John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Investor Day (October 2019)
82 slides from John Wiley & Sons's investor day presentation, Oct 4, 2019
Slide 1: Driving the World Forward
Driving the World Forward WI LEY with Research & Education
Slide 2: Safe Harbor Statement
Safe Harbor StatementThis presentation contains certain forward-looking statements concerning the Company’s Fiscal Year 2020 Outlook, Fiscal Year 2022 Target, operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ m
Slide 3: Investor Day October 4, 2019
Investor Day October 4, 2019
Slide 4: Advancing knowledge and learning through years and seven generations
Advancing knowledge and learning through 214 yearsand seven generations 4
Slide 5: Advancing knowledge and learning through years and seven generations
Advancing knowledge and learning through 214 yearsand seven generations 5
Slide 6: Wiley at a glance: key metrics
75%Digital 55%Recurring $1.8BRevenue $388MAdjusted EBITDA $149MFree Cash Flow 1.0xNet Debt / Adjusted EBITDA 6
Slide 7: The Wiley Story
The Wiley Story Favorable long-term market fundamentalsMust-have content, brands, platforms, and servicesStrong balance sheet and cash flow characteristicsStrategic investments and optimization gaining traction Revenue, Adjusted EBITDA, and Cash Flow growth in FY21 and FY22Consistent record of retur
Slide 8: Agenda
Company Overview Brian Napack Research Publishing & Platforms Judy Verses EducationAcademic & Professional LearningEducation Services Brian NapackTodd Zipper Financial Performance John Kritzmacher Q&A Session Agenda 8
Slide 9: We empower researchers, learners, universities and corporations
We empower researchers, learners, universities and corporations to achievetheir goals in an ever changing world researchers learners universities corporations 9
Slide 10: Wiley is Research and Education
Wiley is Research and Education $2 trillion global spend, 6% CAGR since 20002.5M articles published, 4% CAGR since 2000 Source: Congressional Research Service, Global Research and Development Expenditures: Fact Sheet, Sep 2019STM Report, 2018, NCES 2017 expenditures of all degree-granting post-secon
Slide 11: Content, platforms and services that have impact
Content, platforms and services that have impact WILEY RESEARCHDriving the discovery, usage and impact of scholarly research Research Publishing & Platforms Research publishingResearcher tools and servicesContent delivery platformsCorporate media servicesDigital content and data products WILEY EDUCA
Slide 12: Unmatched global network
Unmatched global network 10,000+Research institutions 600+Scientificsocieties 60+Service partner universities 1,000+Corporate partners 4M+Societymembers 16M+Researcheraudience MillionsStudents 12M+Professionals WILEY RESEARCH WILEY EDUCATION
Slide 13: Portfolio of leading brands and partners
Portfolio of leading brands and partners Brands Universities Societies Corporations
Slide 14: Why Wiley Wins
Business Optimization Must-have brands andhigh-impact content Powerful technology driving critical outcomes Compelling price-value propositions High-demanddisciplines, skillsand careers Why Wiley Wins
Slide 15: Investing to drive profitable growth
FY20 Investment Areas FY20 Expected Gains and Beyond Investing to drive profitable growth Research Publishing & Platforms Mixed-model publishingResearcher solutions Steady growth with diversifiedrevenue streams Academic & Professional Learning High-impact coursewareDistribution model enhancement Ret
Slide 16: Pursuing strategic M&A
Pursuing strategic M&A Research content platform leadership Partner and program scaleFull education delivery capability Researcher workflow toolsCollaboration network Proven adaptive learning platform Low-cost, high-impact content Aug 2016 Nov 2017 May 2018 May 2019 July 2019 Augment strategyGain ca
Slide 17: Targeting $2B revenue by FY22
Targeting $2B revenue by FY22 Adjusted EBITDA $388M ~$440M Free Cash Flow $149M ~$250M Research Publishing & Platforms Academic & Professional Learning Education Services $1.8B 52% 35% 39% 9% 15% 50% FY19 FY22 ~$2.0B +4% CAGR
Slide 18: Strong foundation for long-term performance
Strong foundation for long-term performance The Wiley Culture Strong CoreMarkets Leading Brands and Products BroadGlobal Reach Portfolio Synergy Optimization Opportunity Governanceand Stewardship Strong Balance Sheet
Slide 19: Research
Research Driving the discovery, usageand impact of scholarly research 19
Slide 20: We empower researchers, learners, universities and corporations
20 We empower researchers, learners, universities and corporations to achievetheir goals in an ever changing world
Slide 21: Researchers need to publish in high-quality journals
