John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Q2 2020 Earnings Presentation
23 slides from John Wiley & Sons's earnings presentation, Dec 4, 2019
Slide 1: Second Quarter 2020 Earnings Review
Second Quarter 2020 Earnings Review December 4, 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: Executive Summary
Executive Summary Brian Napack, President and CEO
Slide 4: Driving the world forward with Research and Education
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 Research Publishing & Academic & Education Platforms Professional Learning Services • Gro
Slide 5: Driving the world forward with Research and Education: Global Network
Driving the world forward with Research and Education 10,000+ 600+ 60+ 1,000+ Research Scientific Service partner Corporate institutions societies universities partners WILEY RESEARCH GLOBAL NETWORK WILEY EDUCATION 4M+ 16M+ Millions Millions Society Researcher Students Professionals members audience
Slide 6: Second Quarter Key Takeaways
Second Quarter Key Takeaways Revenue GAAP EPS Adj. EPS Adj. EBITDA +5%* +4% -1%* +3%* $466M $0.79 $0.85 $110M • Strong revenue growth and improved profitability in Research and Education Services • Academic & Professional Learning down on market-driven declines in book publishing • Investments gaini
Slide 7: Research Publishing & Platforms
Research Publishing & Platforms Solid revenue and earnings growth; favorable market fundamentals • Revenue growth (+4%) driven by increased publishing volume Revenue +4% • Research publishing demand strong, with steady growth in articles $235M submitted and content usage • CY20 society publishing ne
Slide 8: Enhancing our value proposition for researchers
Enhancing our value proposition for researchers Delivering new tools and support services for an enhanced researcher experience September October November Research Research Author Author Filtering Tool Insights Platform Collaboration Platform Promotion Services Researcher Community Days to Publish 1
Slide 9: Academic & Professional Learning
Academic & Professional Learning Market-driven declines in book publishing; shifting courseware investment to high-demand careers • Declines due to weak market conditions in book publishing Revenue -5% • Growth in test prep and corporate training $178M • zyBooks and Knewton integrations on track Adj
Slide 10: Sharpening focus to addressing challenges in Academic & Professional
Sharpening focus to addressing challenges in Academic & Professional Challenges Responses • Continued declines for traditional book • Publish to high-demand disciplines, skills and publishing careers • Reduced willingness to pay for non-essential • Shift to must-have digital courseware content in hi
Slide 11: Education Services
Education Services Strong revenue growth and EBITDA improvement • Revenue performance from strong organic growth and inorganic contribution Revenue from Learning House (acquired Q3 Fiscal 2019) +80% $54M • Robust growth in targeted service offerings, international online programs, and career credent
Slide 12: Building momentum beyond OPM core
Building momentum beyond OPM core Wiley Education Services Offerings Full OPM Targeted Service International Career Credentialing Services Offerings Programs Services 90% of Revenue 10% of Revenue Low-to-mid teens growth Strong double-digit growth 12
Slide 13: Financial Summary
Financial Summary John Kritzmacher, CFO and EVP, Operations 13
Slide 14: Second Quarter 2020 Summary
Second Quarter 2020 Summary $0.76 $0.79 $0.89 $110 $466 $107 $449 $0.85 Q2’19 Q2’20 Q2’19 Q2’19 Q2’20 Q2’19 Q2’20 Q2’20 Revenue GAAP EPS Adjusted EPS Adjusted EBITDA +5%* +4% -1%* +3%* Revenue at constant currency Includes $0.07 of favorable and excluding impact of variance impact from acquisitions
Slide 15: First Half 2020 Summary
First Half 2020 Summary $890 $1.21 $1.31 $177 $860 $168 $1.06 $0.85 1H’19 1H’20 1H’19 1H’19 1H’19 1H’20 1H’20 1H’20 Revenue GAAP EPS Adjusted EPS Adjusted EBITDA +5%* -30% -18%* -5%* Revenue at constant currency Includes $0.15 of unfavorable and excluding impact of variance impact from acquisitions
Slide 16: Free Cash Flow and Return to Shareholders
Free Cash Flow and Return to Shareholders Free Cash Flow • YTD Operating Cash Flow improvement +$17M, 1H19 1H20 Change Free Cash Flow +$7M; historically a use of cash in first half of fiscal year ($163M) ($156M) +$7M • Modest leverage and strong liquidity position Net Debt / EBITDA at 1.8, inclusive
Slide 17: Full Year Outlook Reaffirmed
Full Year Outlook Reaffirmed FY19 Actual FY20 Outlook* Revenue $1.80B $1.855B-$1.885B Adjusted EBITDA $388M $357-$372M Adjusted EPS $2.96 $2.35-$2.45 Free Cash Flow $149M $210M - $230M *Outlook is at constant currency (reflecting FY19 average exchange rates) and includes contributions from to-date a
Slide 18: Second Quarter 2020 Summary
Second Quarter 2020 Summary • Strong revenue growth and improved profitability in Research and Education Services • Academic & Professional Learning down on market-driven declines in book publishing • Investments gaining traction in key strategic areas — Research: increasing publishing volume and op
Slide 19: Driving Shareholder Value
Driving Shareholder Value ✓ Favorable long-term market fundamentals ✓ Momentum across key areas of the business ✓ High recurring, predominantly digital revenue ✓ Strong balance sheet and cash flow ✓ Consistent record of cash returned to shareholders 19
Slide 20: Thank you for joining us
Thank you for joining us Replay of October Investor Day available on wiley.com>About Us>Investors Contact for follow-up: brian.campbell@wiley.com 201.748.6874 20
Slide 21: Appendix
APPENDIX WILEY
Slide 22: Appendix: Reconciliation of GAAP EPS to Non-GAAP Adjusted EPS
Appendix GAAP Earnings Per Share - Diluted Adjustments: Restructuring and related charges (A) JOHN WILEY & SONS, INC. ‘SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF GAAP EPS to NON-GAAP ADJUSTED EPS - DILUTED (unaudited) Foreign exchange losses (gains) on intercompany transactions (A) Non-GAAP Adj
Slide 23: Appendix: Reconciliation of GAAP 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) Three Months Ended Six Months Ended October 31, October 31, 2019 2018 2019 2018 Net Income $ 44,680 43,784 48,314. $ 70,079 Interest expense 6,787 3,608