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

Welcome to the Annual General Meeting of Shareholders of Wolters Kluwer N.V. This is a hybrid meeting, and we welcome both shareholders attending in person here in Alphen and those participating remotely. During today's meeting, all members of the Supervisory Board and Executive Board are present with Jeanette Horan joining us virtually from the United States. Our auditor, Mr. Savert of Deloitte Accountants, and our company's notary, Ms. Leemrijse of law firm A&O Shearman, are joining us here in Alphen as well. This is a hybrid meeting, which means that shareholders can participate either in person or remotely. This meeting is also being broadcast live via video webcast, and a recording will be made to correctly produce the minutes. We appreciate that many shareholders took the opportunity to exercise their voting rights by way of electronic or written proxy. Similar to the last few years, we will conduct the meeting in English, for which we ask your understanding. We kindly request that shareholders, who ask questions, do so in English. We have complied with all statutory provisions and the provisions of our Articles of Association for convening this meeting, and therefore, resolutions may be validly adopted at this meeting on all of the agenda items. As soon as the exact number of shares present or represented is known, I will inform you. Let us now turn to the meeting agenda. I would like to discuss Agenda Items 2a, b, c, d and 3a together. Item 2b, corporate governance has been included in the agenda in line with the amended Dutch Corporate Governance Code, which took effect as of January 1, 2023. In our 2023 annual report, we explained broadly our corporate governance structure and our compliance with the code. During 2023, we took the necessary steps to implement changes that followed from the new code. In particular, this included an update of the bylaws of the Supervisory Board and Executive Board as well as the terms of reference of the Audit Committee and the Selection and Remuneration Committee. To introduce Items 2a, 2b and 3a, I would now like to give the floor to Ms. McKinstry, CEO and Chair of the Executive Board.

