting item, we will take this order. [Operator Instructions] Please note that these questions should be about the 2021 annual report, consisting of the report of the Executive Board, the report of the Supervisory Board, the remuneration report and the financial statements. Now we have received questions in advance of the meeting from European Investors-VEB, APG Asset Management and Achmea as well as from the VBDO present here today. We thank them for sharing their questions with us and are happy to have the representative in the meeting here today. Let me start with no less than 9 questions submitted by the European Investors [ group ], the VEB. Five of the questions are for Nancy. I have found out 2 for Kevin and 2 -- well, 3 for Kevin and 1 for Mr. Savert. I will read out the questions and then hand out for answers. Is that okay? The first question from the VEB. Wolters Kluwer has made significant progress in shifting from the declining print publishing model to a digital model. This improved the sustainability of the company and an improved operating margin above 25%. That's good. And now the question, to what degree has this shift exposed the company to more competition from potential disruptors? Nancy?

Thank you. So over the years, Wolters Kluwer has transformed not just from a print publisher to a provider of digital information but very importantly now a major provider of expert solutions. So if you look at the business today, that has improved our competitiveness in the market, and we have very high retention rates particularly in these expert solution products. And so we see that when there are disruptions in the market, it generally comes from some unique application of technology to our segments. And so as long as we can continue to make the kinds of investments that we do make, reinvesting 8% to 10% in -- of our revenues back in products, we believe we will remain highly competitive and that we can deal with any of the disruptions that might come along. And to date, we've had a very successful track record of maintaining our -- and increasing our relative competitive position.

Thank you. Question number two, today, Wolters Kluwer business model is primarily based on subscriptions, software maintenance and other recurring revenues, about 80%. As a consequence of the Russian invasion of Ukraine, global recession risks have increased. And then the question comes, to what degree would a recession impact revenue and earnings of the company?

Yes. So if we use a benchmark of looking back at the global financial crisis that happened in 2008, 2009, we experienced an organic revenue decline of minus 3%, but that was in large part due to print that, at the time, accounted for about 1/3 of our revenues. And today, print only accounts for about 8%. So we would expect that print would get affected but, again, a smaller impact today than that recession. And we would also expect that a recession would impact our nonrecurring revenue streams, such as our transactional services as well.

Question three, Wolters Kluwer has previously remarked that customers want to reduce the number of supplies and prefer products that work together. In which business divisions does Wolters Kluwer see the biggest opportunities to improve its current product portfolio in order to improve its market position?

Yes. As I mentioned, we have a very strong market presence across all 4 of the verticals that make up the company. Where we are focused is really beginning to build out our ecosystems around our strong software platforms like our CCH Axcess business, which is our Tax & Accounting business in the U.S., and use these strong market positions to grow, not only our overall market share but grow the amount of money that our clients spend with us. So we see opportunities across all 4 divisions and, again, very focused on our expert solution portfolio as being the place that we can continue to increase both market share and our competitiveness.

Okay. Next one, in an industry that is characterized by high retention rates, including competitors like Thomson Reuters and RELX, cross-selling to existing customers is very important, according to VEB. Question, how much more products is Wolters Kluwer able to sell to its existing customer base to drive its organic revenue growth?

Yes. We have tremendous opportunities to grow through cross-sell. In fact, that is the largest opportunity because everyone does have high retention rates. And so we do that through 2 major areas of investment. One is in new innovation. And so we have a steady stream of new products that come out every year that we target our existing customers for additional sales. And then the second place is just more coverage going out to new segments. That's part of our second pillar on expanding. Our reach is to modify some of our products to go after new segments. So cross-sell remains a very important element. A good example of that is we just launched this product earlier this year called Validate, which basically uses blockchain technology to assist auditors in the confirmation process that they have to go through that they interface with financial institutions. That's a product that goes right again at the core of our audit clients. And so that's a great example of a new innovation. And so that's going on again throughout the portfolio of Wolters Kluwer.

Question five of the VEB. Wolters Kluwer announced a new 3-year strategy with several strategic priorities. At first look, it looks very similar to the previous strategy. What would you point to as notable changes that impact investors?

Yes. There's really 3 things. As I mentioned, it's really a reinforcement and refinement of the prior strategy that was successful. And the areas of refinement are even more investment in expert solutions. That is the future of the business. Second is strengthening some of our centralized functions, particularly in the go-to-market area. And third is really stepping up and advancing what we're doing in the ESG space, both internally, but also that we are a provider to our clients of software that helps them in that area. So those would be the 3 areas of refinement that I'd like to highlight.

Thank you, Nancy. Question six. Many listed companies in recent months were impacted by inflation, ranging from higher commodity prices to higher wages. What financial impact does inflation have on Wolters Kluwer? And to what degree were you able to absorb these cost increases by charging higher prices? Kevin, that is one for you.

Certainly. In our case, our biggest component of wage inflation is wages on inflation. We really do not buy raw materials in any meaningful way. Like many people, we are seeing upward pressure in wage inflation, particularly in technology talent, software engineers and others in the technology field. For many years now, it has been our practice to cover our wage inflation with price increases with our customers. And I do believe as we move forward through both price increases and looking for further efficiencies in our cost base, we will be able to manage through this process effectively.

