Wolters Kluwer Investor Presentation - Euro Benchmark Offering Boudewijn Beerkens Member Executive Board Chief Financial Officer November 2003 George Dessing

Wolters KluwerWolters Kluwer

Investor Presentation - Euro Benchmark OfferingInvestor Presentation - Euro Benchmark Offering

Boudewijn Beerkens

Member Executive Board

Chief Financial Officer

November 2003

George Dessing

Vice President

Corporate Treasurer

2November 2003 - Investor Roadshow

Overview of the Offering

Status : Senior, Unsecured Notes

Ratings:Moody’s A3 (on review for possible downgrade)S&P BBB+ (stable outlook)

Amount: Benchmark SizeMaturity: Target 10 years

Use of Proceeds: Repurchase of existing debt and general corporate purposes

Documentation: Stand Alone Offering MemorandumLaw: DutchListing: Luxembourg, Amsterdam (Euronext)

Joint Bookrunners: ABN Amro, CSFB, Deutsche BankTiming: Roadshow Thursday 13th and Friday 14th of November

Pricing Week of 17th November

Issuer: Wolters Kluwer nv

AgendaAgenda

Overview of Wolters Kluwer

Review of Strategy Update

Financials

Liability Management Initiative

Summary



Financials


Summary

AgendaAgenda


Leading Multi-media Professional Publisher with Excellent Market Positions and Strong Brands

– The largest legal and tax publisher in Europe and the leading tax publisher in the US. The world’s second largest medical publishing group. Leading positions in Europe in educational publishing

– Established and diversified franchise operating in over 25 countries

High “Value-added” Proprietary Information

– Majority of revenues are generated from copyrighted proprietary content

“Must Have” Nature of Professional Product – Limits exposure to cyclical fluctuations via subscription-based revenues

– Information tools and end-to-end solutions to enhance client productivity

Stable Revenue & Free Cash Flow

– Approximately two thirds of revenue is subscription based (FY 2002)

– Consistently generated FCF (after dividends) of €250m - €300m (1998-2002)

Strong Liquidity & Prudent Balance Sheet Management

– Solid cash position and committed bank facilities

– Implementing a strategy to reduce refinancing risk and total debt

Wolters Kluwer Overview


Serving our Customers

Teachers and professors

Students

Patrimony managers

Tax professionals

And accounting professionals

Banks

Insurance

Lawyers

Scientists

Hospitals

Pharmacists

Health specialists

Pharmaceuticals manufacturers

6.400*

7.700*

1.500*

2.400*

(*) personnel

Education

LTB EuropeHealth

LTB Asia Pacific

LTB North America

HR managers

Nurses

6.400*

600*

An International CompanyCustomers and Personnel


2002 Revenues (€3,895m)

Diversified Revenue and EBITA

(1) Non-core includes KAP, Ten, Hagen & Stam, ISBW(2) Including corporate costs (excluding = €814m) and before exceptional items

Legal Tax & Business 63%

2002 EBITA (€777m) (2)

Legal Tax & Business 68%

(1)


Market = €4.1bn Key Trends & Dynamics

Legal, Tax and Business, Europe

#1 or #2 player in almost every core market and geography

Country differences drive demand for local content/offerings across all markets

Deeply rooted local brands and recognised content quality

Growing demand for more integrated tax and accounting workflow and compliance tools

Legal market driven primarily by secondary content and tools

Regulatory markets expanding at the local, country and EU levels

EHS298 (7%)

Transport183 (4%)

Tax & Accounting

1,213(30%)

HR508

(12%)

Public &Social

705(17%)

Legal1,209(30%)

By Country (€m)By Market Segment (€m)Other103

(3%)

SC148 (4%)

CE155 (4%)

UK230 (6%)

Spain 255 (6%)

Belgium 278 ( 7%)

NL289 (7%)

Italy543

(13%)

France632

(15%)

Germany1,483(35%)

Source: Company reports, D&B estimates, analyst reports

€m 2001 2002

Revenue 1,179 1,228

% of Total Revenue 30.9% 31.5%

EBITA 223 230

EBITA Margin (%) 18.9% 18.8%


Legal Tax and Business North America

Leading market positions in Legal publishing and Tax

Legal

#1 in Securities Law and other specialty areas

Tax

#1 in US Tax Market (tax research and compliance markets)