Thank you very much. Sorry. Thank you, Ann, for the introduction, and I'd like to welcome all of you here at the meeting. I will discuss our key achievements in 2023 and our track record for delivering financial and sustainability results. And then I'd also like to touch on a recent focus area of our investment, which is generative AI. I will finish up with a summary of our first trade -- quarter trading update and an outlook for the remainder of 2024. So let's take a look at this slide, which highlights our key achievements in 2023. The economic and political backdrop posed a few challenges for us last year, but despite this, we achieved our guidance, delivering 6% organic growth and a further increase in our adjusted operating profit margin. Benefiting from lower financing and tax expense, diluted adjusted earnings per share increased 12% in constant currencies. We held adjusted free cash flow broadly stable at EUR 1.2 billion, which was also in line with our guidance. Return on invested capital improved significantly to 16.8%. The balance sheet remains very strong, enabling us to not only invest in the business, but also to make substantial returns to our shareholders. The strategic highlight was that our Expert Solutions, which are products that deliver both trusted content and workflow automation, reached 58% of our total revenues last year. We invested in product development at record levels, spending 11% of our revenues to bring valuable innovation to our customers. We formed a new division last year and further centralized several key functions, which we expect will yield benefits in the years to come. In terms of the ESG highlights, I'm proud to say we increased our employee engagement and belonging scores again last year. And our near-term emissions reduction targets were validated by SBTi. Now let's look more closely at our strategic progress in the second year of our current plan. The first pillar of our strategy is to accelerate our Expert Solutions. Our Expert Solutions grew 8% organically last year and includes some of our fastest-growing software products. This growth was supported by record levels of product development spending amounting to more than EUR 600 million. We launched several products that utilize generative AI technology, notably in our health and legal markets. We also made significant investments to develop and launch offerings that support our customers with new regulations. The second pillar of our strategy is to expand our reach. Here, the most notable development was the formation of our new division, Corporate Performance & ESG, which sets us up to expand our offerings that support companies with their sustainability reporting, analysis and assurance. In health, we acquired 2 companies, both of which extend our reach into adjacent market segments. The third pillar is to evolve our core capabilities. This involves enhancing our own operations and advancing our own sustainability performance. We centralized nearly all of our product development teams, created a unified global branding organization and centralized our worldwide finance organization. It was a busy year and one in which we are able to extend our long-term financial track record, as you will see on the next slide. As you see in the chart in the top left, organic growth was broadly in line with prior year at 6%. The chart next to this shows that the organic growth of our recurring revenue streams was sustained at 7%, while nonrecurring revenue slowed last year due to economic headwinds. Efforts to drive operational efficiencies helped us add another year of our history of annual increases in the adjusted operating profit margin, as you see in the chart in the top right. This, together with careful management of financing and tax expense and the effect of share buybacks helped extend our track record of steady growth in diluted adjusted EPS. Efficient use of capital has helped us deliver steady increases in return on invested capital over the years with ROIC reaching 16.8% in 2023. These financial achievements were delivered alongside several important sustainability efforts that we made last year, and I'd like to highlight just 2 of them on the next slide. The first one is to mention the validation by the SBTi of our near-term emissions reduction targets. These targets set us on a path to reduce Scope 1 and Scope 2 greenhouse gas emissions by 50% and Scope 3 emissions by 30% by the year 2030. These reductions are off of a baseline from 2019. Streamlining our office footprint will be the most important driver to reducing our Scope 1 and Scope 2 emissions in the coming years. The second achievement I'd like to highlight is the progress we've made on our sustainability reporting. In preparation for the EU Corporate Sustainability Reporting Directive, which will become mandatory as of the financial year 2024, we carried out an extensive initial double materiality assessment in 2023 based on the guidelines of the European Sustainability Reporting Standards, which is the mandatory reporting framework under the CSRD. Following this exercise, we reframed our sustainability disclosures to start bringing them in line with the ESRS. Furthermore, we substantially increased the level of our ESG data disclosures. I hope you have had a chance to read the sustainability statements in our 2023 annual report. On the next slide, you can see a handful of nonfinancial measures, which we track at Wolters Kluwer. We are aiming to join the top quartile of companies for both employee engagement and employee belonging. Every year, we conduct a global employee survey to measure these scores. We've had 2 years of solid improvement as shown in the 2 charts on the top left of this slide, which brings us closer to reaching our goals. We support engagement and belonging with a wide range of initiatives and programs throughout the year, which you can read about in our annual report. These programs have also contributed to the improvement in our employee turnover rate in what are still very highly competitive markets for top talent. The bottom right, you can see the track record of our real estate rationalization program. In 2023, we achieved a 5% underlying reduction in our global office footprint, which helped drive an 8% decline in Scope 1 and Scope 2 emissions. Now moving on to the next slide. Our track record of driving continuous improvement has enabled us to make consistent organic investments in the business, whether to enhance security or drive product innovation. This investment is critical to driving organic growth and creating long-term sustainable value for our customers, our shareholders and other stakeholders. This investment has also been key to maintaining a high standard of security, as you can see in the chart in the bottom left. One of the areas that we've been investing over a decade in is embedding artificial intelligence into our products in a responsible, sustainable manner, adhering to our responsible AI principles. Some 50% of our digital revenues come from products that leverage some form of AI. In 2023, we rolled out our first GenAI product applications. One of the first to launch was our UpToDate AI Labs, which brings the power of GenAI to our leading clinical decision support tool UpToDate. Today, this is a large beta test environment in which we are collaborating with over 100 U.S. hospitals. AI Lab has access to all of the UpToDate evidence-based clinical content across more than 25 specialty areas. It is the only large language model powered by the UpToDate content. We are partnering with major technology providers such as Microsoft and Google for much of this work, and we're very excited about what is to come in 2024. Now let me update you on our proposed dividend distribution and share buyback program. As noted, our balance sheet remains strong with a leverage ratio of 1.5x at year-end 2023. This allows us to invest organically in the business, make acquisitions while also returning our shareholders cash. Today, we are proposing a 15% increase in the total dividend per share to EUR 2.08. This results in a final dividend of EUR 1.36 per share to be paid out in early June. The dividend proposal is subject to your approval today. In February of this year, we announced our plan to repurchase EUR 1 billion in shares during 2024. And so far this year, we've completed about 1/3 of this buyback program. So now let's take a look at our share price performance. In addition to cash returns, our shareholders have also benefited from a 32% increase in the share price in 2023. The chart on the left shows Wolters Kluwer's share price in blue since the end of 2020 compared to the Dutch AEX in orange, the STOXX EURO 600 Index in black and the blue chip EURO STOXX 50 Index in red. Over the 3-year period ending December 31, 2023, Wolters Kluwer's shares have increased 86% in value, significantly ahead of all 3 indices. Stock markets have had a strong start to 2024. As of Tuesday's closing prices, Wolters Kluwer's shares are up 13% year-to-date, ahead of the STOXX EURO 600 and the EURO STOXX 50, but slightly lagging the AEX. Now a few words about our trading update for the first quarter. We've seen a good start to the year, and I'm pleased to reiterate the guidance we set out in February. Organic growth was 6%, supported by recurring revenues, which grew 7% organically, and Expert Solutions, which grew 8% organically. Organic growth in nonrecurring revenues increased 1% organically compared to 2% a year ago. The adjusted operating profit margin increased, reflecting favorable timing of expenses. Adjusted free cash flow also increased in constant currencies, while cash conversion came down as expected, mainly due to favorable timing of financing costs and taxes paid. So now just a few words about our outlook. We continue to expect good organic growth in line with 2023 and a modest improvement in our adjusted operating profit margin to be between 26.4% to 26.8%. We expect adjusted free cash flow will be broadly stable compared to the prior year in constant currency as cash conversion returns to historical levels of around 95%. We continue to guide to further increases in return on invested capital to be between 17% and 18%. And finally, we expect diluted adjusted EPS to show mid- to single -- mid- to high single-digit growth in constant currencies. If you take a look at the guidance by division. In Health and Legal & Regulatory, we expect organic growth to be sustained, in line with prior year. In Tax & Accounting, we expect organic growth to slow modestly for the full year, while in Finance & Corporate Compliance and in the new Corporate Performance & ESG division, we expect full year 2024 organic growth to be in line with or better than the prior year. The main areas for this year's margin increase are expected to be in Health, Legal and Regulatory and Corporate Performance & ESG. In summary, a good start to the year, allowing us to reiterate our guidance for 2024. I want to thank all of you for listening and your continued support as shareholders. Now back to you, Ann.

