John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Q3 2020 Earnings Presentation
22 slides from John Wiley & Sons's earnings presentation, Mar 4, 2020
Slide 1: Third Quarter 2020 Earnings Review
Third Quarter 2020 Earnings Review March 4, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain forward-looking statements concerning the Company’s Fiscal Year 2020 Outlook, operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in
Slide 3: Business Review
Business Review Brian Napack, President and CEO
Slide 4: Meeting the ever-increasing demands of the knowledge economy
Meeting the ever-increasing demands of the knowledge economy WILEY RESEARCH WILEY EDUCATION Publishing and platforms Content, courseware and services • Advancing science, technology, and medicine • Helping people achieve their career goals • Ensuring integrity and global discoverability • Closing th
Slide 5: Third Quarter Key Takeaways
Third Quarter Key Takeaways Revenue GAAP EPS Adj. EPS Adj. EBITDA +4%* +3% +10%* +7%* $467M $0.63 $0.68 $95M • Continued revenue growth and profit improvement in Research and Education Services • Easing of downward revenue pressure in book publishing with marginal organic growth in higher education
Slide 6: Research Publishing & Platforms
Research Publishing & Platforms Solid growth in revenue and EBITDA continuing • Revenue growth primarily driven by publishing volume gains, per our strategy Revenue +3% • Strong double-digit growth in Open Access growth; Platforms up 12% $234M • Comprehensive research publishing deals recently signe
Slide 7: New publishing models support healthy research ecosystem
New publishing models support healthy research ecosystem Open Access Comprehensive Pay-to-Publish Read-and-Publish % of YTD Research Publishing 7% 5% Revenue* Customers Funders and Authors Library Consortia Geography Global Europe *Vast majority of revenue is generated by subscription publishing mod
Slide 8: Academic & Professional Learning
Academic & Professional Learning Third quarter improvement balanced against challenging first half performance • Revenue increase due to contribution from zyBooks and Knewton Revenue +2% • Organic revenue decline of 2% overall; marginal organic growth in Higher $178M Education • CrossKnowledge signs
Slide 9: Spotlight on Higher Ed Publishing Market
Spotlight on Higher Ed Publishing Market Transformation continues with migration to high-impact courseware and affordable solutions Market Trend Wiley Answer Content Curated, high-quality content remains Focus and leverage leadership position in the dominant customer preference high-growth career ar
Slide 10: Education Services
Education Services Strong revenue growth and EBITDA improvement continuing • Education Services organic growth of 10% from higher enrollments, new Revenue programs, and strong interest in ‘a la carte’ OPM services that meet specific needs +19% $55M • Three new university partner signings in the quar
Slide 11: Delivering job ready tech talent for leading global companies
Delivering job ready tech talent for leading global companies Snapshot Leading Global Clients • Recruits, trains, and deploys tech talent under multi-year contract with leading institutions • Sources recent university graduates with STEM and business degrees with high potential • Large unmet demand
Slide 12: Wiley's Tech Bridge Focused on Closing the Skills Gap
Wiley’s Tech Bridge Focused on Closing the Skills Gap C A R E E R P R E P A R AT I O N Find, train, deploy University Corporate Partner Partner UNIVERSITY C O R P O R AT E SERVICES TRAINING Deliver degrees and certificates Onboard, upskill, reskill THE SKILLS GAP 12
Slide 13: Financial Review
Financial Review John Kritzmacher, Executive Vice President and CFO
Slide 14: Third Quarter 2020 Summary
Third Quarter 2020 Summary $467 $0.63 $0.68 $96 $449 $0.61 $0.61 $90 Q3’19 Q3’20 Q3’20 Q3’20 Q3’19 Q3’20 Q3’19 Q3’19 Revenue GAAP EPS Adjusted EPS Adjusted EBITDA +4%* +3% +10%* +7%* Revenue at constant currency Includes $0.04 of and excluding impact of unfavorable variance acquisitions was +2%. imp
Slide 15: Year-to-Date 2020 Summary
Year-to-Date 2020 Summary $1,309 $1,357 $1.81 $1.92 $1.74 $267 $263 $1.48 YTD’19 YTD’20 YTD’19 YTD’20 YTD’19 YTD’20 YTD’19 YTD’20 Revenue GAAP EPS Adjusted EPS Adjusted EBITDA +5%* -19% -9%* -1%* Revenue at constant currency Includes $0.19 of and excluding impact of unfavorable variance acquisitions
Slide 16: Free Cash Flow and Return to Shareholders
Free Cash Flow and Return to Shareholders Free Cash Flow • YTD Cash from Operations improvement of YTD’19 YTD’20 Change +$37M, Free Cash Flow +$22M. Note, majority of cash flow is generated in Q4 due to timing of ($17M) +$5M +$22M research journal subscription collections. • Modest leverage and stro
Slide 17: EPS Outlook Raised; Revenue, EBITDA, FCF Reaffirmed
EPS Outlook Raised; Revenue, EBITDA, FCF Reaffirmed FY19 Actual FY20 Outlook FX Impact mthree Impact Q3 Update* (Incl. FX and mthree) Revenue $1.80B $1.855B-$1.885B ($17M) +$20M Reaffirmed Adjusted EBITDA $388M $357-$372M ($5M) ($2M) Reaffirmed Adjusted EPS $2.96 $2.35-$2.45 ($0.06) ($0.07) Raised,
Slide 18: Summary
Summary • Continued revenue growth and profit improvement in Research and Education Services • Easing of downward revenue pressure in book publishing with marginal organic growth in higher education business vs. year-ago quarter • Acquisition of mthree enhances Education Services segment by filling
Slide 19: Thank you for joining us
Thank you for joining us All investor material available on website at https://www.wiley.com/en-us/investors Contact for follow-up: brian.campbell@wiley.com 201.748.6874 19
Slide 20: Appendix
APPENDIX WILEY
Slide 21: Reconciliation of GAAP EPS to Non-GAAP Adjusted EPS
21 Appendix JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF GAAP EPS to NON-GAAP ADJUSTED EPS - DILUTED (unaudited) Three Months Ended Nine Months Ended January 31, January 31, 2020 2019 2020 2019 GAAP Earnings Per Share - Diluted $ 063 = $ 0.61 $ 148 $ 1.81 Adjustments: Rest
Slide 22: Reconciliation of GAAP Net Income to Non-GAAP EBITDA
22 Appendix JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF GAAP NET INCOME to NON-GAAP EBITDA AND ADJUSTED EBITDA (unaudited) Three Months Ended Nine Months Ended January 31, January 31, 2020 2019 2020 2019 Net Income $ 35,443 $ 34,942 $ 83,757 $ 105,021 Interest expense 6,3