21 Researchers need to publish inhigh-quality journals with impactand global visibility
Slide 22: Universities need access to world-class content
22 Universities need to provide their researchers access to world-class content
Slide 23: Corporations need world-class content to fuel innovation
23 Corporations need world-class content to fuel innovation and need to reach global research communities
Slide 24: Wiley is at the center of the global research ecosystem
Wiley is at the center of the global research ecosystem #1 research publishing platform50%+ of world’s research hosted100% of world’s researchers3.5B sessions a year200+ publishing customers Top 3 research publisher1650 scholarly journals665K article submissions / year609 societies with 4M members25
Slide 25: Essential research and publishing brands built over decades
Essential research and publishing brands built over decades
Slide 26: The core research market is strong
The core research market is strong; growth in R&D spend and article output creates opportunity 6% CAGR>$2T in 2016 7% CAGR>2M in 2018 1% CAGR~$10B STM journal market Library Content Spending: Data source: Outsell Library Market Size, Spending, Forecast, and Trends: 2018, Market Size, Share, Forecast
Slide 27: The needs of researchers, libraries and funders are evolving
The needs of researchers, libraries and funders are evolving Publishing in high-quality journalsFast publishing to biggest impactAccess to content anytime, anywhereCompliance with funder OA policies Constrained library budgetsFlexibility in business modelsProgress on Open Access, Open ResearchFillin
Slide 28: Why Wiley Wins in Research
Why Wiley Wins in Research Diversified revenue streams Increasing publishing volume and share Enhanced value for researchers and authors High-quality publishing program and portfolio Optimized publishing operations Business Optimization Must-have brands andhigh-impact content Powerful technology dri
Slide 29: Article output underpins our business
2016-2018 Article CAGR Market Leadership Benefits Article output underpins our business, supporting stronger growth Open Access revenue (Price x Quantity)Subscription value propositionDemand for platform and author servicesIncreased author and corporate revenue 2.4% 5.3% 3.1% 8.3% Wiley Rest of mark
Slide 30: Strong submissions to OA journals illustrate revenue opportunity
Article Submissions Strong submissions to OA journals illustrate revenue opportunity Data shown is annual submissions to Wiley Open Access journals using either Editorial Manager or ScholarOne as their Electronic Editorial Office (EEO) system. The percentage shown is the 2018 growth over prior year;
Slide 31: First comprehensive Publish and Read agreement
Signed the first comprehensive Publish and Read agreement and saw an immediate reputation and business benefit +10% 2019 YTD vs. PY “It’s a great day for German science, a great day for European science, and it’s a great day for global science.”Robert-Jan SmitsEuropean CommissionOpen Science Envoy 7
Slide 32: Wiley is growing market share
Wiley is growing market share 4.8%CAGR Up-front payments support strong cash flowMulti-year deals with recurring Subscription and Open Access revenueVolume-based with potential to materially grow revenue Strong reputational impact puts Wiley at the forefront of OA Wiley Market Share of Articles
Slide 33: Our portfolio strength enables new revenue streams
Our portfolio strength enables new revenue streams Market leader in STM platforms, distributing over half of the world’s scientific research Marketing, recruiting, and lab informatics services for corporations eager to reach Wiley’s high-value audiences New services that increase author profile, rea
Slide 34: New revenue streams are driving overall growth
New revenue streams are driving overall growth Shown: Annual revenue for the Research segment of John Wiley & Sons, Inc. Data source: internal financial reporting system. Percentages show revenue growth in FY19 over prior year at constant currency Other FY19 Growth: 16%$159M Revenue Platforms Corpor
Slide 35: Business optimization drives revenue growth and efficiency
Portfolio Business Optimization Optimization efforts drive revenue growth and efficiency Focus on high-growth subjects Grow China Leverage existing brands Manage portfolio profitability Lower article unit cost Optimize content production Enhance workflows Shorten time to publish Realize publishing a
Slide 36: Volume gains are driving revenue and Adjusted EBITDA growth