Thank you for this presentation, Nancy. Jeanette Horan, Chair of the Selection and Remuneration Committee, dealing with remuneration matters, who is participating remotely today, has prepared an introduction on agenda Item 2d, the advisory vote on remuneration report as included in the 2023 annual report. This agenda item is submitted to you for an advisory vote in accordance with Dutch law. By voting, you can indicate whether in your view, the 2023 remuneration report provides a clear and comprehensive overview of our remuneration awarded to individual members of the Executive Board and the Supervisory Board in the last financial year. The remuneration report can be found on Pages 77 to 88 of the 2023 Annual Report and is also separately posted on the company's website. I'd also refer you to Note 37 of the financial statements, which can be found on Page 200 of the annual report. Let's now go over to Jeanette.

Thank you, Ann. Relating to agenda Item 2d, which is the advisory vote on the 2023 remuneration report, I would like to provide a summary of how the company's performance against 1- and 3-year targets determines the remuneration outcome for 2023. This slide shows the short-term incentive plan measures, targets and actual performance for the year 2023. The short-term incentive was linked to 3 financial measures and 3 nonfinancial or ESG measures as shown in the table. The financial targets were weighted at a combined 90%, while the nonfinancial measures were weighted at 10% last year. The committee notes that 2023 was marked by significant internal changes at Wolters Kluwer. Notably, the formation of a new fifth division and the centralization of key functions such as technology development and finance. As described in the annual report, performance for revenues and adjusted net profit were in line with target, while performance for adjusted free cash flow was 1% above target. In the case of the nonfinancial measures, performance was ahead of target in each case. The employee belonging score was improved by 2 points, which was ahead of the target, which called for a 1 point improvement compared to the prior year. The indexed cybersecurity maturity score was also above target. In this case, the target is set to maintain the score at or above the benchmark for high-tech companies. And finally, the number of on-premise servers decommissioned last year was over 1,500, significantly exceeding the target, and this program has now reached a mature stage. More detail can be found in the Remuneration Report. The report also sets out the change we have made for the 2024 short-term incentive, which was to replace the server decommissioning measure with a goal that incentivizes the team to reduce our Scope 1 and 2 emissions related to our global office footprint. Let's turn to the long-term incentive plan performance on the next slide. The long-term incentive covered the 3-year period of 2021 to '23 and reflects the remuneration policy adopted in 2021. That policy established 3 key performance measures: relative TSR, diluted adjusted EPS and return on invested capital. With respect to relative TSR performance over the 3-year period, Wolters Kluwer ranked third amongst the TSR peers, as you can see in the chart on the left. This strong relative performance on TSR resulted in an above-target payout for TSR related shares. With respect to diluted adjusted EPS, Wolters Kluwer delivered a compound annual growth rate of 12.3% in constant currencies, which was ahead of the target of 8.3%. This overachievement resulted in an above-target payout for the EPS-related shares. With respect to return on invested capital, Wolters Kluwer achieved 16.9% ROIC in constant currencies, which was ahead of the target of 14.2% set 3 years ago. This overachievement resulted in an above-target payout for the ROIC related shares. Further detail, including prospective targets for these 3 LTIP measures can be found in the Remuneration Report. Before I turn the proceedings back to the Chair, I would like to say a few words. Today marks the end of my term as a Supervisory Board member for the company. It has been an honor and a privilege to serve the company over the past 8 years. I'd like to thank everyone at Wolters Kluwer for their commitment and dedication that led to the superb business results over that period. And I would like to thank you, our shareholders, for your engagement and support as we navigated through COVID and the implementation of the Shareholder Rights Directive. Thank you. Back to you, Ann.