Okay. Clear. Seven. Wolters Kluwer continues to believe that in the long run, a net debt-to-EBITDA ratio of around 2.5x is appropriate due to the high level of recurring revenues and resilient cash flow. And the question on the VEB is, what catalyst would be required to move towards that leverage target as the -- at present, we are a much lower figure. Kevin?

Indeed. As we've matured through this transformation into a digital software organization, more than ever, we do believe that a net debt-to-EBITDA target of 2.5 is the appropriate level for Wolters Kluwer. It is a target. There have been times when we've been above it. And indeed, in the last several years, we have been below that target. Obviously, during a pandemic or uncertain times, being below the target is probably not a bad place to be. So we will deviate from that target from time to time. There's no one specific catalyst that would move us toward that target at this stage of the game, things such as further returns to shareholders or M&A activity but it would likely be a mix of those different components.

Yes. Thank you. Then the last 2 questions by the VEB. Firstly, Deloitte identified management override of controls as a fraud risk. The risk of overriding internal controls is supposed to be present in every audit. Question, can Deloitte provide examples of high-risk journal entries that were identified and examined? Now let me first ask Kevin as CFO of the company to answer that question and then Mr. Savert can add anything if he would like to do so.

Certainly, as appropriate, that should be part of every audit. And I can say that we've got a very robust internal control process at Wolters Kluwer to ensure any types of control breaches are monitored and reported. There were no reportable events in this audit, but we continue to focus on our control environment. And as you heard from Deloitte's report, we have seen a strengthening in that control environment, so without any reportable events for this year. So I do believe that we are progressing well on that front.

Mr. Savert, would you like to add anything to that statement, confirm it?

I can confirm that. So it's indeed improvements on the one hand in the internal control area. And it's a presumed risk for us. So it's not something that we specifically do for Wolters Kluwer, but it's normal as an auditor to look at management override as a risk.

Okay. Thank you. And then the last one by the VEB. In what specific ways do the audit procedures performed with respect to this fraud risk management override of controls different from the audit procedures performed in the context of key audit matters, revenue recognition in total controls reporting? Very specific question, maybe you're the best position to answer that one.

I can try. So I think for all relevant account balances that we audit, we look at the risks -- the relevant risks. Some of that are normal risks, some of that are fraud risks. So there's not a direct link between the key audit matter and a fraud risk, but it could be that if there is a fraud risk that it raises through a key audit matter. But I think as we explained in our key audit matters section, there's no fraud risk or events that specifically impacted our audits this year.

Okay. Clear. Thank you for these answers, 3 of you. In case the VEBs, any follow-up questions, we're happy to -- that they are representative. I believe it's Mr. Eric van den Hudding is also participating today remotely. If there may be any additional questions, please let us know, and we will follow that up later in the meeting at this agenda item. But first, I would like to turn to representatives present in the room here today. May I -- if present, please invite Ms. van den Heuvel speaking on behalf of Achmea at APG to present her questions. Please do. You have 3 questions. Microphone is coming.

Yes. Thank you. My name is Andrea van den Heuvel. I work at Achmea Investment Management. And the questions I will ask today are also on behalf of APG Asset Management.

Most welcome.

Thank you very much. The first question is with regard to agenda Item 2a, the report of the Executive Board for 2021. The customer focus and relationship has the highest level of materiality according to the latest materiality index. And in the annual report, it is mentioned that renewal rates for its largest subscription-based digital information products and services were maintained at high levels, above 90% and that the NPS scores for more than half of Wolters Kluwer's top products were maintained or improved. But considering that customer focus and relationship is the most material topic for Wolters Kluwer, we urge you to consider reporting on a higher level over these NPS scores. Can you commit to this?

Yes. Sorry. We see our work that we do in NPS as being highly confidential and competitively sensitive because not only do we measure our own product scores on a number of dimension, we also measure competition. And so we use that as a way to kind of understand how we can improve and where we can improve. And so the best method -- because we don't plan to disclose that given the sensitivity, the best method for shareholders to evaluate how we're doing is through the retention scores because there's a strong correlation between high Net Promoter Scores and overall retention. And so we really can't commit to do specific disclosures around NPS.

Ms. van den Heuvel, please continue.

My question regarding agenda Item 2c, the advisory vote on the remuneration report. We highly appreciate the improved disclosure. So thank you very much for that. With regard to the weighting of the STI nonfinancial measures that is maintained at 10%, and we were wondering why the Supervisory Board has decided to reduce the number of nonfinancial measures, but not to include weighting for the financial year 2022, while there is still room for increasing it to 20%? And can you commit to raising the weighting to 15% for the coming year?

Clear question. Jeanette?

Yes. So we got some feedback from some of our largest shareholders last year. The 6 measures was too many. It was too complex. And so we really took a good hard look to say what were the measures that were actually most material to our business, which is -- actually, the guidance we've had from many of our shareholders is for us to think about what will have the most impact. And that was why we decided to focus on the 3 measures that I outlined earlier. At this time, we don't actually have any intention to increase the weighting. We consult with a very large number of shareholders. And as you might imagine, the feedback on this topic varies widely on what people would like to see. For just now, we think that this is actually an appropriate percentage, and we are planning to stay with that for this year. But we will, of course, continue to seek feedback from our broader shareholder base and make decisions as we go forward.

