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WK Health Cluster Hugh Yarrington Member Executive Board November 5, 2002 Philadelphia

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More rapid expansion in pharmaceutical, clinical tools, payors and allied health ... Pharma companies need to get products to market faster to maximize returns ... – PowerPoint PPT presentation

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Title: WK Health Cluster Hugh Yarrington Member Executive Board November 5, 2002 Philadelphia


1
WK Health Cluster Hugh Yarrington Member
Executive BoardNovember 5, 2002 Philadelphia
2
Agenda
  • 930 1000 Global Strategy - Hugh Yarrington
  • 1000 1100 Strategy in-depth - Christopher
    Ainsley QA
  • 1100 1115 Coffee break
  • 1115 1215 Business Unit Strategies - CEOs
  • 1215 1330 Lunch
  • 1330 1630 Break-out sessions Product demos
  • 1630 1645 Closing Remarks Hugh Yarrington

3
Health Cluster The Story Today
  • New Strategy to Focus on Health
  • Divestment of KAP (E 600 mln)
  • New Structure to Leverage Health Assets
  • Roll-out Product Development 2002-05
  • IT Organizational Synergies
  • Development of Clinical Tools Growth Business
  • Pursue Uncontested No 1 Status

4
Wolters Kluwer Strategy
Launch new products
Acquire growth businesses
Extend content to software
Preserve foundation business
Drive growth
Divest slow growing assets
5
Launch New Products
Revenues from new products (EUR mln)
Selected examples
  • Fiscal Advice Journal internet tool enabling
    customers to send tailor-made newsletters to
    their clients, The Netherlands
  • Legal Announcements and Formalities a workflow
    tool, France
  • CCH Securities Compliance tracker a daily news
    service on securities rules and regulations, CCH
    US
  • All Health cluster content loaded onto Ovid
    platform
  • Redaktion D, on line language course, Germany
    (joint venture with Goethe Institute)

18
81.1
68.8
New products are launched in the past 12 months
6
Acquire Growth Businesses
Selected examples of HY-I acquisitions
Artel Ciceron Compliance Tools ICC Moorehouse
Black Uniform Val Informatique
Emphasis on acquiring strong software
companies in growing markets
Average projected growth rate of revenues is 17
p.a.
7
at Good Multiples


Total 2001 - June 2002

FY 2001
HY-I 2001
HY-I 2002
(Amounts in EUR mln)
Number of transactions
29
47
13
18
Total investment
533
736
362
203
Acquired annual revenues 1)
255
360
177
105
Revenues multiplier
2.1
2.0
2.0
1.9
EBITA multiplier
7.0
6.7
8.0
6.0
1) Revenues from first full year after acquisition
8
Extend Content to Software
Total revenues per business type ()
Revenue increase year on year ()
HY-I 2001
HY-I 2002
Integrated solutions
29
5.5
6.6
13
Smart tools
12.4
13.0
Dynamic content
15
34.1
36.0
48.0
44.4
Static content
1
100
100
Continuing revenue
9
Total continuing revenue (EUR M.)
1,600
1,747
9
Internet and Other Electronic Revenues (EUR mln)
32
26
20
18
Percentage figures represent total electronic
revenues as part of total revenues
10
Divesting Non-Core Assets
Annualized revenues (EUR mln)
  • Kluwer Academic Publishers

150
  • ten Hagen Stam

100
  • Bohn Stafleu Van Loghum

30
  • ISBW

20
  • Others

30
EUR 330 mln
Divestments represent approximately 8 of total
revenues
11
Preserve Foundation Business
  • Implement retention/loyalty programs
  • Increase effectiveness of sales and marketing
  • Sales force restructuring/reinforcement
  • CRM
  • Pursue value driven pricing policies
  • Enhance product quality

12
Wolters Kluwer Health Financial Results
EUR mln
Revenues
EBITA
Margin
  • Organic growth improved to 7 (as at 1H 2002)