Volume gains are driving revenue and Adjusted EBITDA growth FY19 Revenue Subs Pressure Article Growth FY22 Revenue Article Growth& Optimization FY19 EBITDA Subs Pressure FY22 EBITDA Subscriptions will remain globally important over time horizonArticle growth will offset modest subscription pressureS
Slide 37: Research Financial Snapshot
Financial Snapshot Key Takeaways Research Revenue$937M FY19 Actual FY20 Outlook FY22 Target Revenue $937M $950M-$960M $990M Adjusted EBITDA Margin34% Essential brands, platform, and reputationSolid core market with OA accelerating growthOutpacing market in article growth, driving revenues in OA, Cor
Slide 38: Education
Education Enabling powerful learningfor personal and professional growth
Slide 39: We empower researchers, learners, universities and corporations
39 We empower researchers, learners, universities and corporations to achievetheir goals in an ever changing world Market Needs Bridging the skill and talent gap Better career outcomes Faster, more affordable education
Slide 40: Wiley Education delivers outcomes that drive lifelong career success
Wiley Education delivers outcomes that drive lifelong career success Effective, affordable coursewareHigh-stakes test preparationProfessional developmentDegrees and certifications HIGHER EDUCATION PROFESSIONAL DEVELOPMENT CareerGoals CareerSuccess CONTENT - TOOLS - SERVICES
Slide 41: Wiley Education delivers content, courseware and degree programs
Wiley Education delivers content, courseware and degree programs to students and professionals Note: Academic & Professional Learning segment formerly referred to as “Education & Professional Publishing” in FY20 Q1 results Content and courseware for students, certification seekers and professionals
Slide 42: Wiley Education overview
Wiley Education overview * Academic & Professional Learning segment, formerly Education & Professional Publishing FY19 Revenue FY16-19 CAGR FY19 EBITDA Margin Higher Education $229M -8% 31%* Reference $102M -8% Test Preparation $41M +15% Professional Books $200M -5% Professional Development $66M +5%
Slide 43: Education revenue predominantly digital and tech-enabled services
Wiley Education revenue is now predominantly from digital and tech-enabled services +22% CAGR +5% CAGR -11% CAGR Digital & Courseware FY19 FY17 FY16 $859M FY18 Print FY20F Tech-EnabledServices $898M $863M $861M $905-925M Portfolio Transition
Slide 44: Why Wiley Wins in Academic & Professional
Why Wiley Wins in Academic & Professional Business Optimization Must-have brands andhigh-impact content Powerful technology driving critical outcome Compelling price-value propositions High-demanddisciplines, skillsand careers Focus on high-demand careers, degrees and certifications Delivering outc
Slide 45: Wiley targets high-demand careers and skills
Wiley targets the high-demand careers and skills that are driving the knowledge economy Healthcare +1.9M new jobs by 2028 WileyTop degrees for Education Services Business, Finance & Accounting +1.3M new jobs by 2028 Wiley#2 in BFA education and publishing ProfessionalSkills +12% global skills develo
Slide 46: Academic & Professional Learning serves attractive markets
Academic & Professional Learning Wiley Academic & Professional Learning businesses serve attractive, career-focused markets All market growth rates are 3-year CAGRs; Sources: AAP, Deloitte, Bookscan, Technavio Selected partners +6% Courseware market growth +5% Book sales growthin Wiley subjects +11%
Slide 47: Higher Education: Investing in technology that drives outcomes
Higher Education: Investing in technology that drives learning outcomes and enhanced value Rapidly growing in high-growth subjectsLeader in computer science courseware Fully interactive learning contentLess text, more action drives student successLower price / unit with 90%+ sell-through 2016 2017 2
Slide 48: Rebalancing price & value is a win-win
Rebalancing price & value is a win-win for students and Wiley Realized revenue Value proposition Price Retail margin Sell-throughper 100 students $1,120-2,520 Premium print content x = $80-120 .70 x 20-30 Units $5,415-5,700 Engaging digital-first contentHigh-engagement platform x = $60 .95 x 95-100
Slide 49: Professional Development: Content to courseware drives growth
Professional Development: Content to courseware drivesgrowth & profitability Fast growing, highly profitable businessStrong demand for professional development books to further careersMarket leading publisher in Business, Management, Finance & AccountingKnowledge, experience and network to transform
Slide 50: Increasing effectiveness enhancing affordability
Portfolio Business Optimization Increasing effectiveness enhancing affordability Publishing in high-demand disciplines Direct distribution and new business models Delivering high-value courseware & platforms Optimizing content management and customer care Lowering content development and delivery co