[indiscernible] yourself.

Yes. Thank you very much.

And my last question is with regard to agenda Item 3a, and it's a question for the external auditor. Since book year 2016, one of the key audit matters is internal controls over financial reporting. The observations that were made on internal controls over financial reporting are reported to the Audit Committee. And we were wondering, seeing this comes back every year, if these are the same matters since 2016, if improvements have been made? And if it's clear under which conditions, this matter no longer will be earmarked as a key audit matter?

Okay. Mr. Savert, would you like to answer that question?

Yes. That's okay. So it's not the same topic each year. So what we explained, we've seen the control environment develop and harmonization of systems over the years, more attention to internal control and also a lower number of control efficiencies. So that's a development on the one hand. So you could say, hey, is it then still a key audit matter? But on the other hand, we see also developments like COVID and how does remote working impact the control environment or an example, cyber -- increased risk in relation to cyber threats. So we see this as a changing and developing environment, whereby each year, we focus on what is most relevant, and we try to also capture that in our audit and report on that. So it's not that it's a standstill. There's definitely development, but there's also development in the world.

The world changes. Yes. Thank you. Thank you very much for those questions. May I now invite [ Anne Scott ]. Microphone -- yes, that's already done -- and to present the questions of VBDO.

Thank you, Mr. Chairman. Good afternoon, everybody. My name is [ Elizabeth Anne Scott ] from the VBDO, as announced by Mr. Chairman. The VBDO stands for Dutch Association of Investors for Sustainable Development. And it has been a couple of years now that we've been engaging with Wolters Kluwer this way, and that we're happy to continue that engagement this year as well. And the 3 topics we would like to discuss today refer to, number one, is biodiversity; number two is the labor conditions in the value chain; and number three is diversity and inclusion. I hear you thinking about like biodiversity and Wolters Kluwer, could it ever be material? So let me explain why we would like to put this on the agenda this theme. The World Economic Forum has identified in its risk report in 2020 by diversity as one of the top 3 highest risks for companies and for humanity in total. So it is interesting to at least be aware of that risk and to really look into what does it mean for us. Another topic in that area that has recently increased the attention to biodiversity and the value of biodiversity is the EU taxonomy. Also in that taxonomy, there is a lot of attention to biodiversity and its value, its importance. So yes, the reason why we would like to put this on the agenda in the engagement with Wolters Kluwer is that it's an important topic, and it may become a more important topic even than climate change. So let's have a look into that. And you could address it by looking into the risks. You could also look into what we think is the potential impact of Wolters Kluwer as an information provider. There might be a really serious business opportunity for Wolters Kluwer to play a role in disseminating, developing information, support tools in the coming years for all those professionals that need that specific information and support in this respect of biodiversity. So that's the question. Do you see as Wolters Kluwer a role for yourself to play in this increasingly important topic on biodiversity? So that's referring to SDG 14 and 15, just as a reminder. SDG stands for Sustainable Development Goals. So that's the first topic and question. Would you like to answer that [indiscernible]

Yes. So thank you very much. So today, we have a very limited role in reporting on biodiversity in part because we're not in the scientific world. We are in Legal, and we are in Health. So in Legal & Regulatory, we certainly do report today on biodiversity regulation and broadly in the context of environmental law. And within Health, we have certain publications, particularly around nutrition where we do publish on how can people through their diet and their food choices help this sustainability and help the cause for biodiversity. So that's there today. We will continue -- if new areas emerge that, again, affect our core customers, we'll continue to think about innovation and products in that area. But I would say today, it's a relatively narrow scope because of the fields that we operate in. Thank you.

Just a follow-up question on that. Indeed, well, today is indeed very limited. It's great that you have it on your agenda, the biodiversity opportunity. But I would like to learn if you see a role in the coming future to really developing to more -- yes, having access, getting access, providing access to biodiversity-related information for the professionals?

If that is something that our customers demand, I would say that ESG broadly is a very strong focus for us from a commercial perspective. We have already very strong solutions with our Enablon business and even our Tagetik business. So there is a deliberate focus. Biodiversity is a much smaller segment within the broader ESG. So if it starts to emerge, and it's something that customers say, hey, we need this product or we need some additional information, we'll, of course, respond. We don't see it happening yet, but it could happen stronger in the future.

Yes. We're really putting this on the agenda for you.

Yes, yes, yes.

Thank you very much. I'll move into the second topic that we would like to discuss. That's mainly related to SDG 8, which means it's labor conditions in the value chain. As you may be aware, the European Commission has recently adopted a new due diligence directive that will turn into legislation. It requires companies to identify, address and remedy their impact on human rights in the value chain. So that's quite broad, but important. And we appreciate that you have already worked with the third-party risk management program. That's a big important step to take. And we would be really eager to learn from you what has been the outcomes of working with this program, this third-party risk management program. Would you commit to report on the first outcomes in this respect such as outcomes of the supplier survey you've provided for, and for example, provide insight into opportunities to improve the labor conditions in the value chain?

