John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Q4 2017 Earnings Presentation
17 slides from John Wiley & Sons's earnings presentation, Jun 13, 2017
Slide 1: Fourth Quarter and Fiscal 2017 Earnings Report
Fourth Quarter and Fiscal 2017 Earnings Report June 13, 2017
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statem
Slide 3: Introduction
Introduction Matthew Kissner Interim CEO and Chairman of the Board • Fourteen year veteran of Wiley Board of Directors (Chairman since 2015) • Former Chair, Executive, Governance, Audit, and Compensation Committees • Former Pitney Bowes EVP, Group President • Leadership positions at Banker’s Trust,
Slide 4: Fiscal Year Summary
Fiscal Year Summary • Revenue decline of 1% excluding impact of foreign exchange, subscription shift, and acquisitions. Steady Research performance and double-digit growth in Solutions offset by a 7% decline in Publishing (market weakness in print books) • Adjusted EPS growth of 1% excluding impact
Slide 5: Fiscal Year Performance Summary
Fiscal Year Performance Summary (millions) FY 2017 FY 2016 Change Change (ex-FX) Revenue $1,718.5 $1,727.0 0% 2% Adjusted Operating Income* $228.4 $216.7 5% 7% Adjusted Operating Margin 13.3% 12.5% Adjusted EPS* $3.00 $2.70 11% 13% • Above includes transitional impact of shift to time-based subscrip
Slide 6: Fourth Quarter Performance Summary
Fourth Quarter Performance Summary (millions) Q4 2017 Q4 2016 Change Change (ex-FX) Revenue $452.2 $434.3 4% 6% Adjusted Operating Income* $61.7 $51.1 21% 16% Adjusted Operating Margin 13.7% 11.8% Adjusted EPS* $0.82 $0.67 22% 19% • Above includes impact from acquisitions (+$9 million revenue and -$
Slide 7: Research
Research (millions) FY 2017 FY 2016 % of Revenue Change (ex-FX) Journal Subscriptions $639.7 $622.3 75% 6% Author-Funded Access $30.6 $25.7 4% 26% Licensing, Reprints, Backfiles, Other $164.1 $178.8 19% (3%) Total Journal Revenue $834.4 $826.8 98% 4% Platform Services (Atypon) $19.1 2% TOTAL REVENUE
Slide 8: Publishing
Publishing (millions) FY 2017 FY 2016 % Revenue Change (ex-FX) STM and Professional Books $291.3 $331.0 46% (9%) Education Books $196.3 $230.0 31% (13%) Total Books and References $487.6 $561.0 77% (11%) Course Workflow (WileyPLUS) $62.3 $58.5 10% 7% Online Test Preparation and Certification $35.6 $
Slide 9: Solutions
Solutions (millions) FY 2017 FY 2016 % of Revenue Change (ex-FX) Online Program Management $111.6 $96.5 48% 16% Professional Assessment $59.9 $57.4 26% 5% Corporate Learning $60.1 $50.7 26% 20% TOTAL REVENUE $231.6 $204.5 100% 14% ADJ. CONTRIBUTION TO PROFIT (CTP)* $16.6 $5.0 224% • Online Program M
Slide 10: Adjusted Shared Services Costs
Adjusted Shared Services Costs (millions spent) FY 2017* FY 2016* Change (ex-FX) Distribution and Operation Services $75.8 $80.0 (1%) Technology and Content Management $266.8 $258.6 5% Finance $47.0 $46.8 3% Other Administration $117.7 $131.8 (9%) Total $507.3 $517.2 0% • Distribution and Operation
Slide 11: Balance Sheet
Balance Sheet Balance Sheet (millions) As of 4/30/17 As of 4/30/16 Cash and Cash Equivalents $58.5 $363.8 Long Term Debt $365.0 $605.0 Net Debt $306.5 $241.2 Net Debt to adjusted EBITDA (ttm) 0.8 0.7 • Strong balance sheet continues to provide flexibility for investment and return of capital (over $
Slide 12: Cash Flow
Cash Flow • Cash from Operations down (-$35M) primarily a result of unfavorable Cash Flow (millions) FY 2017 FY 2016 impact of timing around working capital (net income decline mostly Net Income $113.6 $145.8 non-cash - German tax settlement, Cash From Operations $314.5 $350.0 etc) and an unbudgeted
Slide 13: Investing for Growth and Operational Excellence
Investing for Growth and Operational Excellence 1. Investing in Research to improve revenue growth above 1-2% (higher article output; more share in China/India; new professional services for academic societies, researchers, etc) 2. Investing in Solutions businesses for profitable growth, increased s
Slide 14: FY18 Outlook
FY18 Outlook Potential FX Benefit Metric ($M) FY17 Actual FY18 Expectation* (at current rates) Revenue $1,718.5 Approximately even $25 million Adj. Operating Income $228.4 Approximately even $20 million Adj. EPS $3.00 Low-single digit % decline $0.25 Cash from Operations $314.5 $350 million or highe
Slide 15: Looking Beyond FY18
Looking Beyond FY18 • Reinvestment in Research expected to accelerate revenue growth • Solutions segment, already EBITDA positive, to turn EPS accretive on continued revenue growth and efficiency gains • Publishing segment to improve digital capabilities for content creation and alternative delivery
Slide 16: Summary
Summary • FY17 earnings performance better than expected; strong momentum in digital transformation (now approaching 70% of our revenue) • Steady FY18 outlook with positive performance in Research and strong growth in Solutions offset by Publishing declines; earnings growth adversely impacted by maj
Slide 17: Fourth Quarter and Fiscal 2017 Earnings Report
Fourth Quarter and Fiscal 2017 Earnings Report June 13, 2017