13
Wolters Kluwer Health Strategic Focus
  • Reorganize to serve health and medical
    professionals
  • Four customer-facing business units created
  • New CEOs and management teams in place
  • Marketing approach and channels rationalized
  • Back office and systems work scheduled for 2002/3
  • Divest non-conforming assets
  • KAP purchase agreement signed
  • Revitalize textbook, research, institutional
    research businesses
  • Improved society, author, and distributor
    relationships
  • Increased investment in new product development
  • Improved distributor contacts
  • Reduced cycle times

14
Wolters Kluwer Health Strategic Focus, cont.
  • Ovid is and open platform and the health and
    medical leader
  • Number of A titles
  • Number of medical titles
  • Number of publishing partners
  • Monthly growth in total titles
  • Number of page views
  • Number of end-users
  • Market penetration (segment, national,
    international)
  • Spend per purchaser
  • Spend per user
  • Accelerate clinical tools development
  • Medi-Span provides great opportunities
  • Market for clinical tools about to explode
  • Increase growth organically and by acquisition
  • Organic revenue growth at 7 (as at 1H 2002)
  • Acquisition program in place and actively
    pursuing target companies

15
WK Health Christopher Ainsley, CEO
16
Health Is an Attractive Market for Wolters Kluwer
  • A large market
  • Approximately 4.0bn
  • Roughly 40 of the global STM market
  • A growing market
  • Underlying growth of 2-5.
  • More rapid expansion in pharmaceutical, clinical
    tools, payors and allied health
  • Additional growth opportunities through market
    share gains
  • Consolidation in traditional segments 50 of
    the market controlled by small players
  • Suited to our strengths
  • Concentrated in the US (65 of revenues)
  • Largely English-language (85 of revenue)
  • Largely distinct from the Scientific/Technical
    market
  • Content, Authors, Societies, Libraries and
    End-users

17
Our Vision
  • Become the global leader in information for
  • health and medical professionals
  • Focus on Pharma Solutions, Medical Research,
    Professional and Education, and Clinical Tools
  • Primary customers English reading professionals
    globally


Markets served
  • Physicians
  • Nurses
  • Medical Students
  • Nursing Students
  • Allied Health Professionals (e.g. physical
    therapists, chiropractors)
  • Pharmacists
  • Medical Schools/Teaching hospitals
  • Community hospitals
  • Pharmaceutical Sales and Marketing
  • Pharmaceutical Research
  • Biotech and Biomedical Research
  • Medical Device companies
  • Payors
  • Institutional Science (focused on medical and
    health-related science)

18
Our Vision Whats Changing
TODAY TOMORROW
YESTERDAY
19
Customer-Facing Business Units
Old Business Units
Adis
Ovid/Silver Platter
LWW-Medical
LWW-Education
Facts Comparisons/ Medi-Span
KAP
20
WK Health Organization
21
WK Health 2002(E) Business Unit Revenues
Clinical Tools
60 Million
Pharma Solutions
120 Million
Medical Research
320 Million
Professional Education
230 Million
Total WK Health 730 Million
22
WK Health 2002(E) Business Unit FTEs
Clinical Tools
240 FTEs
Medical Research
710 FTEs
Pharma Solutions
570 FTEs
Professional Education
870 FTEs
Total WK Health 2,390 FTEs
23
WK Health 2002(E) Print/Electronic Revenue Mix
in Millions
24
Implementing Our Strategy
  • Reorganize to focus on health and medical
  • Expand our portfolio of top medical content
  • Increase market share in medical research
  • Accelerate development of clinical tools
  • Revitalize core text and reference business
  • Grow pharmaceutical sales by restructuring and
    acquiring
  • Increase growth organically and by acquisition

25
Reorganize to Focus on Health and Medical
  • Leadership Recruited and developed strong
    leadership team
  • Processes Improved the way we work together
  • Finance
  • Technology
  • Human Resources
  • Implementation Teams Task forces targeting
    growth opportunities
  • Global
  • Medical Research
  • Professional and Education
  • Pharmaceuticals
  • Clinical Tools
  • Values, Behavior Culture Developed common
    values to establish new culture and drive
    change in strategy

26
Expand Our Portfolio of Top Medical Content
  • Rationale
  • Provide the must-have content on the preferred
    platform
  • Aggregate databases and content from many
    publishers