Slide 51: Academic & Professional Financial Snapshot
Academic & Professional Rising demand for high-quality courseware Market leader in critical career and skills areas Improving price-value unlocks growth potential Sustained high margin profileReturn to organic growth in FY21 FY19 Actual FY20 Outlook FY22 Target Revenue $703M $705-$715M >$720M Revenu
Slide 52: Education Services
Education Services Enabling powerful learningfor personal and professional growth
Slide 53: We empower researchers, learners, universities and corporations
53 We empower researchers, learners, universities and corporations to achievetheir goals in an ever changing world Market Needs Better career outcomes Improved retention Increased enrollment
Slide 54: Tech-enabled services that address critical market needs
Wiley delivers tech-enabled services that address critical market needs University & Student Success Program Selection & Design StudentRecruitment Program Delivery & Support Career Connection
Slide 55: The Education Services market continues to grow rapidly
The Education Services market continues to grow rapidly * OPM, OPE, MOOC-OPM, emerging models. Excludes short coursesSource: Holon IQ, Total Global OPX Revenue, Sep 2019. Holon IQ market definition: Global OPX: the entire spectrum of services models supporting Universities in the design, development
Slide 56: Broad range of services and flexible partnership models
Certifications, advancementFull-stack deliveryStudent and employer pay Tech-enabled University Program ServicesFlexible approach to meet customer needsRevenue share and fee-for-service model Broad range of services and flexible partnership models Share of revenue reflects fiscal year 2020. YoY growt
Slide 57: The Wiley network is large, diverse and growing
65+University Partners 5,000+Course Catalog 35,000+ Enrollments 800+Degree Programs 50,000+Total Graduates The Wiley network is large, diverse and growing
Slide 58: Wiley delivers valuable outcomes such as enrollment
We teach, we research, we administer. A lot of what Wiley is able to do is not part of our core capabilities, and thank goodness we’ve figured that out Collaboration is the driving force of our relationship. It’s laying the groundwork for growth that we didn’t know was possible before we began worki
Slide 59: Strong revenue outlook
Strong revenue outlook 15%1 FY22F FY18 $200M FY19 FY20F $210M 1 Assumes a full year of Learning House revenue in Education Services in FY19 to normalize growth rate Education Services Revenue
Slide 60: Profitability improves as partnerships mature
Education Services profitability improves as partnerships mature >3 years 60%of partners Mature 25-35% 1-3 years 20% of partners Emerging 0-10% <1 years 20% of partners New Negative Indicative EBITDA Margin
Slide 61: Optimization efforts drive revenue growth and efficiency
Optimization efforts drive revenue growth and efficiency Note: Total cost per start = All marketing spend, all payroll for marketing and enrollment, Enterprise Learning Solutions; SLV = Student Lifetime Value; Start = Student commencing a program Optimization Growing, productive partner portfolio Gr
Slide 62: Why Wiley Wins in Education Services
Why Wiley Wins in Education Services Business Optimization Must-have brands andhigh-impact content Powerful technology driving critical outcome Compelling price-value propositions High-demanddisciplines, skillsand careers Focus on high-demand careers, degrees and certifications Growing, diverse net
Slide 63: Attractive business fundamentals
Attractive business fundamentals Market demand driving double-digit growth >90% of FY20 revenue contracted ~40% average share in tuition-share models ~7 year average partnership term length
Slide 64: Education Services Financial Snapshot
FY19 Actual FY20 Outlook FY22 Target Revenue $158M $200-$210 $290M Adjusted EBITDA % 3% 15% Education Services Market leader with gold-standard reputation Broad portfolio of partners, programs, services and partnership modelsAccelerating growth from market expansion and Wiley growth strategiesStro
Slide 65: Financial Performance
Financial Performance Positioned for ongoing success 65
Slide 66: Strong fundamentals and strategic plan
Strong fundamentals and strategic plan Solid revenue base powered by favorable market positions and broad recurring revenueAccelerated revenue growth driven by increased investment, including acquisitionsOptimization initiatives yield step-function gains in operational effectiveness and sustainable
Slide 67: Revenue
