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Wolters Kluwer — Goldman Sachs Communacopia XVIII Conference 2009
42 slides from Wolters Kluwer's conference presentation, Sep 17, 2009
Slide 1: Goldman Sachs Communacopia XVIII Conference
Goldman Sachs Communacopia XVIII Conference September 17, 2009 – New York Boudewijn Beerkens CFO and Member of the Executive Board
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains forward-looking statements. These statements may be identified by words such as "expect", "should", "could", "shall", and similar expressions. Wolters Kluwer cautions that such forward-looking statements are qualified by certain risks and uncerta
Slide 3: Agenda
Agenda Introduction to Wolters Kluwer Strategic Priorities Highlights of 2009 Interim Financial Performance 2009 Outlook & Summary Goldman Sachs Communacopia XVIII Conference September 17, 2009 – New York 3
Slide 4: Wolters Kluwer
Wolters Kluwer The Professional’s First Choice Provide the information, tools and solutions to help professionals make their most critical decisions effectively and improve their productivity Global information and publishing company Leading positions in core markets: health, tax, accounting, co
Slide 5: The Professional's First Choice
The Professional’s First Choice Provide the information, tools and solutions to help professionals make their most critical decisions effectively and improve their productivity HEALTH CORPORATE & FINANCIAL SERVICES (CFS) Wolters Kluwer Health is the leading global provider Wolters Kluwer Corporate &
Slide 6: Deep Vertical Positions
Deep Vertical Positions Our success results from deep vertical market positions, strong customer insight, and value enhancing solutions Wolters Kluwer Verticals Examples Wolters Kluwer Assets Well established brands Unique market footprint Corporate Lawyers Municipal Banks HR Managers Deep customer
Slide 7: Competitive Context
Competitive Context Wolters Kluwer’s vertical positions provide key advantages in today’s competitive market Wolters Kluwer Strong Positions & Brands Tools New Unmatched Content Free And Media Deep Insights/ Sources Analytics Customer Knowledge Integrated Content & Technology Platforms Rea
Slide 8: Agenda
Agenda Introduction to Wolters Kluwer Strategic Priorities Highlights of 2009 Interim Financial Performance 2009 Outlook & Summary Goldman Sachs Communacopia XVIII Conference September 17, 2009 – New York 8
Slide 9: Executing Wolters Kluwer's Strategy
Executing Wolters Kluwer’s Strategy Building on our core strengths to accelerate growth ■ Expand product ■ Expand into adjacent customer and market 1 2 offerings segments ■ Enhance market Grow Our Capture execution Key Adjacent ■ Extend product suite Leading of productivity tools Positions Markets ■
Slide 10: Capital Allocation
Capital Allocation We are allocating capital to segments we can create the most value for our customers Customer and Shareholder Value Progression Services Margin / Organic Growth % Smart Help lines Tools Consulting Integrated Certification Integrated and learning Solutions software Electron
Slide 11: Our portfolio today reflects this evolution to an information, software and service provider
Our portfolio today reflects this evolution to an information, software and service provider… 2008 Revenue €3,374 million Electronic Revenue as a % of Total 52% 49% 50% 46% 47% Online 42% Print 29% 36% 38% 31% Software Services 20% 15% 03 04 05 06 07 08 08 09 20 20 20 20 20 20 HY HY Goldman Sachs Co
Slide 12: …and will improve revenue growth, profitability and shareholder value
…and will improve revenue growth, profitability and shareholder value Information Centric Information/Software Blend Software/Services < 10% Software 10-40% Software > 40% Software Margin 16-18% Margin 18-22% Margin 22-30% + Retention rate 80-85% Retention rate 85-90% Retention rate 85-90% + Indexed
Slide 13: Health: Point of Care
Health: Point of Care MD and RN Review Ensure procedure is properly documented and coded (ProVation) Surgical Encounter Hospital Administration Arthroscopic image capture Produce Bill for Reimbursement Real time procedure documentation Unplanned secondary procedure documentation Real time billing co
Slide 14: Corporate & Financial Services: Personal Lending
Corporate & Financial Services: Personal Lending Delivery management Electronic signature Print fulfillment Produce, assemble, and Document archival package compliant documents Forms Library Policies and Rules Secure electronic Database delivery Borrower application Track receipt Verifiable audit re