Thank you, Jeanette. The financial statements for the year 2023 have been audited by the independent external auditor, Deloitte, and their opinion can be found on Pages 211 to 218 of the 2023 Annual Report. I would now like to invite Bas Savert, partner at Deloitte, to give a brief overview of the audit work performed by his firm. Bas, the floor is yours.

Thank you. Just a brief overview on the audit. And in accordance with the guidance also from the association of Dutch Auditors, we present today the highlights of the audit, kind of the story of the audit in a few words. And I have also used a slide to present that. I will reflect on the key audit matters as well as some of the more relevant topics of the audits, such as scope of the group audit, the use of specialists, materiality, our communication as well as the responsibility to other information included in the annual report. And first of all, I would like to refer to the Page 211 of the annual report in which you will find the full auditor's report that was signed on the 20th of February 2024. And this report contains our conclusions reached as well as other important information, including a description of our key audit matters and conclusions reached. Our audit is primarily aimed to conclude on the consolidated and company financial statements as included in the annual report, and we issued an unqualified auditor's opinion. Furthermore, there is additional information, such as the strategic report, the governance section, the sustainability statements as well as other information. For that information, we have verified whether that complies with the requirements of Dutch law and if there are inconsistencies with the financial statements in accordance with the Dutch Auditing Standards. And in our auditor's report, we have highlighted 3 audits -- 3 key audit matters. The first one being the new structure that was already explained a few moments ago, had a new segment. And the other 2 key audit matters related to revenues and the valuation of goodwill. And these 2 key audit matters are relatively consistent with prior year. For the segmentation, the key audit matter was chosen because it led to a restatement of information and reallocation of goodwill and also the need to add certain disclosures. And because this reallocation is relatively judgmental, we took an extra look to ensure that it was appropriate. Besides the key audit matters, there were also some other attention areas such as those related to fraud risks, the risk of noncompliance and ESG. And in assessing the risk of fraud and noncompliance and fraud, we involved forensic specialists. We considered the risk of management override of controls, and we performed specific procedures in that area such as making inquiries, testing journal entries, reading Board minutes and evaluating significant unusual transactions. Also, we reviewed whistleblower notifications, and we obtained representations. For ESG, we have also involved specialists in making inquiries and understanding elements contained in the sustainability statements. We have not been engaged to provide assurance of the ESG information, but we did cover the requirements just -- as I just mentioned, for other information. With regard to our scope, we reached a coverage of 79% of the consolidated revenues and 89% of consolidated assets with our procedures performed. We involved component auditors in several countries, including those in Europe and the U.S. And during the audits, we were in frequent contact with those audit teams, and we performed reviews of their working papers as well as the most important sections of their files. We used specialists in various areas, including for IT, tax and for valuations. And our materiality was in line with last year set at EUR 70 million for consolidated subsidiaries that are audited. We use a lower materiality, up to EUR 30.8 million. And we reported to management and the audit committee all entries or all proposed adjustments in excess of 5% of materiality level. And we also looked at other considerations, qualitative considerations in our reporting to those charged with governance. Then to our communication, our most important considerations/conclusions reached are included in the auditor's report that I just referred to. In addition to this, we also issued some more detailed reports, including an audit plan, the management letter and the year-end report. Finally, we are in the process of planning the 2024 audit, which will be our last audit before rotation to a new audit firm. Our approach for the financial statements audit is expected to be largely consistent with the 2023 audit approach. Effective 2024, additional requirements will exist in relation to the CSRD reporting, and those will be subjected to limited assurance procedures, and we are currently discussing the work on that. Also, we expect to spend adequate time to liaise with the new auditor on the rotation after 2024. That brings me to the end of my presentation. Thank you for your attention.

Thank you, Bas. We would now like to take questions relating to Agenda Items 2a, b, c, d and 3a.

