Wolters Kluwer N.V. · EURONEXT:WKL
Wolters Kluwer — Investor Day (September 2006)
44 slides from Wolters Kluwer's investor day presentation, Sep 27, 2006
Slide 1: Time to Grow
Legal, Tax & Regulatory Europe Division Day Time to Grow September 27, 2006 — Amsterdam Rolv Eide Chief Executive Officer Forward-Looking Statements This presentation contains forward- forward-looking statements. These statements may be identified by words such as "expect", "should", "could", "shall
Slide 2: Agenda
Agenda LTRE Within Wolters Kluwer LTRE: Catalyst for Change LTRE Vision and Strategy Summary and Q&A Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 3 This month marks the three-year anniversary since we embarked on the journey of transforming LTRE Significant pr
Slide 3: LTRE Division enjoys a broad European presence
LTRE Division enjoys a broad European presence Key Key Facts Facts — — 2005 2005 Operating Operating in in 18 18 European European countries countries Revenues: Revenues: €1.292 €1.292 mln mln Ordinary Ordinary EBITA: EBITA: €193 €193 mln mln Employees: Employees: 7,051 7,051 Legal,
Slide 4: Operating in large markets with steady growth
… Operating in large markets with steady growth … Core Markets Size and Growth Rates Core Markets Size and Growth — by Geography Rates — by Customer Segment Estimated Core Annual Core Market Size Market Growth (€ mln) Rate (2006-2009) Estimated Core Annual Core Market France 700-750 2-3% Market Size
Slide 5: Unparalleled penetration; market drivers play to LTRE's strengths
… And unparalleled penetration Wolters Kluwer Belgium Market Share and Penetration (2005) Market Penetration1 Share Ability to increase wallet share Law firms 42% 52% through cross and up-selling T&A firms 23% 70% Improved customer knowledge Public 25% 54% to drive higher retention In Company
Slide 6: In 2003, LTRE faced the challenge to drive growth
Agenda LTRE Within Wolters Kluwer LTRE: Catalyst for Change LTRE Vision and Strategy Summary and Q&A Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 11 In 2003, LTRE was faced with the challenge to drive growth across multiple parts of its portfolio … LTRE Revenues
Slide 7: Requiring further growth in on-line revenues
… Requiring further growth in on-line revenues … LTRE Revenues by Media Format as a Percentage of Revenues 55% 12% 25% 8% 2003 Online Other Electronic Services Print Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 13 … And creating a clear need for a transformation … LTRE
Slide 8: Management took aggressive actions to restore performance
LTRE management took aggressive actions to restore performance and transform the business LTRE Catalyst for Change — “How” Actions Taken In 2003 and 2004 Launch of Fix and Transform in 2005 Re-organized LTRE and strengthened management team Overarching program to drive structure complete transfo
Slide 9: Customer centric organization; clear evidence of success
Driving this transformation is a customer centric organization CEO R. Eide Italy Italy … NL NL CEO P. Morley … CEO CEO Strategy D. Treu P. Morley CFO CFO P. Kharas CFO … CFO CFO Community CPO BU BU BU BU Fiscal/ Govern- CPO Legal Companies R. CPO … CPO CPO Community S&M Financial ment Mesotten S&M H
Slide 10: Performance improvement of the division
… As demonstrated by the performance improvement of the division LTRE Revenues and Organic Growth LTRE Ordinary EBITA Margin (€ mln) (%) 16,5 15,0 14,2 1.298 1.292 1.344 Organic growth guidance: 0-1% - 0,5% 2004 2005 2006 - 1,6% 2004 2005 2006 Revenues Organic Growth Rate Legal, Tax & Regulatory Eur
Slide 11: LTRE Vision remains The Professional's First Choice
Agenda LTRE Within Wolters Kluwer LTRE: Catalyst for Change LTRE Vision and Strategy Summary and Q&A Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 21 LTRE Vision remains The Professional’s First Choice Provide information, tools and solutions to help professional
Slide 12: LTRE's Growth Strategy: accelerated, profitable growth
LTRE’s Growth Strategy: deliver accelerated, profitable growth going forward 1 2 Grow our Capture Leading Key Positions Adjacencies 4 3 Institutionalize Exploit Operational Global Scale Excellence And Scope Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 23 1 2 Grow our Ca
Slide 13: Grow our leading positions
Grow our leading positions Strategic Initiatives Move from offering individual products to integrated, modular, customer-centric product suites Continue to drive strong innovation processes and capabilities Implement best-in-class sales and marketing capabilities Legal, Tax & Regulatory Europe
Slide 14: Customer-centric product suites — Example Italy: Suite LaLegge
Customer-centric product suites — Example Italy: Suite LaLegge Content Database Cases Allows user to search for Allows users to structure and content regarding a specific retrieve all information related topic in legal research to a case including activities, databases e.g. Company Law, documents, c
