John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Q4 2020 Earnings Presentation
25 slides from John Wiley & Sons's earnings presentation, Jun 11, 2020
Slide 1: Fourth Quarter and Fiscal Year 2020 Earnings Review
Fourth Quarter and Fiscal Year 2020 Earnings Review June 11, 2020
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: Business Review
Business Review Brian Napack, President and CEO
Slide 4: Executive Summary
Executive Summary • Wiley’s Q4 performance adversely impacted by global pandemic • We have transitioned smoothly to remote work environment and are fully focused on supporting our colleagues, customers and communities • Disruption from the pandemic led to a guidance update on April 9th; We finished
Slide 5: Supporting Our Colleagues and Communities
Supporting Our Colleagues and Communities Wiley Research Education • Transitioned successfully to • Opened access to critical • Providing 60K educators with working remotely worldwide scientific and healthcare webinars and online teaching tools research • Prior tech investment enabled • Providing fr
Slide 6: Well Positioned to Take Advantage of Long-Term Trends
Well Positioned to Take Advantage of Long-Term Trends Key Market Trends Wiley Approach Growing demand for high-quality, peer- Outpacing market in submissions, article output, and reviewed research usage growth; leading distribution platform Growing demand for high-impact, fairly- Growing digital cou
Slide 7: Fourth Quarter 2020 Summary
Fourth Quarter 2020 Summary Revenue GAAP EPS Adj. EPS Adj. EBITDA -2%* ----- -44%* -23%* $475M -$2.83 $0.66 $93M • Significant COVID-19 impact on Q4 revenue and earnings, notably print books, test prep and corporate training • GAAP EPS impacted by non-cash goodwill and trade name impairment charges
Slide 8: Fiscal Year 2020 Summary
Fiscal Year 2020 Summary Revenue GAAP EPS Adj. EPS Adj. EBITDA FCF +3%* ----- -21%* -8%* +16% $1,831M -$1.32 $2.40 $356M $173M • Solid revenue growth and profit improvement in Research and Education Services; challenging year in print books exacerbated by COVID-19 • Earnings decline reflects investm
Slide 9: Research Publishing & Platforms
Research Publishing & Platforms Steady full year revenue and EBITDA growth offset some Q4 disruption from COVID-19 (millions) Q4 2020 Change Change CC FY 2020 Change Change CC Research Publishing $241 (3%) (2%) $909 1% 2% Research Platforms $11 19% 19% $40 11% 11% TOTAL REVENUE $251 (3%) (1%) $949 1
Slide 10: Research Publishing & Platforms Snapshot
Research Publishing & Platforms Snapshot Recession-tolerant business with must-have content, brands, and platforms Fiscal Year 2021 Focus Areas Continue to drive article volume growth and lead in Open Access Revenue Successfully navigate CY 2021 journal renewal season $949M 52% of total Increase pre
Slide 11: Academic & Professional Learning
Academic & Professional Learning Challenging year for print books with severe Q4 disruption from COVID-19 (millions) Q4 2020 Change Change CC FY 2020 Change Change CC Education Publishing $84 (12%) (10%) $352 (5%) (4%) Professional Learning $66 (23%) (22%) $299 (10%) (9%) TOTAL REVENUE $150 (17%) (1
Slide 12: Academic & Professional Learning Snapshot
Academic & Professional Learning Snapshot Accelerating shift to high-demand career disciplines, digital courseware and online training Fiscal Year 2021 Focus Areas Education Publishing • Focus investment on career verticals - business, info tech, STEM Revenue • Accelerate new business model rollouts
Slide 13: Education Services
Education Services Solid revenue and EBITDA growth (millions) Q4 2020 Change Change CC FY 2020 Change Change CC Education Services $61 16% 16% $215 36% 36% mthree $13 $17 TOTAL REVENUE $73 41% 42% $232 47% 48% ADJUSTED EBITDA $11 87% $20 +$15 • Fiscal year organic growth of 11% driven by new partner
