1. 1 Wolters Kluwer Education From A to Z Investor/Analyst Day Amsterdam 25 November 2003

2. Education WK Education From A to Z - 25 November 2003 2 Agenda 8.45 - 9.00 Introduction Nancy McKinstry 9.00 - 10.15 Business overview and Markets - Harry Sterk 10.15 - 10.30Technology - Ilhan Aksoycan 10.30 - 11.00Q & A 11.00 - 11.30Coffee Break 11.30 -12.30Strategy and Q & A - Harry Sterk 12.30 - 14.00Lunch, Hilton Hotel 14.00 - 17.15Product demonstrations, WK office

3. 3 Introduction Nancy McKinstry Chairman Executive Board

4. Education WK Education From A to Z - 25 November 2003 4 The Professional’s First Choice Provide information, tools and solutions to help professionals make their most critical decisions effectively and improve their productivity The Professional’s First Choice Provide information, tools and solutions to help professionals make their most critical decisions effectively and improve their productivity Wolters Kluwer Vision:  Large and profitable markets with potential to create value for customers  Leading and distinct positions in key professional segments  Emerging customer needs and technologies create opportunities to build new products and services  Build on proven capabilities in content development, technology and customer service

5. Education WK Education From A to Z - 25 November 2003 5 Education is an attractive business Stable, traditional text book businessStable, traditional text book business Market size: € 1.4 billion (addressed markets), average growth 1-3%Market size: € 1.4 billion (addressed markets), average growth 1-3% Market-driven by multi-local content needsMarket-driven by multi-local content needs Evolving electronic solutionsEvolving electronic solutions Attractive margins and stable cash flows; cycle improvement in next three yearsAttractive margins and stable cash flows; cycle improvement in next three years High market sharesHigh market shares Education high on (political) agenda’sEducation high on (political) agenda’s Brands and capabilities in Health, LTBE in compliance that can be leveragedBrands and capabilities in Health, LTBE in compliance that can be leveraged

6. Education WK Education From A to Z - 25 November 2003 6 Key Strategy Elements Reduce Costs  Develop shared back-office services  Right-sizing in country operations  Develop shared back-office services  Right-sizing in country operations 2 Reorganize  Strengthen senior management team 3 Invest 1  Reinforce text book publishing leadership position  Expand market share - mixed-media learning solutions  Pursue growth in adjacent markets  Reinforce text book publishing leadership position  Expand market share - mixed-media learning solutions  Pursue growth in adjacent markets WKE: a business which meets the strategic direction of the group and complements the other divisions

7. Education WK Education From A to Z - 25 November 2003 7 Wolters Kluwer Education Vision Mission offering learning communities compelling cross-media learning solutions. Mission Key financials Achieve above market average growth, 25% EBITA approach Key financials Achieve above market average growth, 25% EBITA approach Vision The leading and fastest growing provider of quality learning solutions. Integrating content, services, technology to facilitate learning processes. Integrating content, services, technology to facilitate learning processes. Vision The leading and fastest growing provider of quality learning solutions. Integrating content, services, technology to facilitate learning processes. Integrating content, services, technology to facilitate learning processes. Strategy Protecting and growing the core business: Marketing and sales, integrated solutions, on-time, 20%+ innovation, segmentation Aggressive expansion in new markets: (e-learning, services, home market): (e-learning, services, home market):Strategy Protecting and growing the core business: Marketing and sales, integrated solutions, on-time, 20%+ innovation, segmentation Aggressive expansion in new markets: (e-learning, services, home market): (e-learning, services, home market):

8. Education WK Education From A to Z - 25 November 2003 8 Focus on delivering solid margins while positioning for growth  Improving margins; rigid cost control  Market focused management  Learning services,integrated solutions  Multiple business models and sources of revenue  Re-use of content assets  Sell to parents, students, schools, government and corporations  Curriculum and non-curriculum related  # 1 in integrated learning solutions and services  Stable margins  Product focused management  Textbooks and ICT  Publishing-focused business model  Single use of content  Sell to schools and government  Curriculum related  #1 in traditional education publishing TOMORROWTODAY

