John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Wiley John & Sons — Investor Day (September 2013)
39 slides from John Wiley & Sons's investor day presentation, Sep 30, 2013
Slide 1: 2013 Investor Conference
WILEY 2013 Investor Conference September 27, 2013
Slide 2: Safe Harbor
Safe Harbor This presentation contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward- looking statements, as actual results may differ materially from those in any forward-looking statements. Any
Slide 3: Agenda and presenters
ae oumrmmary Steve Smith Sa ‘ae |4=Research Steve Miron —, Professional Development Mark Allin Education Joseph Heider Deltak Craig Pines fa Finance and Business Development John Kritzmacher —, WILEY
Slide 4: One of the World's Foremost Knowledge Companies
One of the World’s Foremost Knowledge Companies Research 59% of revenue* Outcomes-Based Learning Certification/Credentialing Job Effectiveness Career Advancement Professional Development 22% of revenue* Education 19% of revenue* EMEA Americas 24% 57 " Asia- Pacific 19% *FY13 revenue - adjusted to ex
Slide 5: Foundational Strengths
Foundational Strengths * Wiley — 206 years of building trust * 1,500 prestigious journal brands ‘+ Recognized authors and leading brands in education and professional * Deltak and Wiley brand equity in online program BRANDS management * Essential knowledge for researchers, professionals, educators a
Slide 6: Enhancing our Base Business
Enhancing our Base Business Continue to digitize base business — Improve margins — Reduce working capital — Grow recurring revenue Digital and services comprised 52% of revenue in Q1 2014 Print books now less than a third of overall revenue Research: confident journal outlook enhanced by near-term o
Slide 7: Transformation to Knowledge-Enabled Services Provider
Transformation to Knowledge-Enabled Services Provider * Move up the value chain to enable improved productivity and outcomesin research, professional, and education markets * Tap into new revenue sources * Build or partner to achieve new capabilities by leveraging existing content, services and rela
Slide 8: Moving up the Value Chain
Moving up the Value Chain Accounting and Finance SSM S1M $2M S8M CFA CPA CMA CPA Institute TestBank Learning Excel —__ —_> — —— Content + Brand + Community + Financial Strength = $16 million in new business model revenue anticipated for FY14, representing 25% of estimated FY14 professional accountin
Slide 9: Challenges Facing Higher Education
Challenges Facing Higher Education Operational Ineffi n for new students (traditional) Pressure on the revenue line Endowments are impacted Reduced alum Real estate constraints Regulatory Culture resistant to change Supply vs. demand orientation Lack of differentiated strategy Return on education in
Slide 10: Higher Education Value Chain
Higher Education Value Chain Core Wiley Offerings Course Materials, Faculty Training, Curriculum Design, Custom Solutions Student Recruitment & Admi 24I7 Student Support, Retention Formal Degree or Credential Analysis of Degree Market Technology Wiley + Deltak WILEY
Slide 11: From Education to Career Advancement
From Education to " Career Advancement eunpor recognition & regulatory advancement compliance & board certs ODisC assessments ODisc coursework . Olndustry & O Networking Dipise assesenneiies Professional Ql Outcomes tracking sework, QoisCcoursework Certifications through Deltak CRM fertificates & |
Slide 12: FY17 Financial Goals
FY17 Financial Goals Attribute Base business* Annual revenue growth % Share of revenue FY14 Estimates Low single-digit 90% FY17 Goals Low single-digit 75% Solutions business** Annual revenue growth % Strong double-digit Strong double-digit Share of revenue 10% 25% Total annual revenue growth % Low s
Slide 13: Research
Research Steve Miron WILEY
Slide 14: Research Snapshot
Research Snapshot * Essential content and services for global research professionals * Top 3 global market position; strong underlying demand — Wiley Online Library: 260m full-text downloads in FY13 — 500K journal article submissions in FY13 (ca. 2m authors) — Strong growth in society business (adde
Slide 15: Growth Drivers and Strategies
Growth Drivers and Strategies ai . , Partnerships and Digital Research Services/Research Lifecycle (Nascent) Acquisitions New society and corporate services (Nascent) Organic, + eLearning, certification, online events Partnerships, Acquisitions + Sponsorship and advertising Wiley Synergies Scientifi
Slide 16: Research Cycle: Pain Points Requiring Business Solutions
Research Cycle: Pain Points Requiring Business Solutions Competitive intelligence PLANNING Grant-writing Insight and decision support Compliance Literature interaction / Wiley Online Library Research planning Data Review _— ——— fo IDEATION ( WILEY ) EXPERIMENTATION \ =i? a Networking Protocols Wiley
Slide 17: Key Opportunities — Digital Research
Key Opportunities — Digital Research Value Added Information Products * Enriched content services to improve speed and accuracy of discovery * Provide Science Solutions * Examples: planning a chemical reaction, identifying a compound, finding a drug target Research Administration * Identifying resea
Slide 18: Professional Development
Professional Development Mark Allin WILEY
Slide 19: Professional Development Snapshot
Professional Development Snapshot * Leading professional content provider Financial Snapshot FY13 * Focus on high-value professional communities ‘Adjusted Revenue $371m with top 3 market share in every category % of total Wiley* 22% - , eas ee * Digital and services as a percentage of revenue “4i-_
