John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Investor Day (September 2015)
35 slides from John Wiley & Sons's investor day presentation, Sep 25, 2015
Slide 1: 2015 Investor Conference
2015 Investor Conference September 25, 2015
Slide 2: Forward Looking Statements
Forward Looking Statements 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
Slide 3: Agenda
Agenda Introduction Research Journals Mark Allin, President & CEO Publishing Jeffrey Sugerman, EVP, Talent Solutions Solutions and Educational Services Strategic Investment John Semel, Chief Strategy Officer Financial Performance John Kritzmacher, CFO & EVP, and Outlook Technology and Operations Q&A
Slide 4: Introduction
Introduction Mark Allin
Slide 5: Driving the Global Knowledge Economy
Driving the Global Knowledge Economy Investment in skills Value to the world Professional Higher-level development Knowledge Economy employment skills …An increasingly knowledge- driven global economy has made high-quality tertiary education more important than ever before. Science & The imperative
Slide 6: The Business of Knowledge and Learning
The Business of Knowledge and Learning Research Journals Publishing Solutions 48% revenue 42% revenue 10% revenue Subscriptions Research Reference Online Programs* Funded Access Professional Practice Corporate Learning* Content Licensing Course Material Assessment* Articles Sales Databases Backfiles
Slide 7: College and Career Value Chain
College and Career Value Chain Higher Ed Career Employee Pre-Hire Post-Hire Professional Institutional Readiness, Recruiting Screening Assessments Development Services Advancement Wiley Businesses Online Program Employee Development Corporate Management Assessment Assessment Learning Customers Uni
Slide 8: Key Initiatives
Key Initiatives Improve organic revenue and margin growth in journals Integrate publishing businesses, focus on portfolio strengths, and realign cost base to revenue profile Continue to expand and/or acquire solutions businesses to bridge gap between education and employment Implement competitive be
Slide 9: Research Journals
Research Journals Mark Allin
Slide 10: Journal Snapshot
Journal Snapshot • Wiley is one of the top 3 journal providers in the world – Wiley is a premier provider of some of the most prestigious and must-have research content • 1,600 journal brands; 800 society partners • Over 80% of journal revenue is recurring; 85% digital Corporate Government, 6% Other
Slide 11: Current Market Environment
Current Market Environment • Surveys show library spending on journal subscriptions expected to grow modestly (+1%); Funded Access expected to grow by double digits • Underlying demand remains robust: – Global article output growing at 5% annually – R&D investment growing steadily worldwide – Journa
Slide 12: Key Objectives
Key Objectives Drive revenue growth • Grow market share of articles and usage in core subscription • Strengthen and expand library market share (launch business database model) • Maintain strong growth of author-funded access Grow revenue adjacent to • Develop digital author services/revenues the co
Slide 13: Publishing
Publishing Mark Allin
Slide 14: Publishing Snapshot
Publishing Snapshot Key Franchises and Brands Publishing Focus → Focus on market sectors with the greatest skills demand and potential for growth → Transform our traditional business to digital solutions while maintaining profitable publishing activities Weygandt/Kieso/Kimmel Key Content Categories
Slide 15: Current Market Environment
Current Market Environment • Book market remains challenged in several areas, but franchises and high-profile titles performing well • Unique content still highly valued by customers – scientists, students, and professionals – and new formats are emerging • Book content valuable to knowledge solutio
Slide 16: Reinventing Publishing: Course Workflow
Reinventing Publishing: Course Workflow Content-Enabled Services • Strong growth trends evident with students shifting away from traditional textbooks and institutions encouraging outcomes-based learning • Key actions include course expansion of WileyPLUS Learning Space; launch of fully adaptive & c
Slide 17: Reinventing Publishing: Online Test Preparation
Reinventing Publishing: Online Test Preparation Content-Enabled Services • Test preparation a $14B global market – CPA/CFA exam growth of 10-15% – Record number of CPA candidates this past year (IMA) – 40% of CPA candidates and 76% of CFA candidates are international ge • Wiley is seeing strong mome
Slide 18: Key Objectives