  • Achievements
  • Renewed AHA journal contract 185 million
  • Licensed 171 new titles from six publishers
    including 15 A titles
  • Moved all owned content to Ovid Platform

  • Next Steps
  • Pursue all A medical content for online
    platform

27
Increase Market Share in Medical Research
  • Rationale
  • Reinforce our leadership in institutional
    research segments
  • Support WK Health goal of expanding role in
    electronic distribution of content

  • Achievements
  • Introduced new content packages and new pricing
  • Ovid platform achieved a 62 increase in Internet
    usage and a 35 increase in peak concurrent users

  • Next Steps
  • Manage customer migration from print to online
    with the right pricing and content packages
  • Further penetrate international and community
    hospital markets

28
Accelerate Clinical Tools Development
  • Rationale
  • Place multiple bets in evolving clinical tools
    market
  • With multiple interests at the point of care,
    need to embed/integrate WK Health content in more
    general systems

  • Achievements
  • Medi-Span acquired 2002 integrating FC and
    Medi-Span
  • New CEO named 9/02 preliminary strategy
    identified

  • Next Steps
  • Develop disease management and drug information
    business strategy
  • Complete integrated data tool exit FDB editorial
    agreement
  • Explore acquisitions and partnership
    opportunities

29
Revitalize Core Text Reference Business
  • Rationale
  • Near-term stronger performance depends on
    sourcing of top content and developing stronger
    relationships with customers
  • Longer term, books will have significant value as
    an element of our clinical tools strategy

  • Achievements
  • Established new management team
  • Created market focused organization improving
    relationships

  • Next Steps
  • Investing in market research to drive
    customer-focused product development
  • Developing stronger relationships with
    distributors, authors, and customers

30
Growth and Restructuring in Pharma
  • Rationale
  • Pharma companies need to get products to market
    faster to maximize returns
  • Opportunity to establish strategic leadership by
    leading an aggressive industry consolidation
    campaign

  • Achievements
  • New CEO named 8/02
  • Acquisition plan developed
  • Restructuring business to improve market
    penetration and leverage strengths and assets

  • Next Steps
  • Complete key acquisitions
  • Continue development of new electronic products

31
Growing Organically and Through Acquisitions
  • Improved organic growth

2001 1H 2002 1.7
6.6
  • Actively pursuing acquisitions

32
WK Health Key Strengths Challenges
  • Strengths
  • Strong proprietary content
  • Strong pipeline of electronic products
  • Excellent brands market position
  • Revitalized and focused management team
  • Recurring revenue business model
  • Large and growing market segments
  • Challenges
  • Building a customer-focused organization
  • Rebuilding our critical processes and systems

33
MEDICAL RESEARCHDean Vogel, CEO
34
Market Overview
  • Medical Research combines the premiere clinical
    journals of LWW with the leading online medical
    platform at Ovid
  • Target Market Size
  • Focus on information managers, clinicians,
    medical and student researchers purchasing
    through institutions medical libraries,
    biomedical research facilities, teaching and
    community hospitals
  • U.S. institutional medical market is
    approximately 1.8 billion and growing
    approximately 5
  • Key Trends
  • Institutional libraries represent the majority of
    medical information spending
  • Trends in medical information spending suggest
    that the share of institutional buying is likely
    to grow in the future
  • As customers migrate online, there is an
    opportunity to capture spend
  • English remains the lingua franca of medical
    research creating a global medical marketplace

35
Leading Position in Medical Institutions
Source ResearchPro, March 2002
  • Full penetration of NHS in U.K. and Australia
  • Supporting over 13.3 million end-users worldwide

36
Leading Source of Medical Content
  • Greatest breadth of content through bibliographic
    layer
  • Greatest depth of medical content through full
    text journals
  • Unique addition of book content
  • Completed loading of all LWW content on the Ovid
    platform

37
Overview of Strategy
  • Become the platform of choice for content
    providers
  • Expand our leading position as an online provider
    of medical research content

Expand Lead in Content
  • Become the most used (and trusted) resource for
    online medical research
  • Maintain a leading platform for the online
    distribution of content for end-users