Slide 15: Sales and marketing capabilities
… As well as its sales and marketing capabilities Sales and Marketing Imperatives Strengthen Sales culture Profitable Growth Sales Focus Productivity on Optimize channel mix Competition Increase productivity Customer Improve Sales & Marketing and reduce churn Focus Objectives Retention Results
Slide 16: Capture key adjacencies
Capture key adjacencies Strategic Initiatives Offer new product concepts through innovation Reach out for new customers Expand into new markets Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 31 We will selectively step beyond our core to adjacent markets Roll-out
Slide 17: Exploit global scale and scope
1 2 Grow our Capture Leading Key Positions Adjacencies 4 3 Institutionalize Exploit Operational Global Scale Excellence And Scope Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 33 Exploit global scale and scope Strategic Initiatives Roll out global product concepts Le
Slide 18: Global concepts: nurturing deep verticals across Europe
Global concepts: nurturing deep “verticals” and replicating them across Europe Customer-Centric Verticals … … Replicated Across Europe Civile, monKEY.be commerzio Codice books online Customer roadmaps research Le Società Tax / Accounting Belgium journal Online Product Models and Platform SoR
Slide 19: Operational Excellence
1 2 Grow our Capture Leading Key Positions Adjacencies 4 3 Institutionalize Exploit Operational Global Scale Excellence And Scope Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 37 Legal, Tax & Regulatory Europe Division Day Operational Excellence September 27, 2006 — Amst
Slide 20: Embedding capabilities to drive operational excellence
1 2 Grow our Capture Leading Key Positions Adjacencies 4 3 Institutionalize Exploit Operational Global Scale Excellence And Scope Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 39 Embedding capabilities to drive operational excellence will further support profitable growt
Slide 21: A recap on what has been accomplished
A recap on what has been accomplished Designed and implemented a common Finance architecture Process Established Human Resources management structure and improvements processes Initiated design of a common Sales & Marketing structure Established European Technology Centre Consolidation Est
Slide 22: We optimized all aspects of the supply chain
We optimized all aspects of the supply chain For example: Reduction of paper Approach impacts suppliers from 179 to 14 Reduction of printers business processes from 153 to 56 Requires significant Supply base change management optimization efforts Demand Process rationalization alignment For
Slide 23: Explore outsourcing / near-shoring / off-shoring opportunities
Explore further outsourcing / near-shoring / off-shoring opportunities Editorial Cost Base (2005) Typical Labor Costs Off-shore India 25% Technical Core Editorial Editorial South East Asia 23% Northern Africa 21% Conversion Near-shore DB Structuring Romania 29% Supply Chain Management Poland 31% Oth
Slide 24: Sales & Marketing Go-to-Market
Specific Initiatives going forward Implement global online platform Implement European software development framework Technology Harmonize Content structure and life cycle management Enhance the European Technology Centre operations Leverage on central SAP implementations Rationalize dem
Slide 25: LTRE Sales & Marketing Objectives
LTRE Sales & Marketing Objectives Profitable Growth Sales Focus Productivity on Competition Customer Improve Sales & Marketing Retention Focus Objectives Results Build Channel Strong Optimization Sales Strategic Culture Capability Investments Legal, Tax & Regulatory Europe Division Day September 27,
Slide 26: Customer Focus = Success
Segmentation Focus Knowledge Intimacy Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 51 Customer Focus = Success Customer Focus Sales & Marketing Objectives Segmentation Improve Coverage Model Data Driven Segmentation Focus Understanding and Exceeding Deep Vertical Knowle
Slide 27: Improved Retention Results
Improved Retention Results Sales & Marketing Improve Retention Objectives Results Key Success Drivers Increased customer intimacy and knowledge Products that meet customer needs Solutions that integrate into customers’ workflow LTRE has improved retention rates by 3 percentage points in the la
Slide 28: Public Tenders
1. Public Tenders Public Tenders Why focus on Tendering? — Government procurement represents 15% of EU GDP — Increasing and complex market which plays to WK’s strength — I2010 e-government : encouraging e-learning and online content — Stable market less depending upon private economy — Reputation
Slide 29: (Key) Account Management
