John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Q4 2019 Earnings Presentation
21 slides from John Wiley & Sons's earnings presentation, Jun 11, 2019
Slide 1: Fourth Quarter and Fiscal Year 2019 Earnings Report
Fourth Quarter and Fiscal Year 2019 Earnings Report June 11, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement This 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
Slide 3: Key Takeaways
Key Takeaways − Achieved fiscal 2019 revenue and earnings targets − Missed on cash flow mainly due to timing-related changes in working capital performance, including journal subscription collection delays − Revenue growth accelerating in FY20, FY21 and FY22 − All growth engines performing well − Mu
Slide 4: Fourth Quarter 2019 Highlights
Fourth Quarter 2019 Highlights Solid revenue (+3%) and adjusted EPS growth (+26%), at constant currency and excluding Learning House acquisition, led by Research (+4% revenue and +6% CTP) and Publishing (-1% revenue and +23% CTP) Strong sales momentum across Research Journal Subscriptions and all ou
Slide 5: Fourth Quarter 2019 Performance
Fourth Quarter 2019 Performance Revenue GAAP EPS Adjusted EPS $477 $491 $1.10 $1.05 $0.93 $0.94 FY18 FY19 FY19 FY19 FY18 FY18 Q419 Revenue Growth Adjusted EPS Growth Reported +3% +12% Constant Currency (CC) +7% +19% CC excl. LH Acquisition +3% +26% See appendix for reconciliations and footnotes 5
Slide 6: Fiscal Year 2019 Highlights
Fiscal Year 2019 Highlights Achieved guidance for Revenue and Adjusted EPS Cash from Operations of $251M underperformed updated guidance mainly due to timing-related changes in working capital performance, including journal subscription collections delayed into FY20 Research delivered good growth an
Slide 7: Fiscal Year 2019 Performance
Fiscal Year 2019 Performance Revenue GAAP EPS Adjusted EPS $1,796 $1,800 $3.43 $3.32 $2.91 $2.96 FY18 FY19 FY18 FY18 FY19 FY19 FY19 Revenue Change Adjusted EPS Change Reported +0.2% (14%) Constant Currency (CC) +2% (8%) CC excl. LH Acquisition +0.4% (4%) Guidance 0% Mid-single digit decline See appe
Slide 8: Research – Solid profitable core with growth in strategic areas
Research – Solid profitable core with growth in strategic areas (millions) Q419 Change Change CC FY19 Change Change CC Journal Subscriptions $179 0% 5% $661 (2%) 0% Open Access $16 13% 19% $55 30% 33% Licensing, Reprints, Backfiles, Other $54 (6%) (2%) $186 2% 4% Total Journal Revenue $248 (1%) 4% $
Slide 9: Publishing – Print decline offset growth in strategic areas
Publishing – Print decline offset growth in strategic areas (millions) Change Change CC FY19 Change Change CC STM and Professional Publishing $68 (5%) (2%) $266 (8%) (6%) Education Publishing $30 (15%) (12%) $158 (16%) (14%) Courseware (WileyPLUS) $21 4% 5% $63 7% 7% Test Preparation and Certificati
Slide 10: Solutions – Growth engines accelerating
Solutions – Growth engines accelerating (millions) Q419 Change Change CC FY19 Change Change CC Education Services* $52 70% 70% $158 32% 32% Professional Assessment $18 6% 6% $66 8% 8% Corporate Learning $17 (13%) (5%) $65 2% 6% TOTAL REVENUE* $88 30% 32% $289 18% 19% CONTRIBUTION TO PROFIT (CTP) $8
Slide 11: Fiscal Year 2019 Cash Flow
Fiscal Year 2019 Cash Flow Cash From Operations Bridge FY18 Cash Flow from Operations $382M Working Capital Accounts receivable and deferred revenue* ($57M) 382 315 251 Accounts payable and accrued liabilities ($26M) Other working capital ($4M) FY17 FY18 FY19 Lower Cash Earnings (incl. Learning Hous
Slide 12: Strong Balance Sheet & Cash Return to Shareholders
Strong Balance Sheet & Cash Return to Shareholders • Modest leverage: Net Debt / EBITDA at 1.0, inclusive of Learning House acquisition • Capacity for strategic acquisitions: new $1.5B credit agreement increases capacity by $400M, extends maturity profile through May 2024 • Strong track record of re
Slide 13: Outlook
Outlook Driving the world forward with research and education Wiley Research Wiley Education Driving the discovery, usage and impact of scholarly research Enabling powerful learning for personal and professional growth Education & Professional Education Research Publishing and Platforms Publishing S
Slide 14: Research Publishing & Platforms
Research Publishing & Platforms Strategy – Accelerate the discovery, usage and impact Total Wiley Revenue of scholarly research Research Publishing Drivers and Platforms Continuous growth in global R&D spend (+4% annum) Strong growth in research article output Expanding Wiley corporate research sale
Slide 15: Education & Professional Publishing
Education & Professional Publishing Total Wiley Revenue Strategy – Publish high-impact content and courseware for in-demand careers, disciplines and skills Education and Drivers Professional Publishing Growing demand for career-focused content Tight publishing focus on high-demand disciplines and sk
Slide 16: Education Services
Education Services Strategy – Deliver education and tech-enabled services Education Services Total Wiley Revenue that help universities, corporations and learners to bridge the skill gap Drivers Accelerating growth of online enrollment and education services Growing network of Wiley schools, degree
Slide 17: FY19-20 Investments and Expected Gain
FY19-20 Investments and Expected Gain FY19-20 Investment Areas FY20 Expected Gains and Beyond • Expand Open Access publishing and direct-to- • Steady overall revenue growth Research researcher content acquisition • Open Access revenue growth 30%+ • Expand Atypon platform reach and capabilities • Art
Slide 18: Investing to Accelerate Profitable Growth
Investing to Accelerate Profitable Growth FY19 Actual FY20 Outlook FY22 Target Revenue $1.80B $1.84B-$1.87B ~$2.0B - Research Publishing & Platforms $937M $950-$960M ~$990M - Education & Professional Publishing $705M $690-$700M ~$720M - Education Services $158M $200-$210M ~$290M Adjusted EBITDA $388
Slide 19: Key Takeaways
Key Takeaways − Achieved fiscal 2019 revenue and earnings targets − Missed on cash flow mainly due to timing-related changes in working capital performance, including journal subscription collection delays − Revenue growth accelerating in FY20, FY21 and FY22 − All growth engines performing well − Mu
Slide 20: Appendix: Reconciliation of GAAP EPS to Adjusted EPS
Appendix JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF GAAP EPS to NON-GAAP ADJUSTED EPS - DILUTED (unaudited) Three Months Ended Year Ended April 30. April 30. 2019 2018 2019 2018 GAAP Earnings Per Share - Diluted $ 4.10 s 0.93 $ 291 $ 3.32 Adjustments: Restructuring and r
Slide 21: Appendix: Reconciliation of Net Income to Adjusted EBITDA
Appendix JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF GAAP NET INCOME to NON-GAAP EBITDA AND ADJUSTED EBITDA (unaudited) Year Ended April 30, 2019 Net Income $ 168,263 Interest expense 16,121 Provision for income taxes 44,689 Depreciation and amortization 161,155 Non-GAAP