9. 9 Business Overview and Markets Harry Sterk CEO Wolters Kluwer Education

10. Education WK Education From A to Z - 25 November 2003 10 Overview  Historical core activities of WK in Europe  Established as separate division in 2000  Total 2002 sales: EUR 300 million  Total 2002 EBITA: EUR 56 million  EBITA margin : 18.7%  Approximately 1,500 employees  Seven countries, six core segments:  Primary  Secondary  Higher  Vocational  Atlases/After-school market  School/Teacher Services  Netherlands  Belgium  Sweden  Germany  Austria  Hungary  United Kingdom

11. Education WK Education From A to Z - 25 November 2003 11 WK Education Organization * FTEs as of year-end 2002 (Digital Spirit 2003) Division Management Harry Sterk (CEO) Gerard Vork (CFO) Ilhan Aksoycan (CTO) Patrick Hendriks (BID) (7 FTEs) Tighter, leaner and more effective management team

12. Education WK Education From A to Z - 25 November 2003 12 Revenue Breakdown 2002

13. Education WK Education From A to Z - 25 November 2003 13 Portfolio Netherlands Belgium United Kingdom Germany/Austria Sweden Primary Secondary Higher Vocational Other Surface indicates relative size of activity in WKE portfolio Hungary

14. Education WK Education From A to Z - 25 November 2003 14 Financials

15. Education WK Education From A to Z - 25 November 2003 15 Market Profile  Students  Parents  Teachers  School Administrators  Professionals  Primary education  Secondary education  Higher education  Vocational education  Corporate  Home  Schools  Government  Business  Parents Segments Purchasers End Users Very often users are not the buyers

16. Education WK Education From A to Z - 25 November 2003 16 Market Segments & Characteristics

17. Education WK Education From A to Z - 25 November 2003 17 Market Characteristics: Primary Target Group Pre-school to 12 years Teachers Schools (government funding) Approx. 10 years per subject area, on average one replacement per year Approx. 10 subject areas 25% of division revenues (2002) variable per country (average 3%) Trends Decision Making Unit Purchasers Lifecycle # of subjects Share of division revenues Market Growth Rate  Uniform, relatively simple curriculum: limited development costs  Long cycles, generally stable business  Limited use of information technology (ICT)  Price elasticity relatively low (value pricing)  More lump sum financing: opportunity for services  Teachers shortages, and performance demands

18. Education WK Education From A to Z - 25 November 2003 18 Market Characteristics: Secondary Target Group 12-18 years Teachers Parents (in most cases) Curriculum set by government (4-5 years). Core methods have long life (revised editions) Approx. 10-15 subject areas (varies per country) 38% of division revenues (2002) Depending on curriculum cycle (average 3% per year) Trends Decision Making Unit Purchasers Lifecycle # of subjects Share of division revenues Market Growth Rate  Performance demands  Teacher shortages  Increased use of ICT: scope for revenue growth  ICT infrastructure developed  Opportunities for integrated solutions

19. Education WK Education From A to Z - 25 November 2003 19 Secondary: WK Curriculum Effect The impact of curriculum effect may vary (depending on adoption rates), but basic trend is evident 80.0 90.0 100.0 110.0 120.0 19992000200120022003200420052006 Index( base = 2000) approx. 3% approx. 3% + /-10% + /-10%

20. Education WK Education From A to Z - 25 November 2003 20 Market Characteristics: Higher Target Group 18 years + (higher education) Teachers Students Varies by title; Bestsellers generally have long cycle (different editions) High number of subject / courses 18% of division revenues (2002) 3% per year Trends Decision Making Unit Purchasers Lifecycle # of subjects Share of division revenues Market Growth Rate  Fragmentation / specialization: opportunity for content solutions (content organizer)= topline growth  Internationalization: cross border sell  ICT infrastructure generally well in place  Upfront financing opportunities (co-development with customers)

21. Education WK Education From A to Z - 25 November 2003 21 Market Characteristics: Vocational Target Group 16 years + Teachers Students / Schools (varies per country) Varies by title; Bestsellers generally have long cycle (different editions) High number of subject / courses 15% of division revenues (2002) 3% per year (varies per country) Trends Decision Making Unit Purchasers Lifecycle # of subjects Share of division revenues Market Growth Rate  Fragmentation / specialization: opportunity for content solutions (content organizer)= topline growth  ICT infrastructure generally well in place  Upfront financing opportunities (co- development with customers)

