2014.12.09 Ta Investor Seminar

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Wolters KluwerTax & Accounting

Investor Seminar

9 December 2014


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This presentation contains forward-looking statements. These statements may be identifiedby words such as "expect", "should", "could", "shall", and similar expressions. Wolters Kluwer

cautions that such forward-looking statements are qualified by certain risks and

uncertainties, that could cause actual results and events to differ materially from what is

contemplated by the forward-looking statements. Factors which could cause actual results to

differ from these forward-looking statements may include, without limitation, general

economic conditions, conditions in the markets in which Wolters Kluwer is engaged, behavior

of customers, suppliers and competitors, technological developments, the implementationand execution of new ICT systems or outsourcing, legal, tax, and regulatory rules affecting

Wolters Kluwer's businesses, as well as risks related to mergers, acquisitions and divestments.

In addition, financial risks, such as currency movements, interest rate fluctuations, liquidity

and credit risks could influence future results. The foregoing list of factors should not be

construed as exhaustive. Wolters Kluwer disclaims any intention or obligation to publicly

update or revise any forward-looking statements, whether as a result of new information,

future events or otherwise.

Unless otherwise stated, growth rates are cited are in constant currencies.

Forward-looking Statements

2Tax & Accounting Investor Seminar, 9 December 2014


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Todaysspeakers

Nancy McKinstry

CEO, Wolters Kluwer

Karen AbramsonCEO, Wolters Kluwer Tax & Accounting

Teresa MackintoshPresident & CEO, Wolters Kluwer Tax &

Accounting, CCH US

Jason MarxPresident, Wolters Kluwer Tax & Accounting

Small Firm Services US & Brazil

Henri van EngelenManaging Director, Wolters Kluwer Tax &

Accounting Europe

Tax & Accounting Investor Seminar, 9 December 2014


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Agenda

Nancy McKinstryCEO Wolters Kluwer

Introduction

Wolters Kluwer Tax & Accounting

Collaborative Solutions: Europe

Moving to the Cloud: US

Summary and Q&A

Break

Globalization: Brazil



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Four global divisionsTax & Accounting: 27% of revenues and 32% of adjusted operating profit

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Wolters KluwerFY 2013 Adjusted Operating Profit

765 million

Note: Operating profit split is before corporate costs

Wolters KluwerFY 2013 Revenues

3,565 million

Financial &Compliance

11%

Legal &Regulatory

40%

Tax &Accounting

27%

Financial &Compliance

8%

Legal &Regulatory

39%

Tax &Accounting

32%



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Wolters Kluwer strategyAccelerating profitable growth

Expandour leading,high growth

positions

Deliversolutions and

insights

Driveefficiencies

Continue to drive efficiencies throughoperational excellence initiatives

Invest in solutions that enable ourcustomers to make critical decisions andincrease their productivity

Focus investment on high growth segmentswith leading positions



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2008 2009 2010 2011 2012 2013 2014

Tax & Accounting acquisitionsBolt-on acquisitions supporting transformation


Acquired

Acclipse (NZ)EDS (ES)

BSI (US)

Acquired

Twinfield (NL)

Speedtax (US)

BusinessFitness (NZ)

CGT Reporter(AU)

TopPower (BE)

Acquired

Prosoft (BR)Best PracticeSolutions (AU)

Acquired

Addison (GER)MYOB (UK)

IntelliTax (US)

Divested

Complete Tax

(US)

Transferred

certain US and European

publishing assets to Legal &Regulatory as of January 2013and January 2014

AcquiredE&Y CRSSoftware (AU)

AcquiredDingxinChuangzhi (CN)

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Transforming into softwareDigital and services reach 88%, including software 61%

Wolters Kluwer Tax & AccountingRevenue by Media Format

Note: 2009 figures are pro forma (Tax & Accounting division formed in 2010).

SoftwareCAGR +6% in

ConstantCurrencies



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Tax & Accounting performanceRevenue and margin resilient throughout financial crisis and

transformation

Tax & AccountingAdjusted Operating Profit Margin

Tax & AccountingOrganic Revenue Growth


Note: 2009 figures are pro forma (Tax & Accounting division formed in 2010).


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Health

Tax & Accounting

Legal & Regulatory

Financial & ComplianceFinance, Risk &Compliance and Audit1)

+4%

Clinical Solutions

Tax & Accounting Software

Corporate Legal Services

% OrganicGrowth

1) Includes the Finance, Risk & Compliance and Audit units within the F&CS division. Wolters Kluwer organic growth 9M 2014: +1%

+7%

Leading, high growth units within divisions:(47% of total revenues)

Tax software is key to our growth agendaLeading high growth positions continue to perform well


Wolters Kluwer Revenue 9M 2014

Divisions:


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Wolters KluwerGlobal leader in Tax & Accounting

Tax & Accounting Investor Seminar, 9 December 2014 12

VIDEO


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Agenda

Introduction




Summary and Q&A

Break



Karen AbramsonCEO, Wolters Kluwer Tax &

Accounting


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A global businessLeading positions across the globe

