John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Investor Day (January 2017)
37 slides from John Wiley & Sons's investor day presentation, Jan 13, 2017
Slide 1: Wiley Investor Day
Wiley Investor Day Research and Learning Services in the Knowledge Economy January 13, 2017
Slide 2: Introduction
Introduction Speakers Mark Allin, President and CEO Judy Verses, EVP, Research Jeff Sugerman, EVP, Solutions John Kritzmacher, CFO & EVP, Technology and Operations About Wiley Wiley is a global provider of knowledge and learning services primarily in areas of science, technology, medicine, mathemati
Slide 3: Agenda
Agenda 1 Impact, Culture, and Values 2 Profile and Progress 3 Publishing 4 Research 5 Solutions 6 Financials, Investments, and Operational Excellence 7 Summary
Slide 4: Impact, Culture, and Values
Impact, Culture, and Values
Slide 5: 210 Years of Impact
210 Years of Impact We improve scientific, technical, and medical research for a better world. We help people thrive in a knowledge economy. We help authors build their careers, researchers improve their findings, and academic societies connect with their communities. We help people and organization
Slide 6: Culture and Values
Culture and Values Our Values Our Focus People Solutions for our customers/partners Partnerships Collaboration and community Performance Accountability and productivity Driving long-term results
Slide 7: Partners and Customers
Partners and Customers • Over 800 academic society partners • 15 million researchers • Thousands of academic institutions • Hundreds of thousands of students • Hundreds of leading companies • 40 million professionals and lifelong learners • Scores of governments and agencies • Dozens of certificatio
Slide 8: Key Themes
Key Themes Strength and Consistency Investment in Growth and Infrastructure Operational Excellence
Slide 9: Profile and Progress
Profile and Progre ESS
Slide 10: A Leading Research and Learning Business
A Leading Research and Learning Business Segment Description Revenue Market Organic CTP CTP Digital share position growth margin* share^ % Research Scientific, Technical, Medical Steady Information and 50% Top 3 29% 66% 90% 1-2% Services for Researchers Publishing Books and Growth in digital Referen
Slide 11: A Digital Business
A Digital Business PLATFORM ONLINE RESEARCH ONLINE LEARNING ONLINE EDUCATION PRODUCTS Journals, Online Corporate Learning and Training, Online Graduate Degree Books and Reference Professional Assessment, Test Programs Material, Databases Preparation, Course Workflow PARTNERS 800+ society partners Ce
Slide 12: Market Opportunities and Dynamics
Market Opportunities and Dynamics R&D funding growing 3%+ worldwide; a means of competitive advantage among companies and nations Increases in research article output and usage Growth in online education Growth in digital learning (corporate and individual) Market declines in print
Slide 13: Current Environment
Current Environment • Period of foundational investment; near-term and long-term benefits expected • Steady growth, reliable cash generation, and sustainable “top 3” position in Research, our largest and most profitable business • Continued double-digit growth and sales momentum from Solutions busin
Slide 14: Achieving Our Stated Objectives
Achieving Our Stated Objectives Stated Objective Status Improve organic revenue and 1H revenue up 2% organically; continued strong incremental margin growth in Research; growth in author-funded access; transformative technology invest in technology and acquisition (Atypon) announced, supporting reve
Slide 15: Near-Term Goals
Near-Term Goals 1. Increase top line growth and margin in Research; complete migration to Literatum platform; grow society business and new service revenue through platform; launch new owned journals and grow article output in existing journals; realize continued savings from operating efficiencies
Slide 16: Publishing
Publishing Books and Reference Content and Learning Products for Professionals, Researchers, and Students
Slide 17: Publishing Overview
Publishing Overview Test Preparation and Certification continuing its double-digit growth trajectory. Programs include CFA, CPA, ACT, GMAC, CIA, CFP, FRM, CMT, etc. Strong pipeline of potential new programs. Course Workflow (WileyPLUS) continues to grow in a challenging environment, up 6% YTD and sh
Slide 18: Priorities – Optimize and Rationalize
Priorities – Optimize and Rationalize Refocus Book Portfolio to Drive Performance • Aggressively leverage strategic partnerships, author networks, and editorial expertise • Press our advantage in areas of strength (Business, STEM, franchise authors, partnerships) • Reshape portfolio for value • Alig
Slide 19: Research
Research Scientific, Technical, Medical, and Scholarly Information and Services for Researchers and Professionals
Slide 20: Research Overview