Yes. So we've had a Code of Conduct for our suppliers for many years now, both in terms of sustainability and human rights. We ask all of our suppliers to fill out surveys. We do even more due diligence on our bigger suppliers. And if you look at what we do, most of what we do is built by our own employees. And so most of our suppliers are in professional services or in technology arenas. And therefore, human rights is not necessarily -- and labor condition is not necessarily the #1 concern with those suppliers. It's really around cybersecurity, privacy, those kinds of topics because the nature of the work is done by highly educated people that generally have far higher than the living wage. So it's something we monitor. We talk about it broadly in our annual report. We don't anticipate doing more reporting on it unless, of course, new developments come out of the EU that require us to comply. But I feel very good about the track record that we have with continuing to actively manage the supplier network that we have. Thank you.

We appreciate, indeed, the efforts you're already taking, of course. The labor conditions we may refer to is further down the line in the value chain that you can consider, for example, the IT suppliers of the hardware in the cloud, those services. It's a little bit more remote for Wolters Kluwer, but still it's related to the services and the supply chain of Wolters Kluwer. So that may be an opportunity for you to really look into -- towards the future.

Yes. I would say our biggest infrastructure, if you separate IT from the software development part that, again, is largely done by highly educated people with the hardware part, most of our hardware providers are the big 3. It's IBM. It's Microsoft. It's AWS, which is part of Amazon. And so they have their own standards that are also very high. So in general, as we've consolidated our suppliers, as we've moved more to cloud computing, again, it strengthened our relationship with the suppliers from a labor perspective. So I would still say that we feel very good about who we're partnering with in that arena. Yes.

Just as a conclusion for myself to understand it correctly. So you don't intend to commit to reporting on the outcomes of the risk program? [indiscernible] at the moment?

Not any more than we -- yes, not any more than we do today. That would be where we come out, yes.

Okay. We'll learn more about that. The third topic consists of 2 questions. That is about diversity and inclusion. It's an important topic for Wolters Kluwer. That has become clear as well confirmed today, indeed, with the belonging score, which I personally think is an interesting term to use. So let's look into that. It's a high priority right so. It's also included in the Board's remuneration, which I think is also correctly plays a role there, looking into the importance it plays. And you already highlighted some of the plans that you have to increase and improve the belonging score. So that's -- thank you for that insight -- that additional insight that you provided. Could you also perhaps explore a little bit more on what is the -- what's the image you have of Wolters Kluwer having that increased score? Could you -- that schedule? Yes. I don't know how, but tell a little bit more about what would Wolters Kluwer look like if it has not 72 score, but let's say, 90? And which partners would play a role to get there would be very interesting for us to learn more.

Yes. So just on how do we come up with these scores. We partner Glint, which is a Microsoft-owned company that does all a lot of our survey work. So -- and we use them every year. So part of what we look for is exactly that, what is the trend line. So why is this important? First of all, we believe within the company in a very strong way that diversity at all levels leads to better innovation and better business results. So there's a very pragmatic reason to commit. And we also know that higher engagement leads to higher employee retention. And right now, like many other companies in the world, recruiting employees -- we have many, many open positions, and we -- that is a factor that creates challenges on our product road maps, challenges for growth overall. So we are highly committed to creating an even better -- we have a good image now among employees, but an even better image and a higher level of engagement and belonging because we believe it will directly impact innovation, recruitment, employee retention. So that's -- it's very pragmatic in many ways, the focus that we have.

Well, thank you for that image, indeed. Could you perhaps elaborate more on which partners could play a role to get to that future image?

Yes. So we partner with a number of employer brands that help lift our over brands -- overall brand. So we have a lot of recruiting partners that we partner with on the basic sort of belonging and communications, a lot of that is internal. We're not partnering on those elements. And then as I say, we have partners that help do the actual survey. So we think we can do a lot of this ourselves because it's ultimately about when people come to work, how do they feel about Wolters Kluwer? Do they feel a sense of purpose? Do they feel a sense of belonging? And that is really our internal focus. Yes.

Thank you very much. Yes. My last question, Mr. Chairman.

Please.

Thank you. It's on the gender pay gap. As we all know, unfortunately, most companies -- in most companies, there is a difference in payment between men and women. So there is a trend in the last few years to make that clear to find out if that is the case. And if so, what are the reasons for that? And how can we, yes, help that get a way to fight that difference in this payment? For a couple of years now, in the U.K., that has been legislation. So indeed, Wolters Kluwer follows the rules of the legislation in the U.K., and you published the figures about the gender pay gap. Would you be willing to publish these figures as well for the entire company providing insight if there is a pay gap at all? And if so, the measurements do you take to fight that pay gap?

Yes. So we do a number of things to ensure that we have strong pay equity around the world. We've done a lot of work to continue to survey our compensation plans. We make adjustments where we need to. We're very proactive about that. So we feel confident that we can create a diverse and equitable workforce. I think we -- you see in the overall diversity numbers that we have that I think that's a good measure of success. And so we'll continue to comply with reporting where we have to. I don't think you should expect a broad proactive effort on us reporting on that. We really want to spend our time really on continuing to make sure that the programs are robust and not so much on the reporting. So I don't think you should expect more than what we have to do to comply. But it's, of course, a topic. And I think ultimately, all of this leads back to looking at our employee retention, looking at employee engagement because I think if you don't have good programs on compensation, you don't have the right measures in place on equity that, that's where you're going to see that have an impact.

