Wolters Kluwer N.V. · EURONEXT:WKL
Wolters Kluwer — UBS Media Reverse Roadshow 2005
43 slides from Wolters Kluwer's conference presentation, Mar 17, 2005
Slide 1: UBS Media Reverse Roadshow
Wolters Kluwer UBS Media Reverse Roadshow Boudewijn Beerkens Member Executive Board/CFO 17 March 2005 – Hilton Hotel, London
Slide 2: Agenda
Agenda ¾ Highlights ¾ Key Performance Indicators ¾ Divisional Performance & Focus ¾ Outlook ¾ Financial Performance ¾ Summary ¾ Q&A UBS Media Reverse Roadshow - March 17, 2005 London 1
Slide 3: Highlights
Highlights
Slide 4: Highlights
Highlights Delivered on all targets Restored top-line growth Cost savings ahead of schedule Reorganization complete Strong renewal performance Momentum building in 2005 UBS Media Reverse Roadshow - March 17, 2005 London 3
Slide 5: Restructuring Ahead of Plan
Restructuring Ahead of Plan Business unit restructuring Global content platform Off-shoring - increased bandwidth SAP implementation / F&A consolidation Data center consolidation Supporting the integrated businesses UBS Media Reverse Roadshow - March 17, 2005 London 4
Slide 6: All 2004 Targets Achieved or Exceeded
All 2004 Targets Achieved or Exceeded Key Operational Measures 2003 Target 2004 Actual 2004 Revenue growth* 0% 0-1% √ 1% Ordinary EBITA margin 18% 14-16% √ 16% (After exceptional items) 15% 13-15% √ 15% Cash conversion 109% 100-110% √ 126% Key Financial Measures Ordinary free cash flow €393mln ≥ €30
Slide 7: Divisional Operating Performance & 2005 Focus
Divisional Operating Performance & 2005 Focus
Slide 8: Health
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Slide 9: Health Results
Health Results Profe ssiona l & Pha rm a Solutions 18% Educa tion 32% Clinical Tools ¾ Organic growth of 3.3% (2003=flat) 7% ¾ Strong 4th quarter with 6% organic growth Me dical Resea rch 43% ¾ Strong growth at Pharma Solutions and Professional & Education ¾ On-line Revenues at Ovid (MR) grew by 11%
Slide 10: Health Focus 2005
Health Focus 2005 Society Services ¾ Service level improvements ¾ Improved retention rates ¾ Enhance product & service offerings Ovid ¾ Content enhancements ¾ Platform enhancements Point-of-Care ¾ Optimizing relationships with EMR partners ¾ Meet demand from EMR vendors asking for POC transactional
Slide 11: Corporate & Financial Services (CFS)
Corporate & Financial Services (CFS)
Slide 12: CFS Results
CFS Results F ina ncia l Serv ice s ¾ Organic growth of 5% 36% Corporate Le ga l Se rv ices 64% ¾ Strong performance at Corporate Legal Services ¾ Financial services had a particularly strong second half Change (million) Acquisition/ Million 2004 2003 Organic Currency Total Divestment Revenues (USD)
Slide 13: CFS 2005 Focus
CFS 2005 Focus Expand Workflow Solutions ¾ Corporate Legal Services ¾ Banking – leveraging PCi acquisition ¾ Expansion of UDS product line Extend E-billing and Litigation Support Services ¾ Provide flexible product & price modules (ASP) ¾ Expand sales coverage Continue Expere Rollout ¾ Continue move
Slide 14: Tax, Accounting & Legal (TAL)
Tax, Accounting & Legal (TAL)
Slide 15: TAL Results
TAL Results Le gal 34% ¾ Flat organic growth overall due to Tax & Accounting deliberate pruning of Legal ($23 million) 66% ¾ Tax & Accounting showed good organic growth of 3% driven by strong sales in tax and accounting software ¾ Savings achieved through shared services initiatives and real estate
Slide 16: TAL Focus 2005
TAL Focus 2005 Globalization ¾ Versioning products for different market segments ¾ Global offering ProSystemFX ¾ Continue adding new products to the PFX office suite ¾ Penetrate small-firm market Continue Launch of Integrated Content Libraries ¾ Expand specialty legal libraries ¾ Launch integrated t
Slide 17: Legal, Tax & Regulatory Europe (LTRE)
Legal, Tax & Regulatory Europe (LTRE)
Slide 18: LTRE Results