Business

Demand for higher margin specialty content and more integrated primary and secondary offerings

Registered Agent to 200k businesses (80% of Fortune 1,000)

#1 position in community bank, credit unions and mortgage segments

Highlights

€m 2001 2002

Revenue 1,210 1,214


EBITA 340 326

EBITA Margin (%) 28.1% 26.8%

Market(1): $1,080m

WK32%

Intuit 17%

BNA5%

Other22%

Thomson24%

Market(2): $1,542m

Other10%

West44%

BNA8%

Reed19%

ASPEN/CCH Legal

19%

(1) Excludes accounting market, Asia Pacific and Canada (2) Includes specialised legal content and law school marketSource: Company reports, YE company reports, analyst reports, Wolters Kluwer analysis

US Tax Market US Legal Research Market


Health - Strong Share in WK Market Segments

Market = $5.3bn Highlights

#2 medical publisher globally

Leading global online medical platform

Three of the top ten titles in the critical specialties in medical and nursing

Largest repository of full text and bibliographic medical content

Key publishing partner for more than 60 top medical societies

Source: Company financials, analyst reports, Outsell, Verispen, Pharmaceutical Executive, Wolters Kluwer information and analysis

Other59%

McGraw Hill1%

Pearson1%

WK13%

Thomson9%

Reed17%

€m 2001 2002

Revenue 680 748


EBITA 123 131

EBITA Margin (%) 18.0% 17.4%


Belgium 5%Austria 3%

Market = €1.4bn Key Trends & Dynamics

Education: WK is the Leader in European Education

Germany25%

Netherlands26%

UK21%

Sweden20%

Attractiveness

Stable, traditional text book business

Market-driven by multi-local content needs

Evolving electronic solutions

Attractive margins and stable cash flows; cycle improvement in next 3 years

Share Position

#1 in the Netherlands, Sweden, Belgium

#3 in the UK

#1 in Germany, in vocational; strengthening presence in primary

Source: Company reports, D&B estimates, analyst reports, Wolters Kluwer information and analysis

€m 2001 2002

Revenue 308 300


EBITA 61 56

EBITA Margin (%) 19.9% 18.7%



Financials


Summary

AgendaAgenda


Strategy Update - What Will be Different

Going Forward

Growth by investing in leading market positions, guided by ROIC

Integrated, customer focused divisions, managed with operational and financial rigor

Alignment of investments around leading market positions

Six Key Performance Measures linked to stakeholder value

Past

Acquisitions cornerstone of strategy

Fragmented, decentralised managed business

Investments applied broadly across many opportunities

Multiple performance measures for corporate, cluster and operating units


Five Significant Businesses with Powerful Brands

Corporate & Financial Services

Health EducationLegal, Tax &

Regulatory Europe

Tax, Accounting & Legal

(US & Asia Pacific)


Wolters Kluwer's Market Position

13%

45%

16%

33%

87%100%

55%

84%

67%

Tax, Accounting

& Legal€763m

Legal, Tax &

Business Europe€1,355m

Corporate & Financial

Services€535m

Health€749m

Education€300m

Total Revenues: €3,895m (2002)

Leading Market Positions

#1 or #280%

Not #1 or #2

20%

Note: ProRata revenues new divisions; not including divested non-core €193mMarket share does not include LTB Asia Pacific

Sources: Company financials, analyst reports, Wolters Kluwer analysis

New Five Division Structure


Strategy Update - Overview of 3 Year Plan1. Invest around leading market positions in line with high growth

opportunities

2. Continue migration to electronic delivery

3. Reduce costs through structural improvements

4. Reorganise the business to improve customer focus and deliver growth

5. Establish clear and transparent financial targets

6. Selective, more disciplined acquisition policy

7. Restructure liabilities to reduce total debt and improve financial profile


ROIC is the Key Financial Measure of all Actions

Pursue Selected Acquisitions

Invest in Online Growth and Migration

Manage Portfolio in line with Growth Opportunities

Deliver end-to-end Solutions

Strengthen and Expand Customer Relationships

1. Invest in Growth: Key Actions


Accelerate Investments in Growth...