Right. Okay. So you don't want to publish these figures on the gender pay gap that might be there, we don't know. For potential new employees that might be relevant information, although you refer to other figures and other statistics, of course, that for me, it would be an indicator is that an interesting company for me to join. But I'll leave it to you to decide not to do that. It's just a new consideration perhaps for you. Thank you very much.

Thank you.

For women to join, of course, it's also good to see that the majority of the Supervisory Board is women and of, let's say, the top 10 people in Wolters Kluwer, half of them are women, which is not a bad statistic, of course.

I agree, definitely. In that sense, Wolters Kluwer is ahead of a lot of companies, definitely. Yes.

Thank you. Thank you for the questions. Are there any additional questions of shareholders in the room? I see that there are none. The question then is, are there any questions of shareholders participating remotely, and I see that, that is the case.

Yes. Mr. Chair, we have a question from one of the remote participants from Mr. Eric van den Hudding of the VEB has a follow-on question. So if the operator would open his line, so he could pose this question.

Yes. Thank you. This is Eric van Hudding from the VEB speaking. I have one follow-up question related to the leverage ratio target of 2.5x. Now of course, my question was quite specific with any catalysts. Now of course, you've noticed that it's below 2x. It's dropped to 1.4x last year. I was just wondering if you continue to do what you've done in the past, so let's say, over the last few years, with increasing free cash flow, with strong EBITDA, with net debt declining, with the current amount of buybacks, dividends and also the acquisitions, the leverage ratio might drop further. I was just wondering whether there's something that you're looking for in terms of doing maybe a large acquisition in the future or something that really might trigger this going back to 2.5x? Because if you say, yes, I'm comfortable with the current leverage ratio in terms of when there's a recession. And the other side of it also say, look, this is a very stable business with high recurring revenue, so it's -- yes, you could go to 2.5x, and it's a bit strange to stay at this low level of leverage. Thank you.

Kevin, try again.

Well, when it comes to capital allocation, Nancy and I are continuously striving to hit the right balance, the balance between investing in the business, being organic investments, new products, product enhancements as well as smaller bolt-on M&A type of activities, on the one hand, paying down debt and then rewarding our shareholders. And as we've discussed, we've been below the 2.5x net debt-to-EBITDA target that we have, but that's allowed us to step up the way we reward our shareholders. Over the last several years, you've seen the increase in the dividend. Last year, 15%. I believe the year before was something similar. We've stepped up the share buyback program that we announced in February. We now intend to buy EUR 600 million in Wolters Kluwer's shares. So that is part of the balancing act. The better performance and better cash flow has allowed us -- the lower debt ratio has allowed us to step up our reward to the shareholders. As I've said before, there's not going to be one catalyst in mind that would necessarily change the view that we have. It could be further shareholder rewards, could be M&A activity. I would say that most of our M&A activity, as you've seen in the past, have been smaller bolt-on acquisitions. At this stage, I would not guide anybody to expect a fifth division at Wolters Kluwer.

This might be the, of course, the only and last question from my side. So I also want to thank Frans for his years of work at the Wolters Kluwer since this is his last meeting.

Thank you very much, Eric. Thank you. Yes. Thanks, Eric. Any other questions in remote? No. So that means that we will start voting. [Voting]

As we are conducting a hybrid meeting today, I would like to inform all of you that the polls for all your voting items will be open as of now for all of them and will be closed after the last voting item on the agenda has been discussed, which is agenda Item 10. Voting results will not be disclosed during the meeting. Only after we have dealt with agenda Item 10, at the end of the meeting, we will show all the voting results. That is for efficiency reasons. Before we proceed and open the voting process for all agenda items, I will pass on the notary formal observations, which I promised you before, and I have them here. According to the registration list, 4,309 shareholders are present or represented who can jointly cast 203 million and a little bit of votes, representing 78.9% of the issued and outstanding share capital. Is that right, notary? Yes. And before the meeting, 4,300 shareholders submitted a total of slightly over 203 million votes to the notary by proxy. So that is confirmed by the notary. The voting operator confirms or should confirm now that the voting system is activated for agenda Item 2c as well as all other voting items. Can I have confirmation of that? Yes. Thank you. I propose to acknowledge the report of the Executive Board and the report of the Supervisory Board for the record and agenda item 2c. The remuneration report as included in the annual report will now be submitted as the first item to you for an advisory vote. You can vote, of course, in favor. You can vote against or you can abstain from voting. And please note yet again that the voting is now open. And as said, we will only share the voting results at the end of the meeting. Shareholders in the room or participating in voting may change their vote until the end of the meeting. So if you want to change your vote, you are able to do so.