(Key) Account Management 3. (Key) Account Management Structural development of our client relationships Greater insight into managing existing clients Leading our clients’ thinking Analyzing client needs to provide value added solutions Account planning system to ensure we retain client lo
Slide 30: Kluwer On-line Strategy
Build Strong Sales Culture Sales & Marketing Objectives Build Strong Sales Culture Courage, Confidence, Customer Focus Expertise, Risk Taking, Teamwork & Collaboration Trust & Integrity, Open Communication, Pride & Passion Customer Knowledge, Celebrate Successes Creating Lasting Customer, Shareholde
Slide 31: Setting the scene
Setting the scene Corporate objectives 2004-2006 — Bring cost in line with revenue — Increase in ebita margin, increase by 3% over the period — Reengineer publishing infrastructure to better cope with multimedia — Drive internet migration Fix & Transform Focus on: — Increasing value proposition
Slide 32: Customer information needs and media formats
The customer has a variety of information needs and different media formats News Reference Topicality value value Time-zone t1 t2 t3 News value Start Publication stage Topicality Start Publication stage Reference Start Publication value stage Legal, Tax & Regulatory Europe Division Day September 27,
Slide 33: Navigator online migration
Navigator online migration to provide single source content and workflow tools to customers From To Current Situation Navigator Proposition Customized Offering Individual Online Navigator Product Per Customer Segment Products Product Product DD Customer Segment 1 Interface Interface Product “ABC” CC
Slide 34: Navigator is the anchor proposition
Navigator Pro Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 67 Navigator is the anchor proposition for new business opportunities Focus Kluwer supports professionals in their knowledge processes Navigator Presentation Layer Kluwer shifts from a traditional publisher
Slide 35: Navigators for each segment
Navigators for each segment Public Private Core to the subject Education Companies Central Decen- tral Semi- govern-ment government govern-ment Fin. Services Edu-cation Edu-cation Bank & Insur. Notaries Trade unions Univ. HBO man. Industry Health Services Transport Trade Building Law Firms Audit & T
Slide 36: Online revenues potential by account class
Online revenues potential, both named and non named accounts Propositions: Kluwer 1 Custom-made Navigator: growth # # Spend per through extra functionalities revenue class Professionals professional — Navigator Pro: content Accounts integration + portal x 1000 in Euro — Add-ons: content packages for
Slide 37: WK Italy Integrated Solution Strategy
Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 73 Legal, Tax & Regulatory Europe Division Day WK Italy Integrated Solution Strategy September 27, 2006 — Amsterdam Donatella Treu CEO WK Italy
Slide 38: Setting the scene: WK Italy
Setting the scene Corporate objectives — Increase in revenue and above all — Increase in EBITA margin (in 2003: 10% -> in 2006: above WK average) WK Italy customer base and product portfolio — Market penetration in core markets - Fiscal 65%, Legal 80%, Employment law 64% — ‘Normal’ Market segmen
Slide 39: New product development: (re)thinking
NDP:Idea ÎProject Brief ÎProject Initiation Document ÎProject ÎTestÎProduct external drivers Internal drivers ‘brainstorm’ check market data strategy check market research back office check ‘(re)thinking’ idea - concept customer intimicy competition pricing branding sales channels promotion ‘formali
Slide 40: Iter versioning strategy
Iter Legal, Tax & Regulatory Europe Division Day September 27, 2006 — Amsterdam 79 Versioning strategy “Big” 2002 2003 2004 2005 LE 2006 % of total 6% 20% 34% % of total 16% 27% 28% 29% % of total 100% 84% 67% 52% 37% Total % of total 100% 100% 100% 100% 100% sales increase % 17% 20% 21% 21% % incre
Slide 41: Suite LaLegge
Suite LaLegge Content Database Cases Allows user to search for Allows users to structure and content regarding a specific retrieve all information related topic in legal research to a case including activities, databases e.g. Company Law, documents, client data, Bankruptcy, Contract Law etc. expense
Slide 42: Suite LaLegge: how it works
Suite LaLegge: how it works He activates a search in the databank and at the same time The lawyer is preparing a request for his client Bianchi and he activates the timer that will register how much time he he has to indicate what kind of jurisprudence and doctrines spends on this activity. In the m
Slide 43: Online concept: My virtual office
Online concept: My virtual office Libraries Libraries Data Data Banks Banks Extranet Extranet client client 11 Instant Instant e-learning e-learning My My customers customers Extranet Extranet client2 client2 Newsletters Newsletters My My Data Data Updating Updating E-learning E-learning D&B D&B My
Slide 44: Time to Grow
Legal, Tax & Regulatory Europe Division Day Time to Grow September 27, 2006 — Amsterdam