All divisions investing to enhance core products and build new products to support customer demand for tools and solutions as well as changes in law, medicine and education

Investments focused on Health and Corporate & Financial Services divisions

Incorporates investments communicated previously for Europe and North America

...to a Total Level of €800m Over the Next 3 Years


Wolters Kluwer has in recent years invested significantly in online products and electronic compliance tools

– Internet and other Electronic revenues growing rapidly

– Represent 30% of current total revenues

– Management projects to reach 45% of total revenues by 2006

2. Invest in Electronic Growth and Migration


Total FTE Reductions from 2003 to 2006:1600 FTEs (~ 8%)

Consolidate real estate

Standardise and consolidate technology platforms, data centres and increase use of off-shore development and IT outsourcing

Rationalise back office functions within operating companies and divisions

Develop shared services for Finance, HR and some Technology functions

Key Actions

3. Reduce Costs Through Structural Improvements


Cost Savings Over Three Years will be €240m

Division

Education

Selective Shared Services

Real Estate Consolidation

Back Office and System

Rationalisation

IT Rationalisation

Restructuring Costs* ’03-’06

€m

Cost Savings’03-’06

€m

Tax, Accounting & Legal

Tax, Legal & Regulatory Europe

40 50

80 80

Health

Corporate & Financial Services

35 40

45 55

15 15

TOTAL ~ 215 ~ 240* Shared services initiatives may cause divisional differences


Impact of Restructuring 2003-2006

RestructuringCosts* (€m)

FTEReductions

Total Cost Savings (€m)

2003 2004 2005 2006

100 80 25 10

500 500 400 200

20 40 80 100

TOTAL

~ 215

~ 1,600

~ 240

Beyond 2006, annualised cost savings of about €100m

* Of which €150m will be charged as exceptional items


4. Reorganise the Business to Deliver Growth Organise business into five divisions, which become primary operating units

– Organise into customer driven businesses with distinct growth opportunities

– Drive integration of operating units

– Simplify businesses through consolidation of functions, elimination of management layers and combined locations

– Provide day to day management

Shift in Corporate Governance

– Divisions report to Chairman of Executive Board

– Formation of Executive Committee

– Greater operational role for corporate office

Strengthen corporate HR, Technology and Strategic Planning


Revenue growth

EBITA margin

After exceptional items

Cash conversion

Free cash flow

ROIC

EPS

Key Operational Measures

Key Financial Measures

0-1%

14-15%

13-14%

85%

Target 2004

€150-200m

Moving towards WACC(1)

0.99

3-4%

19-20%

85-90%

2007 onwards

> €300m

Above WACC(1)

> 1.40

5. Establish Clear and Transparent Financial Targets

(1)WACC is currently 8% after tax


Strategy Attractive Market Strengthen Leading Positions Leverage/Enhance Scale Platform for Future Growth in

Emerging Markets

Integration Short Term Viability More Rapid Integration Market/Product & Organisational Fit

Transaction Relevant Size Ease of Execution Regulatory Constraints

Financial Investment Requirements Risk Exposure Incentivised Earn-Outs ROIC Above Hurdle Rates

(Current WACC 8% after tax)

6. Pursue Selected Acquisition Opportunities


Actions to Date Support New Strategic Direction Restructuring begun at Health, North America and Europe

– Turnaround underway in the UK, Belgium and Aspen

Integrated, customer focused divisions, managed with operational and financial rigor

Aggressive cost reduction plans in place for 2003

Alignment of investments around leading market positions

Growth by investing in leading market positions, guided by ROIC

Much tighter, more disciplined acquisition policy

Significant management changes and new governance model



Financials


Summary

AgendaAgenda


813 878 919 895

CAGR 3.3%

1999 2000 2001 2002

Financial Overview

FYE EBITDA (€m)FYE Sales (€m)

Net Debt (€m)Free Cash Flow (€m)

3,8953,8373,664

3,081

CAGR 8.1%

1999 2000 2001 2002


• Net debt reduced by 29% to €2.1bn for Q3 2003 (from €3.0bn for Q3 2002)

• YTD ordinary free cash flow improved 25% to €152m for Q3 2003 (from €122m for Q3 2002)

• Outlook full year 2003 reiterated

2003 3rd Quarter Results

€m 2003

3rd Quarter2002

Revenues

EBITA(1)

EBITA Margin(1)

Benchmark Net Income(2)

2,832

520

18%

288

(1) Before exceptional items (€21m)(2) Benchmark ordinary net income before amortisation of intangible fixed assets and exceptional items (3) Currency adjusted year-on-year growth (%)