Then we come to the proposal to adopt the financial statements. That is agenda Item 3a, the proposal to adopt the statements. And again, you can vote in favor, vote against or abstain, and we'll see the results at the end of the meeting. That brings us to dividends. And that is agenda Item 3b, the explanation of the dividend policy first and then the voting. The company, as you know, has a progressive dividend policy. This means that we aim to pay a higher dividend per share in euros each year compared to the previous year. The annual increase depends on factors such as financial performance, market conditions and the need for financial flexibility. It is also part of our policy to pay an interim dividend after the first 6 months of each year. As in prior years, the Supervisory Board has carefully reviewed the financial situation of the company and feels confident that the company can indeed pay out a dividend as planned without any liquidity risks. I also refer to the earlier presentation of Nancy in this respect. In line with this policy, we proposed to a total cash dividend of EUR 1.57 per ordinary share for the last financial year. And this represents an increase of 15% or EUR 0.21. And since an interim dividend was already paid in September last year of EUR 0.54, the final dividend payable next month will amount to EUR 1.03 in May 2022. Upon your approval of the dividend proposal for over the last year, this will be the 16th executive -- consecutive year in which the company will pay a higher dividend. As in prior years, it is intended to maintain the interim dividend for 2022 at 40% of the prior year's total dividend. I would now like to address any questions about the dividend policy and the proposed dividend for the year 2021. And we will start out with questions in the order set out before. We have not received any questions in advance of the meeting for this agenda item. Are there any questions for shareholders in the room? I see that there are none. So are there any questions from remote participants? I kindly ask the operator to open the queue.

No questions from remote participants.

Thank you, Meg. There are no questions. So thank you. Please vote on this item. You want a dividend, I assume. [Voting]

That means we come to agenda Item 4, which is the release of the members, 2 Boards. Familiar item for the proposal to release the members of the Executive Board and members of the Supervisory Board from liability are separate agenda items and will be voted on separately. However, I will deal with any questions on this Item 4a and 4b together. There are no pre-submitted questions on this agenda item. Are there any questions by shareholders in the room? I see that there are none. And Meg, no questions from remote.

No questions from remote.

Thank you for that. Please vote on this subject. [Voting]

The next item is the proposal to appoint Ms. Heleen Kersten, present, as a member of the Supervisory Board. As you can read in the explanatory notes to the agenda, I will retire from the Supervisory Board at the end of this meeting. The Supervisory Board has appointed Ms. Ann Ziegler, I mentioned it before, as my successor in the capacity of Chair of the Supervisory Board, and Ann will also take on the role of Chair of the nominating function of the Selection and Remuneration Committee. Mr. Jack de Kreij, to my left, to your right, will succeed Ann as Vice Chair of the Supervisory Board. And I wish them all the best in taking up their new role, of course. In accordance with the Articles of Association of the company, the Supervisory Board proposed the appointment of Ms. Heleen Kersten as new member with effect from today for a first term of 4 years, so up to and including the shareholders' meeting in 2026. Ms. Kersten brings experience from several boards as well as expertise in the field of corporate governance and M&A to the table. Upon her appointment, Ms. Kersten will become a member of the Selection and Remuneration Committee. Once appointed by you, the Supervisory Board will consist, as mentioned before, out of 7 members in line with the profile of whom 4 women and 3 men with 4 nationalities. Heleen, may I please ask you to briefly introduce yourself.

Thank you, Frans, and it's my pleasure to introduce myself. I'm really honored to be nominated as member of the Supervisory Board of Wolters Kluwer. In preparation of my membership, I have acquainted myself with the organization and spoke with various leaders across the organization. Based on these conversations, I can tell you that I'm really impressed by the quality and the dedication of the people working at Wolters Kluwer and the position of the company as a result of the impressive transformation. I was also pleased to learn that there is a strong focus on ESG, as also explained today by Nancy, which will be an important element in the recently announced 3-year strategy. As a partner in the Dutch law firm Stibbe, I am specialized in advising on mergers and acquisitions, corporate law and corporate governance. Looking at the 3-year strategy plan at Wolters Kluwer and the focus on ESG, I hope to share my experience and be of value when working with the Supervisory Board and with Nancy and Kevin. From a personal perspective, I'm married. I have 4 children. I'm also the Chair of the Netherlands Red Cross, and I'm a member of the Supervisory Board of STMicroelectronics. And I'm also a member of the Supervisory Council of the Dutch [ Rijksmuseum ]. Again, to become part of the Supervisory Board of Wolters Kluwer, I see as a great honor and opportunity, and I look forward to working together with the Supervisory Board and the Executive Board on the continued success of Wolters Kluwer in the future. Thank you very much. Thank you.

Thank you, Heleen. In the explanatory notes to the agenda and in the more detailed resume that was made available also on the company's website, you will be able to read even more about the background of Ms. Kersten. Let me start with if there are any questions about this appointment. There were no questions by shareholders in advance. Are there any questions by shareholders in the room? No. I see that there are none. Are there any questions by shareholders remotely?

No.

No. There are none. So thank you. And please be reminded to vote -- to cast your vote on this subject. We'll see the results at the end of the meeting. [Voting]

We now come to agenda Item 6, the proposal to amend the remuneration of the members of the Supervisory Board. Based on the regular review by the Supervisory Board of their remuneration, which was amended most recently in 2020, it is proposed to increase the Supervisory Board remuneration with effect from the first of January this year. Again, Ms. Horan, Chair of the Selection and Relations Committee dealing with remuneration matters, will give a brief introduction to this agenda item. Jeanette?

