John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Q4 2015 Earnings Presentation
19 slides from John Wiley & Sons's earnings presentation, Jun 16, 2015
Slide 1: Fourth Quarter and Fiscal Year 2015 Earnings Report
Fourth Quarter and Fiscal Year 2015 Earnings Report June 16, 2015
Slide 2: About Wiley and Safe Harbor Statement
About Wiley Wiley is a global provider of knowledge and knowledge‐enabled services that improve outcomes in areas of research, professional practice and education. Through its Research segment, the Company provides digital and print scientific, technical, medical, and scholarly journals, reference w
Slide 3: Fiscal Year Highlights
Fiscal Year Highlights • Revenue and Adjusted EPS guidance achieved — 4% revenue growth on constant currency basis — EPS of $3.26, up $0.21 (+10%) including adverse FX impact of $0.11 • Strong revenue growth for journals (Research Communication +4%) – steady subscription growth along with strong fun
Slide 4: Fiscal Year Performance Summary
Fiscal Year Performance Summary (millions) FY 2015 FY 2014 Change Change (ex‐FX) Revenue $1,822.4 $1,775.2 3% 4% Adjusted Operating Income* $266.5 $254.2 15% 9% Operating Margin 14.6% 14.3% Adjusted EPS* $3.26 $3.05 10% 10% • Revenue growth in Research journals (+4%) and Education and Professional D
Slide 5: Fourth Quarter Performance Summary
Fourth Quarter Performance Summary (millions) FY 2015 FY 2014 Change Change (ex‐FX) Revenue $441.6 $457.1 (3%) 2% Adjusted Operating Income* $63.0 $62.9 22% 11% Operating Margin 14.3% 13.8% Adjusted EPS* $0.81 $0.77 32% 17% • Revenue growth in Education and Professional Development solutions and Oth
Slide 6: Research
Research (millions) FY 2015 FY 2014 % of Revenue Change (ex‐FX) Journal Subscriptions $664.5 $667.3 64% 1% Funded Access $22.4 $17.7 2% 29% Other Journal Revenue $126.9 $113.9 12% 15% Total Research Communication $813.8 $798.9 78% 4% Print Books $101.9 $114.1 10% (9%) Digital Books $45.6 $47.7 4% (2
Slide 7: Professional Development
Professional Development (millions) FY 2015 FY 2014 % of Revenue Change (ex‐FX) Print Books $209.5 $232.0 51% (9%) Digital Books $49.8 $53.8 12% (7%) Online Test Preparation and Certification $18.6 $15.2 5% 22% Other Knowledge Services $30.4 $29.9 7% 2% Total Knowledge Services $308.2 $330.8 76% (6%
Slide 8: Education
Education (millions) FY 2015 FY 2014 % of Revenue Change (ex‐FX) Print Textbooks $144.4 $163.2 39% (9%) Digital Books $34.0 $30.1 9% 15% Total Books $178.5 $193.3 48% (6%) Custom Products $50.6 $43.6 14% 16% Course Workflow Solutions (WileyPLUS) $54.2 $49.5 14% 11% Education Services (Deltak) $81.6
Slide 9: Adjusted Shared Services Costs
Adjusted Shared Services Costs (millions spent) FY 2015* FY 2014* Change (ex‐FX) Distribution and Operation Services $88.2 $99.4 (10%) Technology and Content Management $246.3 $241.3 2% Finance $53.0 $54.5 (1%) Other Administration $106.3 $101.5 6% Total $493.8 $496.7 0% • Distribution and Operation
Slide 10: Balance Sheet
Balance Sheet Balance Sheet (millions) As of 4/30/15 As of 4/30/14 Cash and Cash Equivalents $457.4 $486.4 Short Term Debt $100.0 $0 Long Term Debt $650.1 $700.1 Net Debt $292.7 $213.7 Net Debt to EBITDA (ttm) 0.7x 0.5x • Significant leverage capacity to add strategic acquisitions • Areas of acquisi
Slide 11: Cash Flow
Cash Flow • Free Cash Flow Cash Flow (millions) FY 2015 FY 2014 performance vs. earnings Net Income $176.9 $160.5 impacted by higher capital investment in technology Cash From Operations $355.1 $348.2 and higher restructuring Composition Spending $39.4 $40.6 payments • Balanced approach to cash Cape
Slide 12: Outlook
Outlook WILEY
Slide 13: FY16 Outlook
FY16 Outlook • Wiley’s mission is to deliver the skills and knowledge researchers, professionals and students need to be successful — High‐growth market for education‐to‐employment solutions — Acquisitions important to accelerate growth and scale — Content and capabilities to create lasting competit
Slide 14: FY16 Revenue Outlook
FY16 Revenue Outlook • Low‐single digit revenue growth expected excluding unfavorable impacts from: — Foreign exchange movement — Previously announced timing shift in journals • Steady, low‐single digit growth in journals excluding timing shift ($35M from FY16 into FY17) • Solutions growing at doubl
Slide 15: FY16 Earnings Outlook
FY16 Earnings Outlook • Flat EPS expected excluding foreign exchange and timing shift in journals ($0.35/share into FY17). Anticipated earnings improvement from revenue growth and cost savings offset by incremental investment in ERP and related systems (more than $0.15/share) — Continued revenue and
Slide 16: FY16 Cash Flow
FY16 Cash Flow Cash from Operations expected to be in line with FY15 • Steady business performance to continue, including modest journal revenue and profit growth • No cash impact from time‐based journal revenue and earnings shift Free Cash Flow lower than FY15 due to near‐term investments (capex ap
Slide 17: Beyond FY16
Beyond FY16 • Revenue, EPS and operating margin growth expected to accelerate beyond FY16 • Achievement of specific FY17 goals delayed — Book performance more unfavorable than expected — No new solutions acquisitions made since May 2014 — Significant investment in ERP and related systems • High conf
Slide 18: Summary
Summary FY15 Results • Earnings guidance achieved despite significant currency headwind ($0.11/share) • Solid growth in consolidated revenue (+4%) and EPS (+10%) • Journals and solutions businesses performed well • Book revenue more unfavorable than expected FY16 Outlook • Revenue guidance for low‐s
Slide 19: Fourth Quarter and Fiscal Year 2015 Earnings Report
Fourth Quarter and Fiscal Year 2015 Earnings Report June 16, 2015