Please note that these questions should be about the 2023 Annual Report, consisting of the report of the Executive Board, corporate governance of the company, the report of the Supervisory Board, the remuneration report and the 2023 financial statements. Are there any questions in the room? Ms. Lanquist?

The Dutch Association of Investors for Sustainable Development would like to continue its engagement with Wolters Kluwer about sustainability performance. Thank you for this opportunity. This year, we would like to ask 3 questions on specific topics. Topic 1, biodiversity. For the third consecutive year, the VBDO is engaging on the important topic of biodiversity. Unfortunately, VBDO was not able to find information on biodiversity in the annual report, except for the statement that biodiversity is not material for the company. Possible biodiversity risk and impacts for Wolters Kluwer could be related to the use of paper and mining of raw materials. Furthermore, data centers and e-waste thereof are known to impact land use, waste and water use, which could affect biodiversity and natural resources. Question one, how did Wolters Kluwer gain insight into the impacts of own operations and the value chain on biodiversity? Question two, what steps has Wolters Kluwer taken to gain additional insights into its impact and the risks on biodiversity in the supply chain, specifically beyond your tier 1 suppliers? Is Wolters Kluwer willing to report more in detail on this process in the next annual report? Topic 2, living wage in the supply chain. This year, VBDO is renewing its engagement with companies on the crucial issue of living wage. VBDO is pleased to see that Wolters Kluwer has identified the ESRS 2 standard, workers in the value chain as a material topic and your double materiality assessment and adequate wages as a material sustainability matter. VBDO acknowledges that realizing a living wage for supply chain workers requires a multi-stakeholder collaboration. Furthermore, at the upcoming corporate sustainability due diligence directive, CSDDD also recognized ensuring a living wage for supply chain workers as an important responsibility for companies. Question one, what steps has Wolters Kluwer taken in the journey towards ensuring a living wage for the workers in the supply chain? Question two, what specific actions will Wolters Kluwer undertake next to advance its approach and realizing a living wage for supply chain workers, also in the light of compliance with the upcoming CSDDD? Topic three, lobbying and advocacy. At last year's annual meeting, Wolters Kluwer stated that the company would look into lobbying activities as part of the double materiality assessment. Furthermore, VBDO inquired about the possibility to conduct research into what industry associations Wolters Kluwer is a member of support the Paris Agreement and report on this. However, VBDO was unable to find information on lobbying activities in their annual report. Although lobbying and advocacy is not a material topic to Wolters Kluwer, stakeholders increasingly demand transparency on the position of companies regarding lobbying and advocacy. Wolters Kluwer has not included the statement of the company's position on lobbying and advocacy in the annual report or on the website. Through the inclusion of a position statement on lobbying and advocacy, Wolters Kluwer could demonstrate its commitment to responsible corporate citizenship and align its actions with the interest of stakeholders. Questions. Can Wolters Kluwer clarify its position on lobbying and advocacy with regulators, industry and trade organizations? Will Wolters Kluwer include a disposition in the next annual report to enhance transparency? Will Wolters Kluwer include a list of the relevant trade and industry associations it is a member of in the next annual report? Thank you.

Nancy, would you like to address her questions?

Yes. Thank you very much for your questions. So let's start with the topic of biodiversity. As I indicated in 2023, we did an extensive assessment of our double materiality, and of course, looked at not just our own impact on the environment, but also our top 7 suppliers as well as looked throughout our value chain in terms of additional suppliers. We also looked at our usage of raw materials and hardware, again, mostly through our IT supply chain. And what we determined from that assessment was that biodiversity was not a material topic for Wolters Kluwer. And so, therefore, we are not reporting on it in any kind of extensive way. We will continue our efforts in 2 -- on 2 fronts, however. One is we will continue to assess, and if it should become material, do more extensive reporting. Secondly, we will continue to work with our suppliers to ensure that they are abiding by our focus on environmental standards. But you should not expect more extensive reporting as long as the topic remains not part of the materiality topic. Second, on living wage, this is -- the adequate wages is a material topic that came out in our assessment. We at Wolters Kluwer are very committed to paying adequate wages for our own employees as it relates to our suppliers. We continue to evaluate them and set standards and assessments around living wages. Most of our suppliers, I will point out, are mostly IT service companies, and so highly educated, knowledgeable and skilled workers. So it's not a particular issue per se with our suppliers, but we are continuing to increase our monitoring and increasing looking at our standards to make sure that, that is addressed by all of our suppliers, and we will continue to report on that in our sustainability. And then finally, as it relates to lobbying, again, as we did our materiality assessment, this did not come up as a material issue. We are part of trade associations, primarily in our Legal business and our Health division and a bit now with our new division in Corporate Performance & ESG. But our lobbying efforts are rarely direct, so really through these associations and not material from a financial perspective, which is, again, why you don't see that in our reporting. We will continue to monitor it from a materiality perspective, and we'll continue to think about how we might report more. But again, because of its very, very low materiality, you shouldn't expect a whole lot of additional disclosure at this stage.

