John Wiley & Sons’ EBITDA fell 23% in the fourth quarter of its 2020 fiscal year, as the coronavirus crisis “created near-term headwinds and uncertainty” at the US-based educational publisher, leading it to cut executives’ pay.
In the fourth quarter, ended 30 April, revenue totalled $475 million – down 3% – while adjusted EBITDA stood at $92.8 million, compared with $121.1 million a year prior.
Wiley’s education services increased 41%, the firm said, driven by revenues from mthree, a training firm it acquired in January, and organic growth of 16% at its online programme management division. Adjusted EBITDA at the division almost doubled to $11 million due to revenue growth and “business optimisation initiatives”, the firm said.
But income from academic and professional learning declined 17%, due mainly to the impact of the Covid-19 pandemic on print book sales through retail closures, test preparation services due to exam cancellations, and corporate training output as on-site training was suspended, Wiley said.
The firm’s research publishing and platforms unit dropped 3%, as growth in open access was offset by delays to subscription renewals stemming from Covid-19-linked lockdowns and disruption in the higher education market.
For the full 2020 fiscal year, Wiley’s revenue reached $1.831 billion, up from $1.8 billion a year prior, while adjusted EBITDA was down 8% at $355.8 million – representing a margin of 19%.
“While the broad shutdown caused by Covid-19 has created near-term headwinds and uncertainty, our financial position is strong and our strategic plans are tightly aligned with important trends in peer-reviewed research and outcome-oriented online education which are continuing to progress through this crisis,” said Brian Napack, president and chief executive.
Wiley’s share price has fallen by 15% over the past five days, to $36.23 at the time of publication.
Napack has agreed to a 30% reduction to his base pay for six months, Wiley said, while members of its executive leadership team have had their salaries cut by 15% over the same period.
“We have implemented a number of belt-tightening measures in response to the economic slowdown,” said Napack. “While not financially necessary, the executive leadership team and board of directors are taking temporary pay reductions to share in the burden of cost reduction with our Wiley colleagues.
“We believe that it’s the right thing to do given the significant impact of the Covid-19 crisis on our colleagues, customers and partners.”
Wiley said it could not provide a forward-looking statement on its 2021 outlook due to high levels of uncertainty ushered in by the pandemic.
“The isolation measures related to Covid-19 continue to impact the research and education businesses, with uncertainties about student enrolments, university budgets, and corporate spending,” it said. “Wiley cannot confidently predict the extent or duration of the impact of the pandemic on its operating results and is therefore not providing a fiscal year 2021 outlook.”
Date published: 15 June 2020