Key Objectives • Focus investment on key franchises and brands Sharpen content • Optimize size and scope of categories and programs portfolio • Target most attractive customer segments • Deliver content across alternative formats Leverage content and • Continue to expand existing learning solutions
Slide 19: Solutions
Solutions Jeffrey Sugerman
Slide 20: Solutions Snapshot
Solutions Snapshot Wiley is bridging the gap between education and employment with solutions that improve teaching and learning (Online Program Management) and workforce learning and management (Corporate Learning, Pre-Hire, and Post-Hire Assessment) Online Program Pre-Hire Corporate Assessment- Man
Slide 21: Online Program Management
Online Program Management Market Opportunity Wiley Momentum US market for OPM services estimated at Significant momentum in signing larger $1.1B growing to $2.2B by 2020* partnerships with national institutions Demand from universities remains Selective and deep dive approach; focus robust; high-pro
Slide 22: Talent Management Opportunity
Talent Management Opportunity Wiley participates across the talent management value chain, reaching corporate buyers directly and through hundreds of value-added resellers Corporate Training & Pre-Hire Screening Post-Hire Assessments Professional Development Profiles International EVERYTHING DiSC Cr
Slide 23: Talent Solutions
Talent Solutions Market Opportunity Wiley Momentum Market growth of 10%-15% with total Strong customer momentum in market spend close to $15B covering e- Corporate Learning, particularly in US learning, assessments, software and digital (investment required to build these learning materials (US onli
Slide 24: Corporate Learning Opportunity
Corporate Learning Opportunity • Products include managerial and leadership skills assessments, courses, certifications, content, and executive training programs for global enterprises delivered over a cloud-based Learning Management System (LMS) platform • Europe largest market; strong US entry • U
Slide 25: Strategic Investment
Strategic Investment John Semel
Slide 26: Strategic Focus
Strategic Focus Wiley has considerable leverage and capacity to add meaningful acquisitions (0.7x net debt to EBITDA at the end of last fiscal year) Significant opportunity exists in the ability to bridge education, credentialing, and employment, in everything from higher education institutional ser
Slide 27: College and Career Value Chain
College and Career Value Chain Higher Ed Career Employee Pre-Hire Post-Hire Professional Institutional Readiness, Recruiting Screening Assessments Development Services Advancement $3B $0.5-$1B $9B $1B $1.5B $9.5B Career Fit Development Courseware OPM Job Boards Services Assessments Assessments by Ve
Slide 28: Financial Performance and Outlook
Financial Performance and Outlook John Kritzmacher
Slide 29: Recent Performance
Recent Performance Adjusted Revenue → Revenue growth from Research Journals $1,822 and solutions acquisitions $1,800 $1,775 → Earnings improvement from low single- $1,715* +4% +4% digit organic revenue growth and broad- $1,700 based cost reductions, partly offset by investment in rapidly growing bus
Slide 30: FY16 Outlook
FY16 Outlook Metric FY16 Operational Revenue Growth % Low Single-Digit - Excluding impact of time-based journal agreements ($35M) - Excluding FX impacts Not estimated Operational EPS Growth Flat - Excluding impact of time-based journal agreements ($0.35) - Excluding FX impacts Not estimated - Includ
Slide 31: Achievement of Cost Benchmarks
Achievement of Cost Benchmarks • Planning and actions underway to achieve competitive cost Technology benchmarks for shared services 50% Finance • Initial savings will come from 25% Technology, Finance, and Distribution and Operations, with ERP being a key enabler • Anticipate FY18 run-rate savings
Slide 32: FY17 Goals: What's Changed?
FY17 Goals: What’s Changed? Attribute Original FY17 Goal What’s Changed? Base content business Low single-digit Revenue growth % 75% Share of revenue Book sales lower than expected Solutions business Strong double-digit Revenue growth % Slower pace of acquisitions 25% Share of revenue Adjusted reven
Slide 33: Capital Allocation
Capital Allocation FY15 FY15 FY08 Free Cash Flow Net debt-to-EBITDA Historical Peak Leverage $247M 0.7x 4x Dividend Growth +11% Cash Spend Priorities $0.40 $0.29 $0.30 Use FY15 Spend $0.30 $0.24 $0.25 $0.20 Acquisitions $172M $0.20 Repurchases $62M $0.10 Dividend $68M $0.00 • Significant capacity ex
Slide 34: Summary
Summary Confident and steady outlook for journals business and the cash flow it generates; strong growth momentum for solutions businesses; challenges in certain book categories but plan in place Investing for the intermediate and long term (high growth opportunities, new markets, ERP deployment, of
Slide 35: Q&A
Q&A