Drive End UserDemand
  • Continue to expand into new markets including
  • International Markets and
  • Community Hospitals (North America)

Increase MarketPenetration
Gain Sharein Spend
  • Capture spend as customers migrate online
  • Target segments with packages tailored to their
    needs and price sensitivity

38
SilverPlatter Integration
  • Strategic Benefits
  • Created leadership position in the medical market
  • Expanded local sales presence in key
    international markets
  • Provided an installed customer base for the sale
    of full text content
  • Progress Report
  • Consolidation of SilverPlatter and Ovid sales
    forces and product management organizations
  • Migrated to a single fulfillment system with a
    single view of customer base
  • Enabled cross-selling of content across platforms
  • Consolidated all areas of operations including
    finance, accounting, customer service and
    technical support
  • Relaunched brand Energize Your Thinking

39
Implementing the Strategy
Accomplishments
  • All LWW content loaded onto the Ovid platform
  • Increased number of A list journals by 32.5 to
    98
  • Increased total number of journals by 54.6 to
    824
  • Increased book content by 64.7 to 168

Expand Lead in Content
  • Increase of 35 on number of concurrent users
    (4,100)
  • Increase of 62 in page views to 152 million
  • Numerous software feature releases focused on
    end-user functionality including Ovid_at_Hand and
    PIN Support

Drive End UserDemand
  • Leveraged local sales offices to penetrate the
    international clinical marketplace first
    success in Germany/Sweden
  • Created content packages focused on penetrating
    the community hospital market in the United States

Increase MarketPenetration
  • Implemented account planning process to identify
    additional spend opportunities through customer
    profiles
  • Completed customer segmentation of Ovid customer
    base
  • Captured LWW print spend to accelerate online
    migration through bundled pricing incentives

Gain Sharein Spend
40
Summary
  • Medical Research has the leading online platform
    (Ovid) in the medical market as defined by
    penetration and usage
  • The combination of the LWW publishing program and
    third party licensing skills enable a rapid
    expansion of content offerings
  • A deeper integration of the LWW and Ovid
    organizations will enable WK to more fully
    leverage our market position
  • Ovid and SilverPlatter have been fully integrated
    within twelve months of the SilverPlatter
    acquisition

41
Medical Research Product Demo
  • Patti Corbett, Vice President, Marketing and
    Customer Development
  • Will discuss and demonstrate Ovid's Web-based
    biomedical information solutions for information
    professionals and clinicians

42
PROFESSIONAL EDUCATIONJay Lippincott, CEO
43
PROFESSIONAL EDUCATION
  • VISION
  • To be the dominant and most trusted healthcare
    information provider to individuals in all global
    markets and for all stages of their professional
    development
  • KEY STRATEGIES
  • Implement and practice a customer-focused
    approach throughout the unit, including the
    extensive use of market research
  • Work collaboratively with other WK Health units
    to fully exploit our high-quality content through
    all media and all channels
  • Publish more successful first editions in
    targeted markets and increase market share of
    product revisions
  • Strengthen management of key sales channels,
    i.e., direct marketing, international, and
    wholesale/retail
  • Continue to concentrate on (print) base business,
    but also expand program of electronic solutions

44
PROFESSIONAL EDUCATION
  • MARKET OVERVIEW
  • Professional Education serves individual
    customers in Medicine, Nursing, and the Health
    Professions
  • Medicine
  • Physicians and Medical Students
  • US Market Size 500 Million
  • WK Health Share 20
  • Growth Rate 2-3
  • Primary Competitors Elsevier, McGraw-Hill,
    UpToDate
  • Nursing
  • Nurses and Nursing Students
  • US Market Size 200 Million
  • WK Health Share 55
  • Growth Rate 3-5
  • Primary Competitors Elsevier, Thomson
  • Health Professions
  • Various Allied Health Professionals and Students
  • US Market Size 150 Million
  • WK Health Share 20
  • Growth Rate 7

45
PROFESSIONAL EDUCATION
  • MARKET TRENDS
  • Market dominated by Elsevier and Wolters Kluwer
  • Selected markets are growing student
    enrollments in nursing and the health
    professions, and nursing professionals
  • Other markets are flat medical education and
    practice
  • Customers want up-to-date information
  • Student markets are being negatively impacted by
    used textbooks and sharing of resources
  • Customers are looking for print and electronic
    product combinations
  • Rapid growth in PDA handheld products