Slide 20: Growth Drivers and Strategies
Growth Drivers and Strategies Enabling the transition to a services business Qualifications $ Certification Job search cPD S E & 3 4 = Job matching Career Development Create end-to-end professional development and talent management offering, including online learning for corporations and job matchin
Slide 21: Talent Management
Talent Management A game changer for global economies and businesses and a compelling platform for future growth How do we minimize the How do we select the costof recruitment? best job candidates? RECRUITMENT SELECTION How do wematch people How do ; maximize with roles during a nes ee individual an
Slide 22: Talent Management
Talent Management A game changer for global economies and businesses and a compelling platform for future growth How do we minimize the costof recruitment? How do we select the best job candidates? RECRUITMENT How-do we match people with roles during a restructure? ‘TRANSITION Dowe have the right ca
Slide 23: Education
Education Joe Heider WILEY
Slide 24: Education Snapshot
Education Snapshot * From content to educational solutions * Trusted “Top 5” education publisher with strong global reputation for quality * Focused on high demand ‘STEM’ and business disciplines —sciences, technology, engineering, math, accounting and finance, etc. * Deep relationships and partners
Slide 25: Growth Drivers and Strategies
Growth Drivers and Strategies Education Services: Move up the value chain to deliver new services to students, instructors, and institutions in areas of education, credentials and employment + Institutions: Services and Business Models for Development and Growth Atrusted partner for academic institu
Slide 26: Education Transformed
Education Transformed Global Education * Servicing the entire value chain eInstitutions Students Solutions Faculty * Corporations Deltak * Institutional model Online Program Management ahr omen agnostic ° High Growth echnology products and services © Faculty-centric Base Individual courses Adoption
Slide 27: Craig Pines
Craig Pines WILEY
Slide 28: Deltak Snapshot
Deltak Snapshot ~200-300 US schools are working with online program management Market Opportunity providers, with an additional 500 considering doing so in the near term. Sector revenue estimated at $350m-$400m, growing 20-25% Deltak provides online program management services for university partner
Slide 29: University Partnership Overview
University Partnership Overview Deltak University Market Program | Assessment : Enrolment . Development & Recruitment) Coordination] Retention Instruction Graduation Marketing Specialist [aneueed Instructional | _ Course Design | ‘Production Partner Program Breakout chang Design Fan Psychology. 4% r
Slide 30: University Partner Economics
University Partner Economics New partners require upfront investment (“$250K to $800k) Typically takes six to nine months to develop a program and begin generating revenue Cumulative investment payback typically occurs after six to eight revenue generating quarters and 200 to 250 students Plan is to
Slide 31: Deltak Growth Strategy
Deltak Growth Strategy Growth Strateg' Expand Enroliments in Existing Partners Add New Programs at Existing Institutions Enter New Institutional Partnerships Launch New Revenue Generating Services —— initiated in 2010 + Expanded agreement to include up to 15 additional programs over 5 years + Progra
Slide 32: Finance and Business Development
Finance and Business Development John Kritzmacher WILEY
Slide 33: Financial Profile
Financial Profile Adjusted Revenue? Adjusted EPS? Research mProfessional mi Education $2.85 $3.12 $2.92 $2,000. 534 $1611 $1,619,710 $1,715 $3.00 $2.44 = $2.07 $1,500 $2.00 $1,000 $1.00 $500 go jo $0.00 _ a Fyo9 FY10 FY11 FY12 FY13 FYO9 FY10 FY11 FY12 FY13 Free Cash Flow Net Debt/EBITDA $300 5 $270
Slide 34: FY14 Outlook
FY14 Outlook Outlook Reaffirmed after Q1 FY14 ¢ Low single-digit adjusted revenue growth * Adjusted EPS of $2.85-— $2.95 (essentially flat vs. FY13) Key Operational Drivers * Growth primarily driven by higher journal revenue and transformational acquisitions CY13 journal subscription billing growth
Slide 35: Restructuring Initiative
Restructuring Initiative Other * US Pension closed/ frozen Corporate-wide actions * Organization consolidation and simplification * Process optimization * Portfolio rationalization Technology * Outsourcing * Rationalization and decommissioning of legacy applications Restructuring Goals + $80 million
Slide 36: Acquisition Outlook
Acquisition Outlook Successful track record with acquisitions — Blackwell in 2007 (~$1B) — Inscape, Deltak and ELS in 2012 (~$330M) Transformation built around developing and acquiring essential assets Strong balance sheet enables considerable capacity for transformation investment Near-term emphasi
Slide 37: Returns to Shareholders
Returns to Shareholders Stock Performance Dividend Growth 48.48 13% > $50 : s SAE00 $45.89 oe 2 86 $39.70 ° $1.00, — 34.84 4 +31% ® . go.s2 0-5 $25 f 9/15/2009 9/15/2010 9/15/2011 9/15/2012 9/15/2013 $0.00 FYo9 FY10 FY11 FY12 “13 June 2013: quarterly dividend increased to $0.25 Share Repurchases FYo
Slide 38: FY17 Financial Goals
FY17 Financial Goals Attribute Base business* Annual revenue growth % Share of revenue FY14 Estimates Low single-digit 90% FY17 Goals Low single-digit 75% Solutions business** Annual revenue growth % Strong double-digit Strong double-digit Share of revenue 10% 25% Total annual revenue growth % Low s
Slide 39: 2013 Investor Conference
WILEY 2013 Investor Conference September 27, 2013