Okay. Thank you very much, Frans. As Frans said, we are proposing to increase the annual remuneration for the Supervisory Board members, and the details are laid out both in your agenda. And also if we could have the chart please put up. As part of our normal process, we assess the remuneration of the Supervisory Board members every 2 years, and we did conduct a regular review in 2021. And the increase that we're proposing is in line with our policy and considers the responsibilities of the Supervisory Board members, the remuneration levels of 2-tier Boards at other Dutch listed companies and some other European companies. So we ask for your support for this item. Thank you, Frans.

Thank you, Jeanette. We are now -- I would like to cover any questions about the proposed amendments for the members of the Supervisory Board. Operator, please open the queue for any more participants. But before we come to that, we have received one question in advance of the meeting from the VEB, which I will read out. And Jeanette, I hope you will answer that question. And it goes as follows. The VEB notes that this proposal marks the fifth amendment to the remuneration policy of the Supervisory Board in just 7 years' time. Earlier, things were put to the vote in 2020, 2018, 2016 and 2015. In our opinion, the VEB, the rationale for the proposed amendment would benefit from a more meaningful explanation. The explanatory notes to the agenda, the Supervisory Board mentions, in particular, a review performed of remuneration levels at other Dutch listed companies and selected European companies, as you have just indicated. And the question now is, what indigenous factors, e.g. Wolters Kluwer specific arguments were considered?

Yes. Thank you, Frans. As I say, we really -- as a global company, we strive to attract Board members from very diverse backgrounds from -- both within the Netherlands and also given that 50% of our -- or more of our businesses in the United States, we also try to attract members from the United States. So we definitely need to ensure that we can actually attract and retain Supervisory Board members. The review that we conducted this year was done by an outside firm. And so it did certainly look at what is competitive in the market. You also have noticed that there have been a number of events over the last couple of years related to COVID, return-to-work policies, the situation in Ukraine, how it impacts our business. We have done a number of mergers and acquisitions. And I think all of these factors relate to the contribution that Supervisory Board members are expected to make to the company and that these factors are, in fact, in addition to just the peer-to-peer benchmarking.

Okay. Thank you. Any questions on the subject from shareholders in the room? I see that there are none. Any questions from shareholders other -- remotely?

No. No question from remote.

No. Okay. Please be reminded to cast your vote on this subject again. [Voting]

And this is an agenda item, which requires a 75% majority vote under Dutch law. The other -- all the other items require 50%.

Agenda item 7, 8 and 9, these are the annual authorizations given to the Executive Board that we turned to the agenda each year, and you're familiar with them. Under agenda Item 7, 8 is proposed to extend the Executive Board's authority to issue shares and/or grant rights to subscribe for shares for 18 months as of today up to a maximum of 10% of the share capital issued as of today. Agenda Item 7b concerns the proposal to extend the Executive Board's authority to restrict or exclude the preemption rights of holders of ordinary shares for 18 months as of today up to a maximum of 10% of the share capital issued as of today. And under agenda Item 8, it is proposed that the Executive Board again be authorized for 18 months to acquire shares in the company up to a maximum of 10% of the share capital issued. Agenda Item 9, request a resolution for the Executive Board if it wishes so to cancel the ordinary shares in the company's share capital that the company has purchased or will purchase on the basis of agenda Item 8 just mentioned up to a maximum of 10% of the share capital issued. For your information, in September 2021, the company completed a reduction in the share capital by canceling 5 million shares that were held in treasury, representing about 2% of the then issued share capital. And the precise wording of all these resolutions can be found in the agenda with its accompanying explanatory notes. Questions about this subject -- we have not received questions in advance of the meeting. Any questions by shareholders in the room? There are none.

No questions from the remote audience.

Thank you, Meg. And please -- I have to continue saying please be reminded to vote -- to cast your vote for this agenda item -- for these agenda items. [Voting]

Agenda Item 10. Following -- and that's the proposal to reappoint the external auditor Deloitte. Following the recommendation of the Audit Committee supported by the Executive Board, the Supervisory Board proposes to reappoint Deloitte Accountants B.V. as the external auditor for a term of 2 years for the reporting financial years 2023 and 2024. As such, the engagement of Deloitte shall not exceed the maximum duration of 10 years under Dutch law. The Supervisory Board reserves the right to submit the appointment of the external auditor to the General Meeting of Shareholders before the lapse of the 2-year period, if this is deemed necessary by the Supervisory Board. And again, the precise wording of this resolution can be found in the agenda with accompanying explanatory notes. Any -- yet again, we did not receive any questions in advance of the meeting of this agenda item. Any questions by shareholders in the room? I see there are none. No questions by.

No questions from the remote audience.

