Reed Elsevier NV — Investor Day (December 2011)
45 slides from Reed Elsevier NV's investor day presentation, Dec 6, 2011
Slide 1: Reed Elsevier investor seminar: Elsevier Science & Technology and the research industry
Reed Elsevier investor seminar Elsevier Science & Technology and the research industry December 6, 2011 London This presentation contains forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 19
Slide 2: Elsevier's position within Reed Elsevier
Elsevier’s position within Reed Elsevier Revenue Adjusted operating profit £6,055m £1,555m Business Business Information Information 12% Exhibitions 6% Science & 10% Exhibitions Medical 11% 34% Legal & Science & Professional Medical 15% 46% Legal & Professional 28% Risk Solutions Risk Solutions 15%
Slide 3: Reed Elsevier format transition
Reed Elsevier format transition Revenue by format 27% 25% 23% 37% 33% 58% 56% 52% 51% 64% 64% 60% 14% 13% 14% 15% 17% 13% 12% 12% 12% 12% 61% 64% 14% 14% 59% 48% 50% 30% 32% 35% 37% 22% 22% 28% 8% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1 Electronic Face to face Print 5 Latest E
Slide 4: Agenda
Agenda Introduction Erik Engstrom, CEO Reed Elsevier Elsevier overview YS Chi, Chairman Elsevier The world of research Nick Fowler,, Director of Strategy gy Elsevier Elsevier Science & Technology Ron Mobed, CEO S&T Q&A Ron Mobed, CEO S&T World-class content Martin Tanke, MD S&T Journals Outcome enha
Slide 5: Elsevier: Global leader in science and health information
Elsevier: Global leader in science and health information • Science Technology & Medical division of Reed Elsevier • Founded >130 years ago • Revenues: R £2 0b (2010) £2.0bn • Customers in >180 countries • Serving >30 million scientists, students, health and information professionals • 14,500 FTEs:
Slide 6: Elsevier's mission and strategic priorities
Elsevier’s mission Health Sciences “Help customers advance science and improve healthcare, by providing world-class information and innovative solutions that enable customers to make critical decisions, enhance productivity and improve outcomes.” 11 Elsevier’s strategic priorities 1. Build world-cla
Slide 7: Customers served by Elsevier
Customers served by Elsevier Our Customers Outcomes they are trying to achieve Elsevier solutions • Digest new research, publish quickly and advance Researchers science • Achieve high impact, progress career, secure funding • Attract and retain best researchers, faculty and Academic students, compet
Slide 8: Research: most significant component of Elsevier revenues
Research: most significant component of Elsevier revenues and c.100% of S&T Elsevier revenues £2.0bn (2010) Reference Databases 6%5% S&T 50% Health Sciences 39% Research R h journals 15 Agenda Introduction Erik Engstrom, CEO Reed Elsevier Elsevier overview YS Chi, Chairman Elsevier The world of rese
Slide 9: Research is pivotal to economic growth
Research is pivotal to economic growth and addressing societal challenges “ Science is not a luxury which is the preserve of developed countries... Technology and innovation are key to achieving long-term economic and social development p Science and innovation are recognised the world over as cruci
Slide 10: Governments protecting R&D funding
R&D spending as % of GDP has been relatively stable in developed markets, and is increasing in developing ones GERD as % of GDP – Developed Markets 3.0 2.5 2.0 Gross Expenditure p on R&D ((GERD)) as % of GDP - Total 1.5 1.0 3.0 0.5 2.5 0.0 2.0 2000 2002 2004 2006 2008 2010 1.5 GERD as % of GDP – Dev
Slide 11: Growth in R&D spending drives researchers and research activity
Growth in R&D spending drives number of researchers and research activity Number of researchers – OECD countries Number of research articles published Indexed values; 100 = Number of researchers in 1981 Indexed values; 100 = Number of articles in 1981 350 350 300 300 250 250 200 200 Annual growth: +
Slide 12: R&D is funded and performed by governments, academia and business
R&D is funded and performed by governmental, academic, charitable and corporate institutions R&D by source Government Academic/ Other e.g., charitable Business of funding (28%) Higher Education institution (4%) Enterprise (66%) ((2%)) Total Gross Expenditure on R&D $1.2 trillion (2010) Government R&
Slide 13: Research information is critical to research
Research information is critical to research Research information... • Is necessary to conduct research – “If I have seen further, it is only by standing on the shoulders of giants” Sir Isaac Newton, 1676 • Gets better research results – Increases quality: accurate, definitive, best-practices – Incr
Slide 14: Four trends increase the value of research information
Four trends continue to increase the value of research information 1. Inter- disciplinarity 4. Data Science is becoming 2. Collabor intensity more global -ation and more complex & Mobility 3. Emerging Markets 27 1. Research is increasingly interdisciplinary UK Research Strengths (2010) Interdiscipli
Slide 15: Collaboration and emerging markets in research
2. Research is increasingly internationally collaborative Percentage of internationally co-authored articles increased from 26% in 1996 to 36% in 2008 “Collaboration enhances the quality of research research, improves its efficiency and effectiveness, and is increasingly necessary as the scale of bu