22. Education WK Education From A to Z - 25 November 2003 22 European Education: An Attractive Market  Positive curriculum cycle  Increasing performance demands  Strong market positions and brands  Loyal customers, long cycles create (70-80%) recurring revenues  Low price elasticity  ICT infrastructure improving  Local / fragmented competition: no pan-European competitor  Homogeneous range of activities  Government commitment towards education  No large (either in-or-out) state adoptions

23. Education WK Education From A to Z - 25 November 2003 23 Operations Overview

24. Education WK Education From A to Z - 25 November 2003 24 Market Positions Revenue By Market Segment (2002) Primary25% Secondary38% Higher Ed 18% Vocational15% Other 4% Total = € 300 M Belgium UK Sweden Netherlands Germany Austria 71M 262M 258M 336M 60-70M 330M 42M 28% 17% 21% 30% Primary, Secondary, Higher Ed Primary, Secondary Primary, Secondary, Higher Ed, Professional, Maps Primary, Secondary, Higher Ed, Vocational, Maps Vocational Primary, Secondary Primary, Secondary, Vocational AddressableMarkets 50% WK Markets and Est. Share 2% 12% All addressable market and WK share data are € 2002. Refers only to traditional schoolbook market. Excludes some € 31 mln revenues from new activities outside traditional markets (e.g. Liber Hermods (Sweden), Moorhouse Black (UK), ‘After-school’ market (Netherlands)) Hungary 35M Primary, Secondary, Vocational 16%

25. Education WK Education From A to Z - 25 November 2003 25 The Netherlands Primary Segment RankWKE Main competitors # 2 Malmberg, Zwijssen Main strengths:  High market shares  Strong brands  Broad portfolio, present in every segment  Scale economies Strategic priorities:  Integrate ICT in learning solutions  Improve marketing and sales  Build out services  Standardise processes Secondary # 1 Malmberg, Thieme-M. Higher # 1 Various small players Vocational # 1/2 Thieme M., Nijgh, Malmberg Atlases # 1 -

26. Education WK Education From A to Z - 25 November 2003 26 Sweden Compulsory Segment RankWKE Main competitor # 1 Bonnier, Natur/Kultur, Gleerups Main strengths:  Strong market positions  Broad portfolio, present in (almost) every segment  Liber Hermods: distance learning capabilities Strategic priorities:  Integrate ICT in learning solutions  Build out Liber Hermods to corporate market Secondary # 1 Bonnier, Natur/Kultur, Gleerups University # 2 Student litteratur, Natur/Kultur Professional # 1 - Atlases/Maps -

27. Education WK Education From A to Z - 25 November 2003 27 United Kingdom Primary Segment RankWKE Main competitor # 4 Heinemann, Ginn, OUP Main strengths:  Strong brands  High quality products  Active in all segments  Connection with Moorhouse Black (cross selling, total solution offering) Strategic priorities:  Capitalize on additional government funding of e-learning products  Expand Moorhouse Black (e.g. corporate market) Secondary # 3 Heinemann, Hodder, OUP Vocational # 2 Heinemann, Thomson, Hodder International # 2 Leader in Caribean Servicesn.a.-

28. Education WK Education From A to Z - 25 November 2003 28 Germany / Austria Vocational Segment RankWKE Main competitor # 1 Westermann, Handwerk-T Main strengths:  High market share in vocational  High margin  Strong organization and management  Connection with Digital Spirit (e- learning technology and customer base)  Lean operation Strategic priorities:  Expand position in Compulsory (Austria and Germany)  Explore opportunities in corporate market  Develop services and tools Compulsory # 5 Cornelsen, Klett, Schroedell, Westermann

29. Education WK Education From A to Z - 25 November 2003 29 Belgium Primary Segment RankWKE Main competitor # 1 Van In, Die Keure Main strengths:  Strong brands  High market shares  High quality products  Active in all segments Strategic priorities:  Integrate ICT in learning solutions  Expand in higher education Secondary # 1 Pelckmans, Van In, De Boeck Higher # 1 Highly fragmented