LTRE Results UK 13% SC 3% FR 17% BEL 9% IT/SP ¾ Improved organic growth on last year; 16% still declining with continued weak NL 21% GER/AUS/ CEE TLR market conditions 5% 16% ¾ Restructuring continues in the Netherlands, UK, and Belgium ¾ Market share gains in Italy, France, Spain, Poland, Czech Rep
Slide 19: LTRE Focus 2005
LTRE Focus 2005 Fix & Transform ¾ Restructuring in the Netherlands, Belgium and acceleration of the UK plan ¾ Alignment of resources to improve product development, sales & marketing and linkage between software and services business ¾ Centralizing software and on-line platform development, explorin
Slide 20: Education
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Slide 21: Education Results
Education Results Germany / Aus Other 8% 15% UK ¾ Organic growth of 1% 16% Netherlands 39% ¾ Strong performance in the Netherlands Sweden 22% with upturn of purchase cycle in secondary education ¾ Continued difficult markets ¾ Good control of costs Change (million) Acquisition/ Million 2004 2003 Org
Slide 22: Education Focus 2005
Education Focus 2005 ICT Expansion ¾ Further expand traditional textbook business with ICT components ¾ Use of common ICT / development architecture and platforms Adjacent Market Expansion ¾ Testing & Assessment ¾ Corporate E-learning / digitalspirits.com UBS Media Reverse Roadshow - March 17, 2005
Slide 23: Outlook
Outlook
Slide 24: 2005 Outlook
2005 Outlook ¾ Continued investments Deliver stronger growth ¾ New products ¾ Stronger customer relationship ¾ Support the integrated business Execute Restructuring ¾ Shared services; Global Platform, SAP, Off-shoring ¾ Data Center consolidation ¾ Health Extend positions in ¾ CFS highest return mark
Slide 25: Divisional Outlook 2005
Divisional Outlook 2005 Division Organic Revenue Growth Health 3-5% Corporate & Financial Services 3-5% Tax, Accounting & Legal 2% Legal, Tax & Regulatory Europe -1%* Education 1-2% Wolters Kluwer 1-2% * Including ~ € 20 million pruning UBS Media Reverse Roadshow - March 17, 2005 London 24
Slide 26: Impact of Restructuring 2003-2006
Impact of Restructuring 2003-2006 EUR Million 2003 2004 2005E 2006E Total Non-Exceptional - 25 30 10 restructuring costs ~ 215 Exceptional 96 44 10 - restructuring costs FTE reductions 521 724 400 200 ~ 1800 110 Total cost savings 29 70 80-90 100-110 (run-rate) Restructuring Ahead of Plan UBS Media
Slide 27: 2005 Outlook & Beyond
2005 Outlook & Beyond Target 2007 Key Operational Measures 2003 Actual 2004 2005* onwards* Organic revenue growth -2% 1% 1-2% 4% Ordinary EBITA margin 18% 16% 15-16% 19-20% (After exceptional items) 15% 15% 14-15% Cash conversion 109% 126% 95-105% ~ 100% Key Financial Measures Ordinary free cash flo
Slide 28: Financial Performance
Financial Performance 2004
Slide 29: Key Financials
Key Financials Actual Constant Organic EUR Million 2004 2003 Currencies Currencies Growth % % % Revenues 3,261 3,436 (5) (1) 1 Ordinary EBITA 521 610 (15) (10) (6) Ordinary EBITA margin % 16 18 EBITA margin % 15 15 Ordinary Net Income 311 349 (11) (4) Ordinary EPS (fully diluted) €1.04* €1.18 (12) (
Slide 30: Profit & Loss
2004 EUR 2004 Ordinary Million Revenues EBITA Profit & Loss Health 623 103 CFS 437 83 EUR Million 2004 2003 TAL 596 139 LTRE 1,296 183 Revenues 3,261 3,436 Education 309 52 Ordinary EBITA 521 610 Corporate (39) Ordinary EBITA margin % 16 18 Total 3,261 521 Exceptional items (44) (96) EBITA 477 514 ¾
Slide 31: Consolidated Balance Sheet
Consolidated Balance Sheet EUR Million 2004 2003 Total fixed assets 2,944 3,299 Total current assets 1,852 1,745 Total current liabilities (1,704) (1,353) Working capital 148 392 Capital Employed 3,092 3,691 Shareholders’ equity 775 861 Long-term liabilities 2,093 2,521 Minority interests 6 3 Provis
Slide 32: Free Cash Flow
Free Cash Flow EUR Million 2004 2003 Cash flow from operating activities 534 500 Cash flow investments (139) 296 Cash flow financing (111) (676) Net Cash Flow 284 120 Cash and cash equivalents as at Jan. 1 404 293 Exchange differences on cash equivalents (1) (9) Cash and Cash Equivalents as at Dec.