Slide 16: Data-intensive research and dissemination models
4. Research is increasingly data intensive Very high importance, very high satisfaction • Drives demand to host, Ease of access (Easy or Fairly Easyy) store, curate and link to data sets – Subject-specific – Across disciplines High importance importance, low satisfaction Importance of access Source:
Slide 17: The world of research
The world of research • Research is a large and growing industry – Real annual growth in R&D spending: +4% – Annual growth in number of researchers: +4% – Growth in articles published: +3 +3-4% 4% • Research information is essential to improve research outcomes and efficiency – Necessary to conduct
Slide 18: Elsevier Science & Technology and revenue by product
Elsevier Science & Technology Market leading information “Improve research solutions, combining outcomes and productivity • World class content • Analytics and tools for researchers and their managers” 35 S&T revenue by product Reference (10%) Databases (12%) Research journals (78%) Elsevier S&T 201
Slide 19: Our information solutions: S&T journals, databases and reference
Our information solutions – S&T journals Largest share of S&T journal articles ~1,200 journals covering all major scientific disciplines Pharmacology & Toxicology Other Elsevier S&T Earth Sci. Materials Sci Neuroscience & Engineering Environmental Sci Others Biological Sci Sci. Springer Social Sci.
Slide 20: Our customers and S&T growth drivers
Our customers We serve research at all levels • Science strategy and policy Policy insights makers Research • Performance, planning and managers funding tools and analytics • World-class information solutions Researchers embedded in daily workflow 39 S&T growth drivers 1. Volume growth in research 2
Slide 21: Growth drivers 1 and 2: research volume and content utility
Growth driver 1: volume growth in research Growth in journal articles published (Elsevier S&T) • Growth in S&T article +4% 4% 250,000 volume in line with global volume growth 200,000 • Growth in article 150,000 submissions substantially higher (+10%) 100,000 • High volume high quality provider 50 00
Slide 22: Growth drivers 3 and 4: content coverage and analytics
Growth driver 3: expansion of content coverage Databases • Scopus (>40m abstracts) • Reaxys (31m chemical Additional content reactions) Journal content Reference types • SciVal (planning, • Public data • 1,200 journals • Print books performance and funding • Third party content • >230,000 • 15,000 e
Slide 23: S&T revenue and revenue by product
S&T revenue S&T revenue £m • >80% 80% of revenue derived from 1,200 subscriptions, strongly +3% +5% +5% +6% +6% +5% +3% +4% recurring revenues 1,000 800 • Revenue based largely 600 on multi-year contracts 400 • Correlation with GDP 200 d development l t 0 2004 2005 2006 2007 2008 2009 2010 2011 H1 G
Slide 24: S&T revenue by customer type and geography
S&T revenue by customer type Academic • Research universities Corporate • Highly penetrated, stable (16%) customer base Academic (71%) • Consistent long term research spend growth Government Government • Government laboratories (13%) • Follow national research agendas Corporate • Mix of general rese
Slide 25: Continuous investment in technology, infrastructure and people
Continuous investment in technology, infrastructure and people Elsevier capital expenditure People and capabilities £m 100 81 • Deep expertise in 80 72 65 60 – Content 60 51 54 35 36 46 50 – Technology 40 26 – Research tools and 20 insights 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 •
Slide 26: Agenda
Agenda Introduction Erik Engstrom, CEO Reed Elsevier Elsevier overview YS Chi, Chairman Elsevier The world of research Nick Fowler,, Director of Strategy gy Elsevier Elsevier Science & Technology Ron Mobed, CEO S&T Q&A Ron Mobed, CEO S&T World-class content Martin Tanke, MD S&T Journals Outcome enha
Slide 27: Elsevier S&T and the scientific article
Elsevier Science & Technology Market leading information “Improve research solutions, combining outcomes and productivity • World class content • Analytics and tools for researchers and their managers” 53 The scientific article is the cornerstone of research • Research starts with reading peer-revie
Slide 28: The scientific article is the cornerstone of academic life
The scientific article is the cornerstone of academic life and career Identify/ Secure Perform develop Publish Outcome funding research research topic • Literature • Identify • Plan research • Write draft • Contribute to research collaboration • Gather and • Build figures progress of • Find out what
Slide 29: Elsevier organises a large, complex publishing process
Elsevier organises a large, complex publishing process Building attractive journal brands Select high quality • >850,000 article • 7,000 editors submissions per year Solicit and • 70,000 editorial board • 30 new journals per manage members b Manage year submissions peer • >500,000 reviewers review •
Slide 30: Increasing demand to publish in Elsevier journals
