Wolters Kluwer N.v. · EURONEXT:WKL
Wolters Kluwer — Morgan Stanley Technology, Media & Telecoms Conference 2008
34 slides from Wolters Kluwer's conference presentation, Nov 19, 2008
Slide 1: Morgan Stanley Technology, Media & Telecoms Conference
Morgan Stanley Technology, Media & Telecoms Conference Boudewijn Beerkens CFO and Member of the Executive Board November 19, 2008 Barcelona
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains forward-looking statements. These statements may be identified by words such as "expect", "should", "could", "shall", and similar expressions. Wolters Kluwer cautions that such forward-looking statements are qualified by certain risks and uncerta
Slide 3: Agenda
Agenda Introduction Innovation at Wolters Kluwer Trading Update Accelerating and Expanding Springboard Recent Acquisitions Summary Q&A Morgan Stanley Technology, Media & Telecoms Conference – November 19, 2008 3
Slide 4: Wolters Kluwer
Wolters Kluwer The Professional’s First Choice Provide the information, tools and solutions to help professionals make their most critical decisions effectively and improve their productivity Global information and publishing company Leading positions in core markets: health, tax, accounting, co
Slide 5: Key Divisions and Market Leading Brands
Key Divisions and Market Leading Brands HEALTH CORPORATE & FINANCIAL SERVICES (CFS) Wolters Kluwer Health is the leading global provider Wolters Kluwer Corporate & Financial Services has a of information and business intelligence for leading, comprehensive portfolio of products, healthcare professio
Slide 6: Diversified and Defensive Portfolio
Diversified and Defensive Portfolio Revenue by Geography Revenue by Type Non- Subscription North Europe Subscription America Revenue 47% Revenue 50% 67% 33% Asia Pacific 3% Morgan Stanley Technology, Media & Telecoms Conference – November 19, 2008 6
Slide 7: Deep vertical market positions and customer insight
Our success results from deep vertical market positions, strong customer insight, and value enhancing solutions Wolters Kluwer Verticals Examples Wolters Kluwer Assets Well established brands Corporate Lawyers Municipal Banks Unique market footprint HR Managers CPA Market Deep customer knowledge Phy
Slide 8: Wolters Kluwer Strategy for growth
Wolters Kluwer Strategy for growth ■ Expand product ■ Expand into adjacent customer and market 1 2 offerings segments ■ Enhance market Grow Our Capture execution ■ Extend product suite of Leading Key Adjacent productivity tools and ■ Invest in product Positions Markets services development and sales
Slide 9: Innovation at Wolters Kluwer
Innovation at Wolters Kluwer Morgan Stanley Technology, Media & Telecoms Conference – November 19, 2008 9
Slide 10: Allocating more capital to where we create the most value
Our strategy is to allocate more capital to where we can create the most value for customers Customer and Shareholder Value Progression Information, Margin / Organic Growth % Software & Services Workflow Software Commentary and Insight Primary Source Research Customer Value Morgan Stanley Technology
Slide 11: An example from our Tax and Accounting business
...an example from our Tax and Accounting business Online & Workflow Tools Revenue as a % Percentage of New Sales Revenues of Total (ProSystem Software) by Source (Tax Example) 97% 98% 99% 7% 13% 95% 15% 87% 93% 87% 85% Tax Only +1 Module +2 Modules +3 Modules +4 Modules 2003 2004 2005 ProSystem Tax
Slide 12: Increased investments in new and enhanced products
Increased investments in new and enhanced products have supported our growth and transformation Key New Products Increased Investment Health ■ Order Sets Average: 8-10% of Revenue ■ OvidSP ■ Point of Learning TAL ■ Document ■ Engagement ■ Australian & Canadian Software Suites ■ Bar Review 14% CFS CA
Slide 13: Portfolio evolution to information, software and service provider
Our portfolio today reflects this evolution to an information, software and service provider… 2007 Revenue Online & Workflow Tools Revenue as a % of Total €3.4 Billion 38% 47% 46% 47% Print Online/ 42% 38% Workflow Tools 31% 15% Services 2003 2004 2005 2006 2007 Morgan Stanley Technology, Media & Te
Slide 14: Improving revenue growth, profitability and shareholder value
… and will improve revenue growth, profitability and shareholder value Information Centric Information/Software Blend Software/Services < 10% Software 10-40% Software > 40% Software Margin 16-18% Margin 18-22% Margin 22-30% + Retention rate 80-85% Retention rate 85-90% Retention rate 85-90% + Indexe
Slide 15: Health: Point of Care
15 Health: Point of Care MD and RN Review Ensure procedure is properly documented and coded (ProVation) Surgical Encounter Hospital Administration Arthroscopic image capture Produce Bill for Reimbursement Real time procedure documentation Unplanned secondary procedure documentation Real time billing
Slide 16: Corporate & Financial Services: Personal Lending
16 Corporate & Financial Services: Personal Lending Delivery management Electronic signature Produce, assemble, and Print fulfillment package compliant Document archival documents Forms Library Policies and Rules Secure electronic Database delivery Borrower application Track receipt Verifiable audit
Slide 17: Legal, Tax & Regulatory Europe: Establishing a New Company
17 Legal, Tax & Regulatory Europe: Establishing a New Company 3. Analyze relevant legal 5. Request VAT number sources Link with software tool that Conduct search across all manages official forms and relevant research databases transmit it to the government (Centric) tax office (B.Point) 4. Set up s