Slide 14: Education Services Snapshot
Education Services Snapshot Acceleration of online learning to benefit Wiley over the long term Revenue $232M Fiscal Year 2021 Focus Areas 13% of total Move quickly to meet evolving university and corporate needs given the unprecedented shift to online education Launch new degree programs with high
Slide 15: Financial Review
Financial Review John Kritzmacher, Executive Vice President and CFO
Slide 16: Fiscal 2020 Results vs. Guidance
Fiscal 2020 Results vs. Guidance Previous FY20 Guidance COVID-19 Update FY20 Actuals March 4, 2020 April 9, 2020 Revenue $1,855-$1,885M $1,805-$1,825M $1,831M Adjusted EBITDA $357-$372M $325-$350M $356M Adjusted EPS $2.45-$2.55* $2.15-$2.30 $2.40 Free Cash Flow $210-$230M Withdrawn $173M *Raised fro
Slide 17: Modest Leverage, Strong Cash Generation and Ample Liquidity
Modest Leverage, Strong Cash Generation and Ample Liquidity • Improved Cash Generation: Underlying business Cash From Operations characteristics enable stability and prudent investment for $millions long-term success 382 • Low Leverage: Net Debt / EBITDA at 1.6, inclusive of 315 288 251 multiple acq
Slide 18: Balanced Capital Allocation Prioritizing Growth Investments
Balanced Capital Allocation Prioritizing Growth Investments Capital Allocation • M&A focused on adding capabilities $millions and scale in key strategic areas • Capex focused on tech-enabled 126 190 230 Acquisitions services and platforms 0 Capital expenditures Share repurchases • Share repurchases
Slide 19: COVID-19 Uncertainty Precludes Annual Guidance for FY21
COVID-19 Uncertainty Precludes Annual Guidance for FY21 Research Education Publishing Professional Learning Education Services Research library budgets Campus reopenings Bookstore reopenings Student enrollments Corporate spend on Student enrollments Corporate office reopenings University finances ad
Slide 20: Immediate Cost Measures
Immediate Cost Measures • Restructuring charge ($15M) expected to generate annual savings of $30M • Executive leadership and Board of Directors taking 6-month pay reductions • Employee salary merit increases reduced and deferred • Discretionary spending controls implemented • Real estate portfolio u
Slide 21: Executive Summary
Executive Summary • For over 200 years, Wiley has successfully navigated periods of uncertainty and crisis through operational discipline, fiscal prudence, and strategic foresight • We have transitioned smoothly to remote work environment and are fully focused on supporting our colleagues, customers
Slide 22: Thank you for joining us
Thank you for joining us All investor material available on website at https://www.wiley.com/en-us/investors Q1 Earnings Call – September Contact us for follow-up at brian.campbell@wiley.com +1(201) 748-6874 22
Slide 23: Appendix
APPENDIX WILEY
Slide 24: Reconciliation of GAAP EPS to Non-GAAP Adjusted EPS
Appen: ‘ JOHN WILEY & SONS, INC. 24 ‘SUPPLEMENTARY INFORMATION RECONCILIATION OF GAAP EPS to NON-GAAP ADJUSTED EPS - DILUTED (unaudited) Three Months Ended Year Ended April 30, April 30, 2020 2019 2020 2019 GAAP (Loss) Earnings Per Share - Diluted $ (283) $ 110 S$ (1.32) $2.91 Adjustments: Impairmen
Slide 25: Reconciliation of GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA
Appendix JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION '? RECONCILIATION OF GAAP NET (LOSS) INCOME to NON-GAAP EBITDA AND ADJUSTED EBITDA (unaudited) Three Months Ended Year Ended April 30, April 30, 2020 2019 2020 2019 Net (Loss) Income $ (158,044) §$ 63,242 $ (74,287) $ 168,263 Interest expens