Increasing demand from all over the world to publish in Elsevier journals Submitted articles Accepted and published articles 700 CAGR +10.3% 430 CAGR +3.5% 240 200 2006 2011 2006 2011 Elsevier S&T journals 59 Increasing demand from all over the world to publish in Elsevier journals 5-Year relative i
Slide 31: The journey to the Article of the Future
The journey to the Article of the Future From print: To ScienceDirect: 1 no links or 2 easy access, additional with links functionality 3 To Article of the Future: • Fits new ne digital research esea ch workflow o kflo – New added-value content – Connected to relevant databases – Optimised presentat
Slide 32: Article of the Future: content and interactivity
Content Interactivity 63 Content Cross-hair 64 32
Slide 33: Elsevier leads in journal publishing
Content & Context Databases Visualisation Interactivity 65 Elsevier leads in journal publishing • The research article continues to be of critical importance to scientists • The publishing process is complex, granularly sensitive, and requires deep understanding of the specific needs of scientific c
Slide 34: Information intensity and technology changing the research landscape
Agenda Introduction Erik Engstrom, CEO Reed Elsevier Elsevier overview YS Chi, Chairman Elsevier The world of research Nick Fowler,, Director of Strategy gy Elsevier Elsevier Science & Technology Ron Mobed, CEO S&T Q&A Ron Mobed, CEO S&T World-class content Martin Tanke, MD S&T Journals Outcome enha
Slide 35: SciVerse delivers productivity enhancing solutions for researchers
Researchers’ needs driven by changing environment • The researcher requires • Fast and efficient access to disparate types of content that combine broad b oad co coverage e age with ith highl highly specific search sea ch capabilities • Relevancy of results based on their discipline-specific criteri
Slide 36: Customer case study: SciVerse
Customer case study: SciVerse Assistant Director, Researcher Situation: A biologist is researching the potential links between cancer and stem cells. Researcher Pain Point: Whether there is a link between cancer and stem cells is a hotly debated topic at the moment. The most recent information is mo
Slide 37: SciVerse: time savings and applications
SciVerse: time savings driven by fast filtering to get to the answer quickly Limit to conferences in 2011 and 7 highly relevant results are displayed 73 SciVerse Applications improve outcomes More than 70 new applications – focused in four key areas: search, analytics, sharing, and collaboration Sci
Slide 38: SciVal combines information solutions and customer data
SciVal combines our information solutions, customer data and other services to improve outcomes Establish directory of Analyse institutional Benchmark performance research expertise strengths of researchers & teams View funding Custom data opportunities reporting services & intelligence Funding + Cl
Slide 39: SciVal Spotlight: areas of research excellence
SciVal: snapshot of university’s areas of research excellence (AoRE) based on a multi-disciplinary view Competencies with multiple colored lines are multi-disciplinary research areas (situated within dotted line) Physics/Math Computer Science Chemistry Social Science Humanities Brain Research Engine
Slide 40: SciVal Spotlight and Strata enable evidence-based decisions
SciVal Spotlight and Strata enable evidence-based decision on recruitment and performance Retrieve the researchers that xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx contribute most to an area of xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxx
Slide 41: Outcome enhancing online solutions
Outcome enhancing online solutions • Researchers’ needs are increasingly complex: demand for more Researchers efficient ways of finding information and using technology to improve outcomes • Research executives need evidence-based data to improve key strategic decisions to drive performance • We con
Slide 42: Shared services at the core of Elsevier
Shared services at the core of Elsevier Elsevier Market facing units: ~4,000 FTEs S i Science & Technology T h l H l h Sciences Health S i Shared Services : ~10,500 FTEs (2,500 employees; ~8,000 outsourced) Operations (~8,500 FTEs) Reed Elsevier: technology, data centre ope ations global procurement
Slide 43: Driving operational efficiency
Driving operational efficiency Quality & operational execution • Management by metrics • Continuous improvement – Lean 6Sigma • Relentless pursuit of efficiencies • Cost growth < revenue growth Increasing off-shore capability • 2011: >25% (400) of Operations FTEs off-shore • 12% capacity increase YO
Slide 44: Ongoing investment to improve user experience and efficiency
Ongoing investment to improve user experience and efficiency Under construction EVISE will support Reviewer • Article submission by authors Editor Editor • Review by peer reviewers • Publication approval by (Re)- Peer Decision editors Author Submission Review Editorial Accepted Benefits of new capab
Slide 45: Elsevier operations
Elsevier operations • A global organisation committed to operational excellence • Track record of driving operational efficiencies • Unparalleled scale & flexibility • Continuous improvement culture supported by Lean6Sigma • Designed to support Elsevier’s growth agenda 89 Agenda Introduction Erik En