30. Education WK Education From A to Z - 25 November 2003 30 Hungary Primary Segment RankWKE Main competitor # 2 Nemzeti, Apaczai Main strengths:  Strong brands  High market share in vocational  High quality products  Good relations with government  Lean operation Strategic priorities:  Expand number of subjects in Primary  Build out position in Secondary  Continue to bid for e-learning tenders of government Secondary # 3 Nemzeti Vocational#1Tankönyvmester

31. Education WK Education From A to Z - 25 November 2003 31 Digital Spirit / WKE-Online Main strengths:  Innovative and reliable technology base  Market leader  Strong brand  Excellent customer base  Profitable competence center Strategic priorities:  Expand in corporate e-learning  Clone corporate e-learning solutions to curriculum based e-learning  Integrating WK-E Online with Digital Spirit creating one-stop technology shop  Fold DS into BV-Eins (managerial, backoffice, administrative etc.)  Division wide CMS implementation (DAL) Back-End Content Management (WKE-Online) Delivery Learning Management System Front-End: Content Production (digital spirit)

32. 32 Technology Strategy Ilhan Aksoycan CTO Wolters Kluwer Education

33. Education WK Education From A to Z - 25 November 2003 33 Technology supporting the business  Main components:  Information systems: supporting product-planning & development, marketing, sales & distribution and back-office  Technical infrastructure: to run these systems and to enable optimal communication within the division  Divisional strategy:  Standardization based on best of breed technologies like SAP, K&P, Oracle etc.  Standardization of processes enabling joint activities like joint printing deals  Standardization of information streams leading to uniformity of information leading to improved control  The status of implementation:  Roll-out will be complete by the end of 2004 Resulting in: Uniform and reliable management information, improved process control, costs below 3.5% of revenues

34. Education WK Education From A to Z - 25 November 2003 34 Role of technology in products  Flexibility. Opportunities in our markets and new educational-methods and structures require a high level of flexibility from our products and production processes.  Personalized content and blended learning. Customers require increasingly personalized content and want products based on different and often combined media formats (blended learning)  Speed and control. Greater diversity of products and shorter time to market requires better control of the production processes  Reusage of digital content assets. Personalized products, delivered in different media formats makes reusability of content and learning components essential

35. Education WK Education From A to Z - 25 November 2003 35 Divisional Strategy  Standard technology for the internal production-line for content production and product assembly. Based on industry standard components.  Open architecture for electronic publishing and e-learning  In-house competence around integration of content, courseware development and e-publishing/e-learning  No in-house development of core technologies. Strong preference for industry standard technology components with in- house integration capability  Partnerships for infrastructure with main players in the industry (like IBM) to deliver the infrastructure and operational competence Resulting in: Low technology risk, controlled technology investments, incremental costs, short time to market

36. Education WK Education From A to Z - 25 November 2003 36 Technology enabling products WEB WEB Publishing Publishing Content Contentacquisition Conversion to XML Content creation direct to XML direct to XML Structured, Structured, re-usable, re-usable, media independent content content DigitalAssetLibrary Product Assembly QuarkPDF LMS BOOKS E-LEARNING REFERENCE Etc. Infrastructure Workflow management, planning and fulfillment systems Content Factory PublishingProduct

37. Education WK Education From A to Z - 25 November 2003 37 Implementation Status  Content Management System (CMS) Concept has been defined and is being rolled out on a project-by project basis. In 2004 the roll out of CMS will be accelerated aiming to bring all new products into this platform  Competence center: Digital Spirit/WKE Online The internal competences around e-content development, courseware development and marketing/sales of e-learning products has been strengthened through the acquisition of Digital Spirit  IBM and Microsoft partnerships A cooperation with IBM is in place, discussions with others ongoing  Developed products Significant products like the Liber Hermods distance learning platform Athena, Digicoach product of Wolters Noordhoff and the Moorhouse Black education portal are based on this technical platform.