46
PROFESSIONAL EDUCATION
  • PRODUCT OVERVIEW
  • 4,000 Textbooks and Reference Titles
  • 375 New Books Published Each Year
  • 60 Periodicals
  • 50 Electronic Products, Including PDAs
  • TOP PRODUCTS
  • Nursing 2002
  • American Journal of Nursing
  • Brunner Suddarths Textbook of Medical Surgical
    Nursing, 9th Edition
  • Cancer Principles and Practice of Oncology, 6th
    Edition
  • Clinically Oriented Anatomy, 4th Edition

47
PROFESSIONAL EDUCATION
  • IMPLEMENTING THE STRATEGY WHERE WE ARE
  • Created market-focused organization structure
  • Established new management team
  • Improved relationships with key wholesalers
  • Implemented market research program to drive
    product development
  • Reallocated resources to growth areas
  • Working cooperatively with other WK Health units
    to maximize exploitation of content and increase
    development of new print and electronic products

48
PROFESSIONAL EDUCATION
  • SUMMARY
  • Print business remains important to customers and
    WK Health
  • Collaboration with other WK Health units will
    lead to improved results
  • Wealth of high-quality content assets presents
    significant opportunity to WK Health
  • A customer-focused organization and operation
    will lead to improved product development and
    increased sales

49
PROFESSIONAL EDUCATION
  • PRODUCT DEMOS
  • Jim Ryan, Vice President, Medicine
  • Will explain and demonstrate Professional
    Educations PDA program for medical practitioners
  • Diana Mason, Editor-in-Chief, American Journal of
    Nursing
  • Will describe Professional Educations
    market-leading nursing periodical publishing
    program and how the Springhouse acquisition has
    been successfully integrated and increased our
    strength in the market

50

PHARMA SOLUTIONSJohn Monahan, CEO
51
Pharma Solutions
  • VISION
  • Become the leading provider of communications and
    information solutions to the global
    pharmaceutical, biotech, and medical device
    industries
  • KEY STRATEGIES
  • Focus on Pharmaceuticals, Biotechnology, and
    Medical Device companies
  • Develop Greater Depth Breadth Across the
    Product Life Cycle
  • Move From Purchased Data to Suite of Flexible
    Solutions
  • Aggressive Acquisition Expansion Plan

52
Pharma Solutions Market Overview
  • Market Trends
  • Pharmaceuticals, Biotech Medical Device Markets
    continue to grow
  • at 8
  • Spend approximately 50 billion annually on
    information, content and knowledge
  • Assuming 10 is outsourced 5 billion potential
    throughout the product lifecycle
  • Greater need for timely, value-added, integrated
    information
  • Competition
  • Strongest competition comes from Reed Elsevier
    and Thomson
  • Additionally many small players compete on a
    segment-by-segment basis

53
Pharma Solutions Opportunities
  • Current Positioning
  • Revenues continue to grow organically
  • Currently providing solutions to 17 of top 20
    Pharma Companies worldwide
  • However, under-penetrated in U.S. marketplace
    which is the largest pharma market in the world
  • Opportunities
  • Develop greater depth breadth across product
    life cycle
  • Significant opportunities to establish strategic
    leadership though acquisitions
  • Consolidation of smaller players across the
    product lifecycle equals large opportunity
  • Development of new products and strategic
    acquisitions will enhance ability to capture
    larger market share
  • Restructuring business to leverage our strengths
    and assets and focus on customers

54
Pharma Solutions Strengthening Depth Breadth
Across Product Life Cycle
55
Pharma Solutions Products
  • Providing robust and significant data in the
    areas of
  • Clinical Trials Data
  • Drug Data
  • Business Intelligence Data
  • Commercial Reprints
  • Customized Healthcare Communications
  • Publication Planning Tools
  • Continuing Medical Education Resources