Are there any other questions? Yes.

Good morning, my name is [indiscernible] on behalf of European Investors at VEB. I have a couple of questions. So maybe I'll leave it at the first 3 and then give the opportunity to other people to ask questions. First question is a recurring theme, I would say. I always ask a question about legal and regulatory. And I want to touch also on comments made in past AGMs. If we look at last year's financial performance, the margins improved on the back of higher operating profit, but lower revenue. I noticed that you also mentioned a couple of disposals in Spain and France. So my question is, if we look at the sort of medium-term ambition that you spoke about in last AGMs of high teens, how much of this is, you could call, organic? And how much of this is related to these disposals? And what does this mean for the trajectory going forward? Second question on the new operating segment, corporate and -- Corporate Performance & ESG. Yes, it's a new segment. It's got relatively low margins, you could say. Margins actually fell back quite a bit last year. Now you've noticed that's due to personnel costs, but also investment in products, sales and marketing. I was just wondering, can you give sort of an idea of the investment cycle, a timeline and where this could grow to in terms of margins if you look at the other segments -- a couple of other segments being 30% or higher in terms of operating margins? Then the third question is a little bit on artificial intelligence. You mentioned that around 50% of your current digital revenue is leveraged by artificial intelligence in some way. I was wondering, can you sort of quantify on your spending more money on this in terms of investments? Can you sort of quantify how much of additional revenue this actually brings in, in terms of being additional, incremental that sort of? That's it.

Okay.

That's it.

Terrific. And then, Kevin, if you want to chime in on margin. So first, in terms of Legal & Regulatory, they grew 4% in 2023. That was the -- the organic growth getting above a 2% level to 4% was the major driver of the margin improvement. The disposals in France and Spain did contribute positively on margin. But again, the bulk of the achievement was through organic growth. So the goal in the Legal & Regulatory division is to continue to drive very strong growth in digital information. We have high retentions there. That's been a product area that's been growing 6% to 8%, so very high and then to scale the software business. So the software business today in Legal & Regulatory is below the margin level that represents a scaled business, and so that will be, again, a major contributor in the future as those product lines scale. In the CP & ESG, a similar story, in that some of our products in that new division are subscale. We're continuing to drive a lot of sales and marketing to penetrate the markets. We're expanding what we're doing on the ESG front, so a lot of innovation going on. So at this point, the focus is on growth in that division. And we know that as we continue to scale, the margins will be able to get up to sort of the group average and reflect more software-like margins, but that's more on medium-term objective. And then on the AI side, before the onset of GenAI, our focus in the AI arena was really on predictive analytics, machine learning, natural language processing. Those were more the forms of AI that we invested in, and we continue to invest in. We're now investing incrementally in GenAI. It's still a bit early to say how the commercial -- what the commercial impact will be of our incremental investments in GenAI. We clearly believe it will support retention rates and drive more sales, which is our focus, but still early days in terms of fully quantifying what the impact will be.

Okay. Maybe a little bit on the Legal & Regulatory. If you look at, of course, the past, it's sort of choppy with the margin development. And sometimes, of course, there's also one-offs and disposals, et cetera. In the outlook, you also say, this is going to improve again the margin this year. Can you sort of -- I know medium term is always sort of like fake, say, marketing is sort of leaves -- let's something know about what is medium term? Is that a 3-year track, 5-year track?

Yes, maybe I'll turn it to Kevin for some more elaboration.

Yes. I will say it's not our practice to give longer-term guidance other than what we've given you in the press release back in February, but I can say what we are looking at in Legal & Regulatory is a business that is more and more digital, more and more developing in software areas. We do see Expert Solutions, in particular, being a very important investment for our organization, and those businesses tend to grow faster. And as they get mature, margins follow from that. So it is more about how we are investing in technologies, Expert Solutions. I will say that Legal & Regulatory is a very diverse business unit in that we operate in many different countries around Europe. So I don't necessarily expect that Legal & Regulatory will take on a margin similar to some of the other divisions, but I certainly do think there's room to improve.

Thank you. Anybody else? Would you like to go ahead?