Thank you, Meg. Please cast your vote on this item again, if not already done so. [Voting]

Before we go to agenda Item 11, which is any other business, we will now come to the voting results. Very important. And therefore, ladies and gentlemen, this is your last opportunity to submit your vote on any of the items, if not already done so. We will take into account a little potential delay in the transmission of this video webcast. I will then request the voting operator to present the results, which I will read out loud. Gathering and presenting these results will take a few minutes, and I request your patience for that and our patience as well. In the meantime, we can watch a short film reflecting the purpose of Wolters Kluwer. Please go ahead with the film. [Presentation]

Well, that was great. There's a short and [indiscernible] good film. The voting results. May I request the voting operator to share with us the voting results for agenda item 2c, 3a and 3c? And you have them on your screen here, and they are as follows: 94.38% of the votes have been cast in favor of agenda Item 2c. And therefore, the 2021 remuneration report has been approved, supported. 99.88% of the votes have been cast in favor of agenda Item 3a, the proposal to adopt the financial statements. And I conclude that the 2021 financial statements have, therefore, been adopted. On behalf of the entire Supervisory Board, I would like to express our appreciation to the Executive Board and all executives and employees for the management pursued and work performed in the year 2021. 99.59% of the votes have been cast in favor of agenda Item 3c, the payment of a total dividend of EUR 1.57 per ordinary share, resulting in a final dividend of EUR 1.03 per ordinary share. And I hereby conclude that the meeting has resolved to pay a total dividend of EUR 1.57 per ordinary share, resulting in a final dividend of EUR 1.03 per ordinary share. May I now request the voting operator to share with us the voting results for agenda Item 4a, 4b and 5? Yes, there -- they are. 98.87% of the votes have been cast in favor of agenda Item 4a. And therefore, the proposal to release the members of the Executive Board from liability for the exercise of their duties have been adopted. And the same percentage, 98.87% of the votes have been cast in favor of agenda Item 4b, and hence, the proposal to release the members of the Supervisory Board from liability for their exercise of duties has also been adopted. 99.47% of the votes have been cast in favor of agenda Item 5, I hereby confirm that the meeting has appointed Heleen Kersten as member of the Supervisory Board for a period of 4 years, so until the Annual General Meeting of 2026. Heleen, may I be the first to congratulate you?

Thank you.

May I request the voting operator to share with us the voting results for agenda Item 6, 7a and 7b? And here they are. 98.98% of the votes have been cast in favor of agenda Item 6, the proposal to amend the remuneration of the members of the Supervisory Board. For this agenda item, 95 -- sorry, 75% majority vote was required for adoption in the Netherlands. And therefore, I hereby conclude that the meeting has adopted the proposal to amend the remuneration the members of the Supervisory Board. 98.86% of the votes have been cast in favor of agenda Item 7a. And therefore, the proposal to extend the authority of the Executive Board to issue [ shares ] and/or grant rights to subscribe for shares has been adopted. And 97.88% of the votes have been cast in favor of agenda Item 7b. And therefore, the proposal has been adopted to extend the authority of the Executive Board to restrict or exclude the statutory preemption rights. Good. Voting operator, please may -- I request you to share with us the results for the agenda Items 8, 9 and 10? Here they are. 99.15% of the votes have been cast in favor of agenda Item 8. And therefore, the proposal has been adopted to authorize the Executive Board to acquire shares in the company. That is followed by 99.97% of the votes have been cast in favor of agenda Item 9. I hereby conclude that the cancellation of shares has been adopted in accordance with that proposal. And 99.94% of the votes have been cast in favor of agenda Item 10. And therefore, the proposal has been adopted to reappoint the external auditor for a term of 2 years. Congratulations for that. And that is all the results of the voting. Very efficient. Thank you for all that work and technical work to get to that point. I will now proceed to any other business and handle any remaining questions before we close the meeting. There are no pre-submitted questions. Are there any questions of shareholders in the room? Observations? None. Any questions, observations?

No questions from remote.

No. Thank you for that. Thank you. That means that we come to the point of closing.

Yes. Frans, I have one item. Please permit me to say a few words to you to express our gratitude as members of the Supervisory Board. And I also speak on behalf of Nancy and Kevin here. We want to thank you for your many contributions over the past 5 years and your excellent leadership of the Board. We appreciate that you extended your term for another year during the pandemic, which was of great benefit as we manage the many challenges the pandemic presented us and enabled the Supervisory Board to look ahead. We really enjoyed working with you and getting to know you over these past 5 years, and we wish you all the best. Thank you, Frans.

Thank you. Very kind words. I arrived in November 2016 in this company. I was appointed -- and it was a great pleasure to be allowed to do the job from -- right from day 1 as Chair. And you gave that possibility to me, you as shareholders. It's a company with great and consistent leadership. Nancy has been here for -- since 2003, I believe, Kevin, 2013. The company was a great portfolio where improvements have been made over the last 5 years and was good organic growth. And over the 5 years, I had -- I've seen the share price triple. That's a big achievement by the Executive Board and other executives. The reason that I leave is particularly that I'm 70 years old, and I think that is really the moment to hand over to a younger generation. I'm particularly proud of the fact that the new Supervisory Board now consists majority of women. And I have seen over time -- personally, I do believe that diversity improves discussion and decisions in the company. And lastly, I would like to say that -- with Ann Ziegler, you will have an outstanding Chair of the company in my view. Thank you very much.

Thank you.

And with that, I close the meeting. Your participation and input was very much appreciated today. And I wish you good health in these extraordinary circumstances. Thank you very much. Bye.