John Wiley & Sons, Inc. · NYSE:WLY
John Wiley & Sons — Q3 2023 Earnings Presentation
22 slides from John Wiley & Sons's earnings presentation, Mar 9, 2023
Slide 1: Third Quarter Fiscal 2023 Earnings Review
ENABLING DISCOVERY | POWERING EDUCATION | SHAPING WORKFORCES Third Quarter Fiscal 2023 Earnings Review March 9, 2023
Slide 2: Safe Harbor Statement and Non-GAAP Measures
SAFE HARBOR STATEMENT NON-GAAP MEASURES This presentation contains certain forward-looking statements In this presentation, management provides the following non-GAAP concerning the Company's operations, performance, and financial performance measures: condition. Reliance should not be placed on for
Slide 3: Wiley unlocks human potential by powering scientific research and career-connected education
Wiley unlocks human potential by powering scientific research and career-connected education
Slide 4: Third Quarter Summary
Third Quarter Summary Revenue and earnings performance weighed down by market headwinds in Academic and a publishing pause in the Hindawi “special issues” program Core of Research and Talent remain strong, with consistent strategies aligned with favorable long-term trends driving the knowledge econo
Slide 5: Organizing Around Our Customers
Organizing Around Our Customers WILEY RESEARCH WILEY EDUCATION Connecting research to innovation outcomes Connecting learning to career outcomes Segments RESEARCH ACADEMIC TALENT % of Wiley Revenue* 54% 34% 12% EBITDA Margin* 34% 18% 21% Research Publishing Academic Publishing Talent Development Lin
Slide 6: Third Quarter Performance
Third Quarter Performance Revenue* GAAP EPS** Adj. EPS Adj. EBITDA -2% -$1.92 -9% -3% $491M ($1.29) $0.85 $98M All variances at constant currency except GAAP EPS *Q3 organic revenue at CC -3% **GAAP EPS mainly due to impairment charges totaling $1.69 and restructuring and other charges totaling $0.1
Slide 7: Market Headwinds
Market Headwinds Consumer Pullback Inventory Correction Enrollment Pressures University Budgets Reduced discretionary Sharp reductions in Historically low Financial pressure on spending driving lower inventory by key online unemployment with institutions causing demand for academic retailer causing
Slide 8: Research – Hindawi Special Issues Pause
Research – Hindawi Special Issues Pause • Identified misconduct in Hindawi special issues involving compromised articles • Team responded quickly, temporarily suspending the fast-growing Hindawi special issues publishing program and implementing preventative measures • Projected impact to our Fiscal
Slide 9: Research Commitments
Research Commitments FY23 Initiatives Q3 Update Submissions and publishing output down 7% primarily due to publishing pause of Drive publishing growth Hindawi special issues. YTD submissions up 2% and output down 4%; YTD OA to meet global demand submissions and output excluding Hindawi up 10% and 4%
Slide 10: Education Commitments
Education Commitments FY23 Initiatives Q3 Update Expand corporate client base Signed 5 multinational corporate clients across verticals - energy, consumer staples, for talent development information services, and financial services. Total of 14 new signings year-to-date. Signed certification partner
Slide 11: Segment Performance, Outlook, Simplification Plans
Segment Performance Outlook Simplification Plans
Slide 12: Research
Research (millions) Q3 2023 Change Change CC Research Publishing $214 (5%) (3%) Research Solutions $40 3% 6% TOTAL REVENUE* $254 (4%) (1%) ADJUSTED EBITDA $80 (7%) ADJ. EBITDA MARGIN 32% ▪ Research Publishing – decline mainly due to the Hindawi special issue publishing pause; strong momentum in sign
Slide 13: Academic
Academic (millions) Q3 2023 Change Change CC Academic Publishing $129 (10%) (8%) University Services $49 (12%) (11%) TOTAL REVENUE* $178 (11%) (9%) ADJUSTED EBITDA $41 (20%) ADJ. EBITDA MARGIN 23% ▪ Academic Publishing – decline in print and ebooks more than offsetting growth in digital courseware Q
Slide 14: Talent
Talent (millions) Q3 2023 Change Change CC REVENUE $60 13% 18% ADJUSTED EBITDA $11 (5%) (2%) ADJ. EBITDA MARGIN 18% ▪ Signed five new multinational corporate clients across industry verticals, including energy, consumer products, and financial services Q3 ▪ Existing client placement growth of 38% vs
Slide 15: Financial Position and Capital Allocation
Financial Position and Capital Allocation • Free Cash Flow: YTD use of $22M (vs. source of $77M for YTD’22) mainly due to working capital timing • Leverage: Net Debt/EBITDA ratio of 2.1 (TTM) compared to 1.9 in prior year period • M&A: M&A focused on adding scale in key strategic areas, mainly Resea
Slide 16: Fiscal 2023 Outlook Reduced
Fiscal 2023 Outlook Reduced Metric FY22 Actual* FY23 Outlook* FY23 Outlook* FX Impact** FY23 Outlook^ (Millions, except EPS) Constant currency Constant currency YTD avg rates Previous Current Current Revenue $2,083 $2,110 to $2,150 $2,065 to $2,090 ($60) $2,005 to $2,030 Adj. EBITDA $433 $425 to $45
Slide 17: Pan-Wiley Simplification and Optimization Plans
Pan-Wiley Simplification and Optimization Plans Making moves to drive consistent performance and increasing profitability Accelerating portfolio optimization and improving product and customer economics Aligning segments and right sizing parts of portfolio; streamlining and automating processes and
Slide 18: Key Takeaways
Key Takeaways Results and outlook weighed down by macro-economic and market-specific challenges, and an unplanned publishing pause at Hindawi Committed to meaningfully improving Wiley’s performance and profitability through the acceleration of our simplification and optimization plans Our core growt
Slide 19: Thank you for joining us
ENABLING DISCOVERY | POWERING EDUCATION | SHAPING WORKFORCES Thank you for joining us IR website at https://investors.wiley.com/ Contact us for follow-up at: brian.campbell@wiley.com Direct +1 (201) 748-6874
Slide 20: Appendix – US GAAP to Non-GAAP EPS
Appendix – US GAAP to Non-GAAP EPS JOHN WILEY & SONS, INC. (1) (2) SUPPLEMENTARY INFORMATION RECONCILIATION OF US GAAP MEASURES to NON-GAAP MEASURES (unaudited) Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS Three Months Ended Nine Months Ended See accompanying notes 2023 January 31, 2022 20
Slide 21: Appendix – US GAAP to Non-GAAP EPS Notes
Appendix – US GAAP to Non-GAAP EPS Notes: (1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors.
Slide 22: Appendix – Net Income to Adjusted EBITDA
Appendix – Net Income to Adjusted EBITDA JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF US GAAP NET (LOSS) INCOME TO NON-GAAP EBITDA AND ADJUSTED EBITDA (unaudited) Three Months Ended Nine Months Ended January 31, January 31, 2023 2022 2023 2022 Net (Loss) Income $ (71,469)