Research Overview Market Wiley Atypon ~2% annual growth Top-3 behind Reed Elsevier Literatum is the most widely used and and Springer Nature; 11% of fully featured online publishing platform Faster growth in global articles; >800 society for the professional and scholarly developing markets and part
Slide 21: Strategic Priorities – Significant Opportunities
Strategic Priorities – Significant Opportunities Grow Article Output (we already have the articles we need) • Wiley publishes only 1/3 of the ~500K articles it receives every year; many of those that do not make the cut are published elsewhere • Invest in authoring and peer review workflow, marketin
Slide 22: Looking Out – 5 Years
Looking Out – 5 Years WHERE WE ARE WHERE WE ARE GOING (ASPIRATIONS) 85% of revenue from sale of content Versatile balance of content and services. Partnerships, including some competitors as valued customers Wiley publishing 11% of world’s articles Wiley plus Atypon = >50% of world’s articles Societ
Slide 23: Solutions
Solutions Learning Services for Enterprises, Professionals, and Students
Slide 24: Solutions Overview
Solutions Overview Online Program Management (48% of revenue) Talent Management (52% of revenue) $4B addressable market in outsourced higher $6B in spending on outsourced talent education services, growing at 10% per year management services, growing at 10% a year Wiley services include OPM ($1B add
Slide 25: Strategic Priorities – Smart Expansion
Strategic Priorities – Smart Expansion Online Program Management – Strong Momentum, Larger Deals, Expanded Offerings • Big win. Recently announced 10-year, multiple program agreement with George Mason • More big wins expected. Strong new partner and program pipeline on horizon • Strategically sun-se
Slide 26: Looking Out – 5 Years
Looking Out – 5 Years WHERE WE ARE WHERE WE ARE GOING (ASPIRATIONS) Online Program Management Education and Career Services Partner, including Talent Management online programs, recruitment and lead generation, learning management services, retention, career services, job boards, assessments, test p
Slide 27: Financials, Investments, and Operational Excellence
Financials, Investments, and Operational Excellence
Slide 28: Characteristics of the Business
Characteristics of the Business Predictable, digital, global, and cash generative Revenue FY16 Financial Strength FY16 Recurring revenue 50% Net Debt to EBITDA <1 Digital revenue 63% Operating Cash Flow Margin* 20% Revenue outside US 50% Free Cash Flow Yield** 6% Current Environment (FY17 ex-Atypon/
Slide 29: Operational Excellence Update
Operational Excellence Update Major Initiatives Reasons Status On-board Atypon and Market-leading platform for the Recently commenced. migrate to Literatum professional and scholarly Migration to be completed in platform publishing industry; $10M in second half of FY18 annual development and mainten
Slide 30: Strong Balance Sheet Enables Investment and Cash Returns
Strong Balance Sheet Enables Investment and Cash Returns 2012 2013 2014 2015 2016 Leverage Peak leverage (2007) at (Net debt to EBITDA) nearly 4x EBITDA; reduced 0.8 0.8 to 1.3x by 2010 0.5 0.5 0.7 Acquisitions ($M) Atypon acquired for 263 $120M in FY17 172 92 55 20 10% CAGR; 22 years of Dividends (
Slide 31: Looking Out – Investments Rolling Off (Expense)
Looking Out – Investments Rolling Off (Expense) Variable (EPS Impact) FY17P ERP Investment ($0.20) Corporate Learning/ ($0.20) Online Program Management Atypon/Ranku ($0.15) Combined Impact ($0.55) Looking ahead: • $25M run rate opex savings in FY18 largely enabled by ERP implementation (half of tha
Slide 32: Looking Out – Investments Rolling Off (Capex)
Looking Out – Investments Rolling Off (Capex) Variable FY14 FY15 FY16 FY17P Cash from Operations $348M $355M $350M Steady ERP and Office Investment ($5M) ($22M) ($50M) Total Capex ($98M) ($108M) ($131M) ($160M) Free Cash Flow $250M $247M $219M Peak Investment Looking ahead: • Strong Cash from Operat
Slide 33: Financial Takeaways
Financial Takeaways • Our foundation of must-have content, strong cash generation, and a top market position remains rock solid • Driving towards significant margin and cash flow improvement as major investments roll off, efficiency gains are realized, Solutions businesses begin to contribute, and P
Slide 34: Summary
Summary
Slide 35: Key Themes
Key Themes Strength and Consistency Investment in Growth and Infrastructure Operational Excellence
Slide 36: Overall Takeaways
Overall Takeaways • Building on 210 years of impact and performance • Stable and growing markets, with must-have content and strong market share • Reliable cash and profit generation • Research in strong position to capitalize on technology • Solutions growth continuing, margins improving • Digital
Slide 37: Wiley Investor Day
Wiley Investor Day Research and Learning Services in the Knowledge Economy January 13, 2017