56
Implementing the Strategy Where we are
  • Strategic acquisition plan developed and
    implemented
  • 100 initial acquisition targets identified and
    screened against current gaps
  • Thirty serious targets being closely examined
  • U.S. operation restructured and sales force
    aligned around customers
  • New executive team in U.S. in place
  • Global marketing and new product development
    function established
  • Sales force customer teams established
  • New electronic products launched
  • LWW Healthcare and Adis integration underway

57
Pharma Solutions Summary
  • Combined LWW and ADIS International to form
    Pharma Solutions, a strong global solution
    provider
  • History of strong organic growth
  • Commitment to develop greater depth and breadth
    across the product lifecycle through new product
    development and acquisitions
  • Penetration into US marketplace is a priority
  • Move from data provider to suite of flexible
    solutions

58
Pharma Solutions Product Demos
  • John Monahan, CEO, Pharma Solutions
  • John Starzewski, Vice President, Strategic
    Marketing Services
  • Will describe and demonstrate, several of the
    Pharma Solutions core offerings,
  • including
  • Clinical Trials Insight
  • R D Insight
  • AdisZenith Publication Planning Tool

59
CLINICAL TOOLS Jon Seymour, MD, CEO
60
Clinical Tools Focus and Guiding Principles
  • Focus
  • Forward-looking unit focused on the application
    of emerging technologies to healthcare
    information needs
  • Dramatic growth opportunities will exist -- our
    goal is to lead
  • Timing understanding state of technology and
    market forces is critical
  • First example e-prescribing
  • Guiding Principles
  • Technology will inexorably creep out to the front
    lines of healthcareto the clinicians
  • The breakthrough products for clinicians have not
    yet been made
  • Print products should be derivatives of
    electronic products, not vice-versa
  • Collaboration between Clinical Tools and other
    business units creates unique potential
  • We will need to innovate and take risks

61
Clinical Tools Current Product Lines
  • Three synergistic organizations being integrated
    into one working group
  • Referential drug info lt--gt Integrated drug info
    lt--gt Integrated disease info

62
Clinical Tools Vision
  • Deliver tools to healthcare professionals that
    make them information professionals
  • Reduce medical errorsand capitalize on that
    financially!
  • Disease-centric decision support
  • Distance learning
  • Digital human
  • Attention to medical device industry in addition
    to pharmaceutical industry

63
Clinical Tools Competitive Landscape
  • Barriers to entry are extremely high in the
    integrated drug data market
  • Only two players FirstDataBank (55) and
    Medi-Span (45)
  • Switching costs for customers are often
    prohibitive
  • Resources and expertise required to create a
    comprehensive clinical drug database (e.g., Facts
    and Comparisons) are significant
  • Competitors include Thomson (PDR, Drugdex, USP),
    Reed Elsevier (Mosby GenRx), Medimedia
    (Triple-i), Lexi-Comp (Lexi-Drugs), Gold Standard
    Multimedia (Clinical Pharmacology), American
    Society of Health-Systems Pharmacists (AHFS Drug
    Monographs)
  • A new player emerges only every several years
  • Clineguides disease database is an even more
    complex build and only Cerner (Zynx) has an
    existing competitive product

64
Clinical Tools Customers are institutional
Over 40 of total sales (and vast majority of
Medi-Span sales) are to systems vendors
65
Clinical Tools Products Landscape
  • Skillful application of advanced information
    technologies will create massive opportunities in
    healthcare

66
Clinical Tools Goals for 2003
  • Continue to integrate the existing product lines
    and operations, providing the market with novel
    and compelling products
  • Add new leadership in marketing to support an
    integrated and well-trained sales force
  • Establish operational stability and continue
    solid market momentum into 2004
  • Participate aggressively in acquisition market
  • Set stage for payoff in 2004 and beyond

67
Clinical Tools Product Demos
  • Russ Worley, Managing Director, Medi-Span
  • Leslie Mills, Senior Product Developer,
    Medi-Span
  • Will explain and demonstrate the Medi-Span
    product line
  • Jon Seymour, MD, CEO, Clinical Tools
  • Will explain and demonstrate the
    Clineguide/eFacts web-based products

68
Closing RemarksHugh Yarrington
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