Slide 15: Growing Our Leading Positions
Growing Our Leading Positions 1 Delivered new and enhanced online and software products — Electronic products now represent 50% of total revenue, supporting improved margins and retention rates — LTRE grew online and software revenues by 9% organically Launched enhanced electronic platforms — In
Slide 16: Capturing Key Adjacent Markets
Capturing Key Adjacent Markets 2 Acquired key strategic assets in high growth adjacent markets Global tax and accounting strengthened with strong software acquisitions: — Addison for WK Germany — MYOB in the UK — IntelliTax in the USA In Health, UpToDate, the leader in evidence based clinical
Slide 17: Exploiting Global Scale and Scope
Exploiting Global Scale and Scope 3 Strong growth and expansion in Asia with organic growth of almost 40% in India and 80% in China Expansion of the global risk segment continued globally: — TeamMate contributed to double digit organic growth in the corporate market — The business expanded into
Slide 18: Institutionalizing Operational Excellence with Springboard
Institutionalizing Operational Excellence with Springboard 4 Rationalize non standard and fragment IT Infrastructure, saving 8-12% of MGTP current IT spend + ERP: TAL, Germany, France. Order Management: Health Content Re-engineer and standardize content manufacturing process to support Goal next
Slide 19: Agenda
Agenda Introduction to Wolters Kluwer Strategic Priorities Highlights of 2009 Interim Financial Performance 2009 Outlook & Summary Goldman Sachs Communacopia XVIII Conference September 17, 2009 – New York 19
Slide 20: Half-Year Highlights
Half-Year Highlights Resilient earnings growth, profit margins, and free cash performance despite weak market conditions Ordinary EBITA Margin Diluted ordinary EPS1 18.6% € 0.64 +70 bps 17.9% +€0.01 € 0.63 HY 2008 HY 2009 HY 2008 HY 2009 Free Cash Flow 1 Net Debt/ EBITDA Ratio2 € millions €134 3.2 +
Slide 21: Accomplishments
Accomplishments Steadfast in the pursuit of our long-term strategy to deliver profitable revenue growth Commitment to invest of 8-10% of revenue in new products Next-generation delivery platforms receive wide acclaim including IntelliConnectTM and OvidSP Electronic revenues grew to 52% of tota
Slide 22: Key Performance Indicators
Key Performance Indicators Good earnings growth, profit margins, and strong free cash performance sets the stage for delivery of full-year guidance Half- Half- Full- Year Year Full-Year Year Actual Actual Guidance Actual 2009 2008 2009 2008 Ordinary EBITA margin 18.6% 17.9% ± 20% 20.1% €134 €105 ± €
Slide 23: Revenue Growth
Revenue Growth Key strategic acquisitions contributed to growth while underlying revenue were impacted by economic conditions and challenges in transactional and cyclical product lines Revenue: Half-Year 2009 €1,720 million Revenue: Six Months Ended June 30 € millions 2009 2008 ∆ ∆ CC ∆ OG Legal, Ta
Slide 24: Consolidated Revenue
Consolidated Revenue CFS Sound performance in underlying transactions 5% subscription and other non-cyclical Books revenues, materially in line with the Advertising 9% 3% prior year Pharma Books showed good growth due to Subscription & promomotion strong advanced ordering for the fall Other Non-
Slide 25: Net Acquisition Contribution
Net Acquisition Contribution Prior year strategic acquisitions have contributed to revenue growth and improved profitability Performance in Acquisitions Division Integration Line with Include Segment Complete Expectations Health UpToDate Clinical data to physicians Accountancy software/ MYOB
Slide 26: Ordinary EBITA
Ordinary EBITA Improvement driven by performance of higher margin, online and software products, the contribution of prior year acquisitions and operational excellence programs, including project Springboard Ordinary EBITA: Half-Year 2009 €320 million Ordinary EBITA %: Six Months Ended June 30 2009
Slide 27: Investment Levels in Line with Targets
Investment Levels in Line with Targets The company continues to invest in new products and platforms to support future growth Investments as a % of Investment Initiatives Revenues Pfx.net: next-generation tax 9% 8-10% software platform 8% IntelliConnect: global online 4-6% platform 5% 4% OvidS
Slide 28: Solid Financial Position