Revenue Solid revenue base, increased investment to accelerate growth Revenue baseFavorable market positions75% digital and tech-enabled services55% recurring revenueInvestmentsIncreased Research volume and efficiencyHigh-demand, high-impact coursewareScale and breadth in Education ServicesBusiness
Slide 68: All three business segments contributing to growth
All three business segments contributing to growth 1% CAGR 2% CAGR $ millions $ millions $ millions 1 Academic & Professional Learning formerly referred to as Education Publishing & Professional Learning2 Assumes a full year of Learning House revenue in Education Services in FY19 to normalize growth
Slide 69: Adjusted EBITDA and Margin
Adjusted EBITDA and Margin Revenue growth and optimization driving EBITDA gains Business optimization to extract $100M in gross savings from FY19 cost baseFY20 EBITDA margin dip driven by investments and revenue mix shiftEBITDA margin recovery enabled by investments, including Education Services pro
Slide 70: Business optimization accomplishments
Business optimization accomplishments Outsourced print production and distribution operations – shifting to variable costSharply reduced print inventory – advanced inventory management, shift to digitalUnified customer service operations – outsourced low-value transactional activityMigrated to low-c
Slide 71: Next steps in business optimization
Next steps in business optimization Product and service portfolio optimizationEnd-to-end Research Publishing process simplification, standardization and automationAcademic & Professional Learning back office standardization and automationEducation Services student journey effectiveness and efficienc
Slide 72: Favorable free cash flow performance over time
Favorable free cash flow performance over time 1 Free cash flow defined as cash from operations less capital expenditures and product development spendingFY16-19 are reflected in reported currencyFY20-22 outlook reflects fiscal year 2019 average foreign exchange rates and as previously disclosed on
Slide 73: Strategic acquisitions funded by cash from operations
Year Acquisition Price paid(net of cash) Year end net-debt-to -adjusted EBITDA FY16 - 0.6x FY17 $121M 0.8x FY18 - 0.5x FY19 $190M 1.0x FY20 YTD $54M$16M Strategic acquisitions funded by cash from operations FY16-19 are reflected in reported currency
Slide 74: Long history of strong cash returns to shareholders
Long history of strong cash returns to shareholders FY10-19 are reflected in reported currency 3.1%Currentdividend yield As of 10 / 01 / 19 $ millions Dividend and Share Repurchases
Slide 75: Prudent and balanced approach to capital allocation
Prudent and balanced approach to capital allocation 100%of capital outlays effectively funded by cashfrom operations1 Share repurchases Cash acquisitions Dividends Capital expenditure 1 Revolving credit facility applied at time of purchase and subsequently repaid with cash from operationsFY10-19 are
Slide 76: The Wiley Story
The Wiley Story Driving the world forward with Research and Education and delivering value for our stakeholders 76
Slide 77: Wiley is Research and Education
WILEY RESEARCHDriving the discovery, usage and impact of scholarly research WILEY EDUCATIONEnabling powerful learning for personal and professional growth Wiley is Research and Education Driving the world forward with Research and Education
Slide 78: Why Wiley Wins
Why Wiley Wins Business Optimization Must-have brands andhigh-impact content Powerful technology driving critical outcome Compelling price-value propositions High-demanddisciplines, skillsand careers Diverse revenue streamsLead in Open AccessPlatform innovation and expansion Research Publishing & Pl
Slide 79: Strong foundation for long-term performance
Strong foundation for long-term performance The Wiley Culture Strong CoreMarkets Leading Brands and Products BroadGlobal Reach Portfolio Synergy Optimization Opportunity Governanceand Stewardship Strong Balance Sheet
Slide 80: The Wiley Story
The Wiley Story Favorable long-term market fundamentalsMust-have content, brands, platforms, and servicesStrong balance sheet and cash flow characteristicsStrategic investments and optimization gaining traction Revenue, Adjusted EBITDA, and Cash Flow growth in FY21 and FY22Consistent record of retur
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Slide 82: Reconciliation of GAAP net income to non-GAAP Adjusted EBITDA
Appendix: Reconciliation of GAAP net income to non-GAAP Adjusted EBITDA Fiscal Year Ended 2016 2017 2018 2019 Net Income $ 145,782 $ 113,643 $ 192,186 $ 168,263 Interest expense Interest expense 16,707 16,938 13,274 16,121 Provision for income taxes Provision for income taxes 29,011 77,473 21,745 44