38. Education WK Education From A to Z - 25 November 2003 38 Implementation Status WEB WEB Publishing Publishing Content Contentacquisition Conversion to XML Content creation direct to XML direct to XML Structured, Structured, re-usable, re-usable, media independent content content DigitalAssetLibrary Product Assembly QuarkPDF LMS BOOKS E-LEARNING REFERENCE Etc. Infrastructure Workflow management, planning and fulfillment systems Content Factory PublishingProduct WKE Online Digital Spirit Production Departments Opco’s Partners (e.g. IBM) SAP, Klopotek and others

39. Education WK Education From A to Z - 25 November 2003 39 Q&A

40. 40 Strategy Harry Sterk CEO Wolters Kluwer Education

41. Education WK Education From A to Z - 25 November 2003 41 Key Strategy Elements Reduce Costs  Develop shared back-office services  Right-sizing in country operations  Develop shared back-office services  Right-sizing in country operations 2 Reorganize  Strengthen senior management team 3 Invest 1  Reinforce text book publishing leadership position  Expand market share - mixed-media learning solutions  Pursue growth in adjacent markets  Reinforce text book publishing leadership position  Expand market share - mixed-media learning solutions  Pursue growth in adjacent markets

42. Education WK Education From A to Z - 25 November 2003 42 1. Invest: Reinforce text book publishing leadership position  Copy successful products/approaches from geography to geography (e.g., Higher Education, atlases)  Explore opportunities to expand presence in new European geographic markets  Improve sales and marketing capabilities  Capture larger share of curriculum adoptions  Expand in segments in current geographies where we are under represented Expand Geographic Presence Clone Successful Products Strengthen Sales and Marketing Focus Areas Description Expand in new segments

43. Education WK Education From A to Z - 25 November 2003 43 SCHOOL BUDGETS (100%) Surface indicates total market size TEXT BOOKS (4-6%) Currently 30% share of the text book market, which in itself represents some 4-6% of the total school budgets SCHOOL SERVICES & SYSTEMS 1. Invest: Pursue Growth in Adjacent Markets

44. Education WK Education From A to Z - 25 November 2003 44 1. Invest: Pursue Growth in Adjacent Markets Schools / Teachers / Students Parents / Students (home situation) Business / Corporate/ Government Curriculum Related / Mandatory Non Curriculum Related Services: Rent-a-teacher *, assessment services *, risk assessment, compliance services, back office etc. “Home market”: ‘First time readers’ material, edutainment software, atlases etc. Discretionary learning: Language education, IT skill training etc. Learning support: Homework support services, exam preparation, additional learning material Compliance driven e-learning: Health safety and environment education, etc. CUSTOMER MARKET LEARNING NEED Exam services Text book publishing + ICT integration * CURRENT CORE

45. Education WK Education From A to Z - 25 November 2003 45 1. Invest: Expand Market Share – Mixed Media Learning Solutions Integrated Text book + CD-ROM / Internet Modules  CD ROM / Internet modules integrated with text books  Electronic components contain exercise material for students, and additional (differentiation) resources for teachers  Sold as integrated package, value pricing + + No migration !

46. Education WK Education From A to Z - 25 November 2003 46 1. Invest Systems and Services Rationale  Poised for growth - organic growth potential  Unique launch platform: brands, positions, channels  Complementing needs: one-stop-shop fully integrated solutions  Fragmentation/ small players: consolidation opportunity Text book is the natural access key to this market

47. Education WK Education From A to Z - 25 November 2003 47 SCHOOL BUDGETS (100%) Surface indicates total market size TEXT BOOKS (4-6%) SCHOOL SERVICES & SYSTEMS & SYSTEMS 1. Invest: A Natural Evolution BOOK ICT LMS Assessment servicesAssessment services Teacher svcs.Teacher svcs. ComplianceCompliance svcs. svcs. Professional management svcs.Professional management svcs. Technology: common platforms and alliancescommon platforms and alliances Content: content management systems, digital asset libraries  standardizationcontent management systems, digital asset libraries  standardization

48. Education WK Education From A to Z - 25 November 2003 48 Risks & Opportunities ?funding issues + marketing & sales +compelling products +right prices (value pricing) +high innovation levels - existing segments - new segments (systems & services)  Above market average growth

49. Education WK Education From A to Z - 25 November 2003 49 New Business Development Split between core and new business  Core business development:  Text books with integrated ICT components  New methods Within business units Initially separate, small teams, scaled up when there is customer buy-in  New business:  Related products and services building on existing assets, skills and/or channels