Solid Financial Position Net Debt/ EBITDA Free Cash Flow (€ million) 3.2 3.1 2.9 399 405 395 2.6 2.4 ±350 311 2005 2006 2007 2008 2009 HY 2005 2006 2007 2008 2009 2009 Guidance at constant currencies EUR/ USD 1.47 Guidance Autonomous movement in Debt Maturity Profile (€ million) Working Capital (€ m
Slide 29: Free cash flow
Free cash flow Consistent cash flow from operating activities supports investments for future growth Cash Flow From Operating Activities Capital Expenditures € millions € millions 140 512 521 125 485 382 93 79 69 61 11% CAGR 174 196 21% CAGR 2005 2006 2007 2008 2008HY 2009HY 2005 2006 2007 2008 2008
Slide 30: Agenda
Agenda Introduction to Wolters Kluwer Strategic Priorities Highlights of 2009 Interim Financial Performance 2009 Outlook & Summary Goldman Sachs Communacopia XVIII Conference September 17, 2009 – New York 30
Slide 31: 2009 Outlook
2009 Outlook Key Performance Indicators 2009 Guidance Ordinary EBITA Margin Broadly In-line with 2008 Free Cash Flow1 ± €350 million Return on Invested Capital (after tax) ≥ 8% Diluted ordinary EPS1 €1.41 to €1.46 ¹ At constant currencies (EUR/USD = 1.47) Goldman Sachs Communacopia XVIII Conference
Slide 32: Outlook
Outlook Realistic Expectations Confident Outlook Weak market conditions are Resilient first-half sets the stage expected to continue for continued success Subscription portfolio provides Customers will continue to stability carefully evaluate incremental spending for new products Recent ac
Slide 33: Summary
Summary Diversified and resilient portfolio Good progress against strategic goals Growing online and software solutions portfolio Continued investment to ensure long-term success Solid profitability and cash flow Strong financial position Well positioned for the future Goldman Sachs Co
Slide 34: Q&A
Q&A September 17, 2009 – New York Boudewijn Beerkens CFO and Member of the Executive Board
Slide 35: Health Highlights
Health Highlights Significant progress in the division’s performance was achieved in the first-half Clinical Books showed good growth due to strong advanced ordering for the Solutions Pharma fall semester selling season 18% Solutions 27% Medical Research posted strong growth driven by renewal
Slide 36: Health Revenue
Health Revenue Stable subscription and other non-cyclical Revenues: Six months ended June 30th results driven by good renewal rates, offset by (€ millions) 2009 2008 ∆ ∆ CC ∆ OG weaker new product sales Subscription & other Book products restored to growth with stronger non-cyclical 233 183 27%
Slide 37: CFS Highlights
CFS Highlights The division leveraged its brands, strong customer loyalty, and market positions to increase its market share penetration by offering leading full service compliance solutions to its customers Corporate & Legal Services results were impacted by lower Financial corporate formation
Slide 38: CFS Revenue
CFS Revenue Stable subscription and other non-cyclical Revenues: Six months ended June 30th revenue driven by performance of (€ millions) 2009 2008 ∆ ∆ CC ∆ OG representation, banking, securities and Subscription & other insurance products non-cyclical 160 140 15% 0% 0% Corporate & Legal Service
Slide 39: TAL Highlights
TAL Highlights The division continued to strengthen its core leadership position by increasing penetration of its next-generation platforms for information and software including the launch of IntelliConnect TM Tax and Accounting: Good subscription growth in the U.S. and Law & Canada offset by w
Slide 40: TAL Revenue
TAL Revenue Subscription revenues were in line with prior Revenues: Six months ended June 30th year while other non-cyclical revenues, which (€ millions) 2009 2008 ∆ ∆ CC ∆ OG includes bank product transactions and tax Subscription & other form click product lines, were below prior year non-cyclic
Slide 41: LTRE Highlights
LTRE Highlights Revenue results were impacted by cyclical declines in advertising, training and consulting as well as weaker new sales across the Scandinavia business due to economic conditions 3% Belgium France Online and software sales continued to perform well as customers 9% 16% migrated fro
Slide 42: LTRE Revenue
LTRE Revenue Subscription revenues in line with the prior Revenues: Six months ended June 30th year, stable retention sales while other non- (€ millions) 2009 2008 ∆ ∆ CC ∆ OG cyclical products were weaker due to Subscription & other recessionary market conditions non-cyclical 490 484 1% 3% (2%)
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