2,431

377

16%

203

-5%

-18%

-18%

% ChangeEuro Constant(3)

-14%

-27%

-30%


2002 Full Year ResultsFull Year

2002Full Year

2001

Revenues

EBITDA

EBITDA Margin

EBITA

EBITA Margin

Financial Results

Benchmark Net Income(1)

3,895

895

23%

777

20%

141

453

3,837

919

24%

812

21%

179

436

(1) Benchmark ordinary net income before amortisation of intangible fixed assets and exceptional items

€m


Key Financial Ratios

HY2003

Net Debt to EBITDA(1)

Interest Bearing Debt to

Shareholder’s Equity

Net Interest Coverage

EBITA

EBITDA

3.1x

2.0x

4.5x

5.1x

3.2x

2.3x

4.9x

5.6x

HY2002 FY01

(1) 12 months rolling basis(2) Excludes pension charges of €98, and is before accounting charges of €8m

2.8x

2.0x

5.3x

6.2x

3.0x

2.1x

5.5x

6.3x

FY02(2)


Wolters Kluwer 2005 and 2006 Bond Performance

20

60

100

140

180

220

260

300

340

Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03

Sp

read

vs.

Sw

aps

Wolters Kluwer NV 6.125% due 15/12/05 Wolters Kluwer NV 5.5% due 22/09/06VNU NV 6.625% due 30/05/07 Pearson Plc 6.125% due 01/02/07Reed Elsevier 5.75% due 31/07/08 LEI Media Index

Wolters Kluwer Spreads to Midswap vs. Peers

Source: CSFB



Financials


Summary

AgendaAgenda


Capital Markets Transactions 1. Tender Offer for:

6.125% Bonds due 2005 and 5.50% Bonds due 2006

1.000% Convertible Bonds 2001 due 2006

2. Euro denominated bond issue

Benchmark Euro offering - 10 year target

Rationale:

Reduce re-financing risk in 2005 and 2006

Smooth the maturity profile and improve duration

Efficiently utilise existing cash position

Current low interest rate environment and strong, stable markets

Proactively address the redemption obligations of 2005/2006 and efficiently utilise cash


Maturity Profile Impact of Capital Market Transaction Maturity Profile Pre Capital Markets Transactions

Illustrative Post Capital Market Transaction Maturity Profile

Indicative Maturity Profile Post Capital MarketsTransactions

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 '15+



Financials


Summary

AgendaAgenda


Leading multi-media professional publisher with excellent market positions and strong brands

High value-added proprietary information (copyright protected)

“Must have” nature of professional product

Stable revenue and free cash flow

Strong liquidity and prudent balance sheet management

Credit Highlights


Manage the business in a fundamentally different way

– Operational focus and rigor

– Clear financial targets focused on ROIC

– Tighter alignment of management and investor interests

– Optimise financial structure and working capital

The strategy will lead to:

– 3%-4% annual revenue growth

– 19%-20% EBITA margins

Continued focus on prudent balance sheet management and improvement of debt protection measures

Summary

This Document includes statements of future expectations and other forward-looking statements that are subject to risks and uncertainties. These statements are based on the current views of the Issuer’s management and assumptions and involve known and unknown risks and uncertainties. Such statements include, in particular, statements about the Issuer’s plans, strategies and prospects under the heading “Wolters Kluwer N.V.”. When used in this Document, the words “may, “will”, “estimate”, “project”, “intend”, “anticipate”, “expect”, “should” and similar expressions are intended to identify such forward-looking statements. Prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Important factors that could cause actual results to differ materially from the forward-looking statements made in this Document include, among other things, general economic conditions, conditions in the markets in which the Issuer is engaged, behaviour of customers, supplies and competitors, technological developments and legal and regulatory rules affecting the Issuer’s businesses. Save as required by the rules or regulations of any stock exchange on which the Bonds are listed, the Issuer does not undertake any obligation to publicly release any revisions of these forward-looking statements to reflect events or circumstances after the date of this Document or to reflect the occurrence of unanticipated events.

Forward Looking Statements

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Disclaimer

Documents

Wolters Kluwer Investor Presentation - Euro Benchmark Offering Boudewijn Beerkens Member Executive Board Chief Financial Officer November 2003 George Dessing