Slide 18: Customer insight framework drives innovation
Wolters Kluwer’s customer insight framework drives innovation ■ Represents the center-piece of the CI Program and CI recommendations ■ Adoption of the CI Program model across Wolters Kluwer ■ This program is unique to our products, culture, and expertise ■ Represents Wolters Kluwer’s best practices
Slide 19: Impact: profitable growth from strong vertical positions
19 Impact: profitable growth resulting from strong vertical positions with increasingly attractive economics Increase Deeper Relationship Retention with Customers Strengthen Higher Vertical Position Switching Costs ® Investment in Product Greater Share of Enhancements/Expansion Customer Spending Mor
Slide 20: Trading Update
20 Trading Update Morgan Stanley Technology, Media & Telecoms Conference – November 19, 2008 20
Slide 21: Trading Update: maintaining profitability
Trading Update: maintaining profitability Core Subscription lines continue to deliver solid growth Deteriorating market conditions impacting non subscription product lines Reiterating guidance for EPS (€1.52-€1.57), EBITA Margin 20%, Free Cash Flow (± €400 million) Full Year Organic Growth g
Slide 22: Updated 2008 Outlook
Updated 2008 Outlook Actual Actual Actual Actual Actual Target Key Performance Indicators 2003 2004 2005 2006 2007 2008 Organic Revenue Growth -2% 1% 2% 3% 4% Positive Ordinary EBITA Margin 18% 16% 16% 17% 20% 20% Free Cash Flow €393m €456m €351m €399m €405m ±€400m1 ROIC (after tax) 7% 7% 7% 7% 8% 8
Slide 23: Springboard Expansion and Acceleration savings and costs
Springboard Expansion and Acceleration summary savings and costs Program Statistics € million (pre tax) 2008 2009 2010 2011 Total Cost Savings 10 50 100 120 280 Exceptional 40 55 50 35 180 Program Cost Accelerating Springboard Improving Wolters Kluwer’s Operations Driving Wolters Kluwer’s Long Term
Slide 24: Streamlining and modernizing initiatives have grown
Since Springboard’s announcement, the number of streamlining and modernizing initiatives has grown… Rationalize non standard and fragment IT Infrastructure, saving 8-12% of current IT spend MGTP + ERP: TAL, Germany, France. Order Management: Health Revised Content Re-engineer and standardize con
Slide 25: Health Portfolio Changes
Health Portfolio Changes Focus on higher subscription and growth businesses Streamlining and off-shoring of production functions Optimizing channel management within the books product line Considering to discontinue or divest low margin and non-strategic practice areas Acceleration of migrat
Slide 26: Recent Acquisitions
Recent Acquisitions Growing our leading positions UpToDate ― Leading evidence-based electronic clinical information resource ― Strengthen WK Health’s portfolio in the growing point of care and electronic medical record markets Addison ― Leading provider of software solutions for the German tax m
Slide 27: Solid Financial Position
Solid Financial Position Net Debt/ EBITDA Free Cash Flow (€ million) 2.9 407 399 405 ±400 2.6 2.5 2.5 311 2.4 2004 2005 2006 2007 2008 HY 2004 2005 2006 2007 2008 2008 Guidance at constant currencies EUR/ USD 1.37 Guidance Net Debt (€ million) Debt Maturity Profile (€ million) 1,777 2,050 1,793 1,84
Slide 28: Summary
Summary Diversified and defensive portfolio 67% of revenue is non-cyclical, high recurring revenue Strong electronic revenue growth both online and in software Improving retention rates Strong balance sheet and cash flows Solid foundation for the future Morgan Stanley Technology, Media &
Slide 29: Appendix
29 Appendix Morgan Stanley Technology, Media & Telecoms Conference – November 19, 2008 29
Slide 30: Revenue growth in core subscription base and electronic products
Revenue growth in core subscription base and higher margin electronic products Revenue: Six Months Ended June 2008 - €1,608 million Half Year Millions 2008 2007 ∆ CC ∆ OG Health 305 354 (2%) (2%) Legal, Tax Health & €305 CFS 236 268 1% 0% Regulatory Corporate TAL 429 451 8% 3% Europe & Financial €63
Slide 31: Health Highlights
Clinical Solutions 9% Pharma Health Highlights Solutions 32% Professional & Education 37% Medical Research 22% Medical Research: Strong growth driven by Ovid subscription renewals and new products Half Year Clinical Solutions: Good growth driven by new sales of ProVation Medical and Medi-Span Mi
Slide 32: CFS Highlights
Financial CFS Highlights Services Corporate 34% Legal Services 66% Corporate Legal Services: Good results in representation Half Year Lower volumes in transactions Millions 2008 2007 ∆ CC ∆ OG Financial Services: Revenue (EUR) 236 268 1% 0% Solid growth in analytics, fraud, securities and Reve
Slide 33: TAL Highlights
TAL Highlights Law & Business 36% Tax and Accounting 64% Tax and Accounting: Strong new software sales and improved retention Double-digit growth at Small Firm Services, Half Year contributed by all business lines Millions 2008 2007 ∆ CC ∆ OG Good growth in Canada and Asia Pacific Revenue (EUR
Slide 34: LTRE Highlights
BEL SC FR 9% 3% 17% LTRE Highlights NL 17% IT/SP TLR 28% 6% GER/CEE 20% Double-digit organic revenue growth of electronic products drives these products to 46% of total revenue (2007: 43%) Improving retention rates and new sales Half Year efforts Millions 2008 2007 ∆ CC ∆ OG Strong growth cont
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