John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Q3 2019 Earnings Presentation
16 slides from John Wiley & Sons's earnings presentation, Mar 5, 2019
Slide 1: Third Quarter 2019 Earnings Report
Third Quarter 2019 Earnings Report March 5, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain forward-looking statements concerning the Company’s Fiscal Year 2019 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: Executive Summary
EXECUTIVE SUMMARY WILEY
Slide 4: Empowering our customers in an ever-changing knowledge economy
Empowering our customers in an ever-changing knowledge economy Universities Research Publishing and Platforms Drive discovery, usage and impact of scholarly research Wiley Network Education and Professional Publishing 6,000+ content institutions Drive personal and professional 10,000+ research insti
Slide 5: Our approach is constant
Our approach is constant Lead our markets and innovate relentlessly Lead in high-stakes subjects, disciplines, and careers Be the strategic partner of choice Enhance the price-value proposition Leverage our global footprint Continually improve, tighten, and simplify 5
Slide 6: Third Quarter Summary
Third Quarter Summary Favorable Unfavorable Favorable underlying growth throughout, except in Quarterly drop off in book publishing reflecting book publishing market challenges and legacy issues Ground-breaking Research partnership signed in Cash from Operations running behind prior Germany; first-t
Slide 7: Groundbreaking Research Partnership
Groundbreaking Research Partnership • Mixed publishing model partnership with German consortium of 700 research institutions (Projekt DEAL) • Three year deal at ~$30 million per year to start with the potential for growth through increased publishing volume • Market-based pricing provides for both s
Slide 8: Performance
PERFORMANCE WILEY
Slide 9: Third Quarter Performance
Third Quarter Performance GAAP Q3 2019 Q3 2018 Change Change CC Revenue $449.4 $455.7 (1%) 1% Operating Income $50.3 $65.4 (23%) Operating Margin 11.2% 14.4% Diluted EPS $0.61 $1.19 Non-GAAP Q3 2019 Q3 2018 Change Change CC Adjusted Operating Income $50.0 $67.6 (21%) Adjusted Operating Margin 11.1%
Slide 10: YTD Performance
YTD Performance GAAP YTD 2019 YTD 2018 Change Change CC Revenue $1,308.9 $1318.9 (1%) 1% Operating Income $144.0 $158.8 (9%) Operating Margin 11.0% 12.0% Diluted EPS $1.81 $2.39 (24%) Non-GAAP YTD 2019 YTD 2018 Change Change CC Adjusted Operating Income $147.5 $188.9 (18%) Adjusted Operating Margin
Slide 11: Research
Research (millions) Q3 2019 Q3 2018 Change Change CC Journal Subscriptions $152.3 $160.3 (5%) (1%) Open Access $14.2 $9.9 43% 48% Licensing, Reprints, Backfiles, Other $50.8 $45.0 13% 16% Total Journal Revenue $217.3 $215.2 1% 4% Publishing Technology Services (Atypon) $9.1 $8.3 10% 10% TOTAL REVENU
Slide 12: Publishing
Publishing (millions) Q3 2019 Q3 2018 Change Change CC STM and Professional Publishing $64.6 $80.8 (20%) (18%) Education Publishing $37.4 $48.4 (23%) (21%) Course Workflow (WileyPLUS) $22.9 $21.4 7% 8% Test Preparation and Certification $9.6 $7.8 23% 24% Licensing, Distribution, Advertising, Other $
Slide 13: Solutions
Solutions (millions) Q3 2019 Q3 2018 Change Change CC Education Services $46.2 $32.2 43% 43% Professional Assessment $14.6 $13.2 10% 10% Corporate Learning $16.6 $16.5 1% 5% TOTAL REVENUE $77.4 $61.9 25% 26% CONTRIBUTION TO PROFIT (CTP) ($3.4) $6.4 Restructuring charges (credits) $0.1 $1.3 ADJUSTED
Slide 14: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Balance Sheet (millions) As of 1/31/19 As of 1/31/18 Long Term Debt $633.5 $428.2 Net Debt $500.8 $300.0 Net-Debt-to-EBITDA* 1.3 0.8 Cash Flow Measures (millions) YTD 2019 YTD 2018 Net Cash Provided by Operating Activities (GAAP) $47.6 $190.7 Additions to Technology, Prop
Slide 15: Fiscal 2019 Outlook
Fiscal 2019 Outlook Metric ($M, except EPS) FY18 Actual FY19 Expectation Status Constant Currency Revenue $1,796.1 Even with prior year Reaffirmed Adj. EPS $3.43 Mid-single digit % decline Reaffirmed Cash Provided by Op. Activities $381.8 Mid-teen % decline Lowered* Capital Expenditures $150.7 Lower
Slide 16: Summary
Summary Favorable momentum throughout business but a difficult quarter for traditional book publishing New innovative publishing model in Germany; winning first-to-market favor worldwide Significant momentum in Education Services; integration of acquisition on schedule Company-wide business optimiza