They write in their release . Please find enclosed an update on Wolters Kluwer. We have downgraded the
stock to Neutral arguing that......

Top line guidance at risk
Following a recent management roadshow, we believe Wolters Kluwer's 4% organic revenue growth guidance for 2008 is at risk. In our view, management's tone has not been as downbeat since 2003. Cyclical pressure in CFS (Corporate and Financial Services), and structural issues in Health, are likely to depress revenue growth. We have cut our 2008e organic revenue growth forecast to 2.7% from 4% previously.

CFS and Health under pressure
Transaction volumes in CFS are below expectations. Revenue growth is coming under pressure from the decline in company creations and the filing of liens while the downturn in mortgage issuance continues to weigh on FS revenue growth in the US. Medical advertising is deteriorating further while adjustments in the inventory of book wholesalers are likely to drive a decline in Health's largest sub-segment until 2009.

Wage inflation could become an issue
We believe the company is facing wage inflation of 3.5% to 5% in its different countries versus 2.5% to 3% in recent years. Personnel costs account for an estimated 50% of total costs and, with increasing inflation, management needs additional cost-cutting efforts to offset a weaker top line to deliver its 20% margin target for 2008.

Downgrade to Neutral, target price cut to EUR18.5
We have revised our EPS for 2008e and 2009e down by 6% and 10% respectively and downgraded the stock to Neutral with a revised target price of EUR18.5 (from EUR21.0). Wolters Kluwer remains cheap with a FCF yield of 7.6% for 2008e, but deteriorating fundamentals suggest an Outperform stance is no longer warranted.