Slide 33: Working Capital Development
Working Capital Development (Organic Trend) Analysis of contribution (+) absorption of (-) Cash Flow EUR Million 2004 2003 04/03 Inventories 9 17 (8) Trade debtors 70 4 66 Other debtors (3) 11 (14) Deferred income 6 19 (13) Trade creditors 65 (5) 70 Other short-term liabilities 2 (12) 14 Increase/(D
Slide 34: Acquisitions and Divestments 2004
Acquisitions and Divestments 2004 ¾ Acquisitions ¾ Total acquisition spending €56 million (including mainly earn outs and increased stake in Cedam) ¾ Summation (US), Telesoftware (Spain), Beam (Education), Sian (US) ¾ Total considerations of these four acquisitions is €32 million; annualized revenue
Slide 35: International Financial Reporting Standards (IFRS)
International Financial Reporting Standards (IFRS) Net Income Equity (EUR Million) (EUR Million) 31 Dec. 2004 Dutch GAAP 135 775 Adjustments Goodwill and intangible assets (IFRS 3) 155 155 Pension expense / liabilities (IAS 19) (1) 11 Share option expense (IFRS 2) (3) - Deferred tax (IAS 12) 25 (196
Slide 36: 2005 Outlook
2005 Outlook Actual Target Lower Free Cash Key Operational Measures 2004 2005* Flow 2005 ¾ Non-recurring working Organic revenue growth 1% 1-2% capital improvement of €149 mln in 2004 Ordinary EBITA margin 16% 15-16% ¾ Increased CAPEX spending (After exceptional items) 15% 14-15% ¾ First coupon paym
Slide 37: Financial Overview
Financial Overview Working Capital (EUR Million) Free Cash Flow (EUR Million) 456 386 400 393 363 328 149 34 23 -12 1999 2000 2001 2002 2003 2004 1999 2000 2001 2002 2003 2004 - 39 -54 Net Debt (EUR Million) Debt Maturity Profile (EUR Million) 2821 2614 2664 975 2363 1900 687 645 1527 375 236 232 5
Slide 38: Summary
Summary Momentum to deliver stronger growth New strategy yielding results on all fronts Cost savings ahead of expectations Strong Financial Position Long-term outlook raised to 4% organic growth and 19-20% margins UBS Media Reverse Roadshow - March 17, 2005 London 37
Slide 39: The Professional's First Choice
The Professional’s First Choice Provide information, tools and solutions to help professionals make their most critical decisions effectively and improve their productivity
Slide 40: Appendix
Appendix
Slide 41: Health - Q4 CFS - Q4
Health - Q4 Change (million) Acquisition/ Million 2004 2003 Organic Currency Total Divestment Revenues (USD) 218 206 (EUR) 168 173 11 (1) (15) (5) EBITA (USD) 40 44 (EUR) 30 37 (4) - (3) (7) EBITA margin% 18 21 CFS - Q4 Change (million) Acquisition/ Million 2004 2003 Organic Currency Total Divestmen
Slide 42: TAL - Q4 LTRE - Q4
TAL - Q4 Change (million) Acquisition/ Million 2004 2003 Organic Currency Total Divestment Revenues (USD) 187 192 (EUR) 143 162 (5) (2) (12) (19) EBITA (USD) 33 43 (EUR) 25 36 (11) - - (11) EBITA margin% 17 22 LTRE - Q4 Change (million) Acquisition/ Million 2004 2003 Organic Currency Total Divestmen
Slide 43: Education - Q4
Education - Q4 Change (million) Acquisition/ Million 2004 2003 Organic Currency Total Divestment Revenues (EUR) 55 53 1 - 1 2 EBITA (EUR) (7) (1) (6) - - (6) EBITA margin% (11) (2) UBS Media Reverse Roadshow - March 17, 2005 London 42