50. Education WK Education From A to Z - 25 November 2003 50 Customer driven approach Previous approach  Start with developing product  Build first, sell later  Selling on product features New approach  Start with business model, start with customers  Sell first, build later (customer buy-in required)  Selling on customer benefits Quote from publisher: “It takes courage to sell something which you have not built yet” Quote from Harry Sterk: “It takes more courage to build something before you have sold it”

51. Education WK Education From A to Z - 25 November 2003 51 Washing Machine Ideas A Continuous Process: Keep the Machine Full and Accept Early Failure ‘Reject and Forget’ (80%?) 20%: Step two: Resources Resources “Will you buy this?” is the most powerful market research

52. Education WK Education From A to Z - 25 November 2003 52 Venture Capital Approach  Small, dedicated local teams  Divisional business development board: monitoring and cloning. Focus on action  Idea is as good as buy-in of customers. Funding in balance with customer buy-in (committed sales)  Strict go/no go decisions (threshold investment levels)  Kill or ‘promote’ quickly. Good concepts get scaled up  Lot’s of opportunities and…people trust us. Exploiting well evaluated investment opportunities. Low risk, high speed.

53. Education WK Education From A to Z - 25 November 2003 53 2. Reduce Costs Reduction of € 15 mln between 2003-2006 IT/ICT Partnership with prefered suppliers (e.g. IBM)Partnership with prefered suppliers (e.g. IBM) One internal e-learning competence centreOne internal e-learning competence centre CMS, Digital Asset LibraryCMS, Digital Asset Library Roll-out backoffice: SAP/KlopotekRoll-out backoffice: SAP/Klopotek Production Printing, design and pre-press outsourcedPrinting, design and pre-press outsourced Central purchasingCentral purchasing Asia-routeAsia-route Remuneration Much more performance orientedMuch more performance oriented Staffing levels Reductions where possibleReductions where possible Improving personnel cost/revenue ratioImproving personnel cost/revenue ratio VC-approach Development based on market buy-inDevelopment based on market buy-in Strict go/no-go criteriaStrict go/no-go criteria Standardization Product formatsProduct formats Active cloningActive cloning … and, increase speed

54. Education WK Education From A to Z - 25 November 2003 54 3. Reorganize How to Accomplish the Mission?  Having the right people in the right place:  New MD’s  ‘Oath for Growth’ (contract with staff)  Emphasis on marketing and sales  Shift product focus to customer focus  Core business:  Operational excellence (revenues) -On-time -Appropriate quality of content -Marketing & sales, market share game, segmentation  Operational excellence (costs) -25% approach (cost benchmarking): identifying the issues -ROIC should exceed WACC (8% after tax) -Standardization & transparency: standard systems, templates etc. -Simplify organization  New business (see presentation later)

55. Education WK Education From A to Z - 25 November 2003 55 3. Reorganize Active HR Policy: Oath for Growth  Signed contract with senior staff on: 1- top line (organic) growth 2- customer focus: on buying rather than liking 3- active portfolio management 4- clear (internal) communication 5- bottom line growth 6- sticking to the rules 7- ‘can-do’ mentality 8- active HR policy: culling mediocrity 9- sense of urgency  Active policy to have people in place with the right attitude and culture

56. Education WK Education From A to Z - 25 November 2003 56 Some examples (past 12 months)  New Managing Directors appointed in Belgium, United Kingdom and the Netherlands  Merging operations of Germany and Austria  SAP/Klopotek implementations (financial and workflow systems) in Germany and the Netherlands  Reduction of UK workforce by nearly 20%  Content management system in place  Strategic (technology) alliances in place (e.g. IBM)  New product family launched with ICT-components in the Netherlands

57. Education WK Education From A to Z - 25 November 2003 57 Summary  Well defined and leading market position in Europe - scale counts  Macro-dynamics moving to our advantage  Clear potential for growth -rejuvenated management -customer not product focused -heavy emphasis on marketing and sales -potential bolt-on acquisitions to develop the core -available funding from government  Cost control opportunities continue  Clear direction and complementary to Group  We will grow faster than the market