United States Canada

Germany Italy SpainUnited Kingdom SwedenNorwayDenmark BelgiumNetherlands


AustraliaNew Zealand JapanHong Kong Singapore

Malaysia India China Brazil


Revenue by Geographic Market9M 2014

Europe33%

AsiaPac& ROW

11%

NorthAmerica

56%


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World leaderLeading global player in professional tax & accounting software

Source: Wolters Kluwer estimates, based on OC&C, company data and other sources. Includes professional and corporate tax & accounting software and publishing inthe US, Canada and Asia Pacific, and professional and corporate tax & accounting software in Brazil and 9 European countries. Excludes all SME and Consumersegments, and excludes Publishing in Europe

Global Addressable MarketTax & Accounting 2013

6 billion



#1 in North American professional tax &accounting software

#1 pan-European professional tax &accounting software player

Tax & Accounting Market Growth

Global Professional Software: 4-6%

Global Corporate Software: 8-10%

Global Publishing: 0-2%


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Competitive landscapeWell-positioned in professional software

Segment Region Wolters

Kluwer

Thomson

Reuters

Sage

Intuit

Others

Professionalall segments

NorthAmerica

South

America

Europe

Asia Pacific

Corporate

NorthAmerica

SouthAmerica

Europe

Asia Pacific

SME

Consumer

Vertex, CorpTax,Avalara

Xero, DATEV, MYOB,ADP, Exact, Lexware

Niche players, e.g.Drake

DATEV, Sistemi, Zucchetti,Visma, Exact

MYOB, APS, Handisoft,Xero

H&R Block, TaxACT,Jackson Hewitt

Tax & Accounting Software

Local players

Unit4, Oracle, SAP, IBM

Low High

Market Presence andBreadth of Offer


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Our missionHelping our customers grow, manage, and protect their businesses and

their clients businesses

Research Advise

file tax returns facilitate planning manage firmfind answers

Research Comply Advise Manage



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Our key strengthsLeading in technology, expertise, and customer support

TechnologyInnovation

Comprehensiveand GlobalCapabilities

Strong Sales& CustomerSupport


Trusted

DomainExpertise

CPA Practice Advisor: 2013 Technology Innovation Award Byte TI:2014 Award for the Best ERP of the Year 2014 CODiE Award: Best Enterprise Mobile Application (CCH Mobile) First to market with fully integrated cloud solution for US CPAs

2013 K2 Quality Award winner Tax Software Trusted to process and file 30% of US professional tax returns

First mover with IRS-approved e-Signature solution Over 1,000 content experts worldwide

Comprehensive coverage: 1,700 sales & support staff worldwide SFS named a Top 25 Mid-Size Call Center in 2014 by BenchmarkPortal Training provided to over 100,000 customers annually

Global software development centers of excellence in Dallas, TX (US),Barcelona (Spain), and Pune (India)

40 offices in 20 countries Global platform: Intelliconnect Cross-border products: Intelliconnect and iFirm

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Key product brandsOur brands are trusted leaders in their target markets

CCH iKnow

CCH IntelliConnect

Research Comply Advise Manage

CCH Mobile CCH iFirm


CCH Small Firm

CCH TaxPrepCCH Bold

CCH

CCH Axcess

CCH ProSystemfx

Addison/Steuertipps, Twinfield

a3, Ipsoa, Osra, Prosoft


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Our customersCustomers of all sizes rely on us


All of The Big

4210K The Fortune

500All of the Big 4 AccountingFirms use Wolters KluwerAll of the top

US and UKAccounting Firms

Firms210,000 firms worldwide relyon Wolters Kluwer solutions.

87% of

The Worlds Governing

Tax Authorities

Longstanding partnerships with

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Revenue performanceSteady organic growth in software outweighs declines elsewhere


Note: Revenue types based on pre-2014 product classification. 2009 figures are pro forma.

Wolters Kluwer Tax & AccountingOrganic Growth by Revenue Type

Wolters Kluwer Tax & AccountingOrganic Growth Software


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Highly recurring88% of revenues from subscriptions and other recurring revenue streams

Wolters Kluwer Tax & AccountingFY 2013 Revenues by Type (965 Million)

Digital and servicessubscriptions (69%) Software subscriptions

Software maintenance Online research and learningsubscriptions

E-book subscriptions

Other recurring (13%)

Recurring license fees Continuing education Certification programs E-filing fees Bank product fees E-signature fees

Note: 2013 figures based on 2014 product classification.


Other non-recurring (6%) Software license fees Training Professional services Events; seminars

Print subscriptions (6%) Loose-leaf publications Journals

Print books (6%) Print books (incl. standing

order)


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Increasing regulatory activity

Productivity pressure and price sensitivity

Sheer quantity of information is overwhelming

Globalization and growth of professionals in emerging markets

Profession in transition with retirement and new entrants

Global market trendsTransformation is everywhere in Tax & Accounting



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Tax & Accounting strategyInvesting in cloud-based, collaborative solutions and expanding

geographically while optimizing cost base

Expanding in cloud-based tax and accounting solutions Investing in collaborative solutions Driving growth in faster-growing geographies, including

Brazil and China

Launching innovative productivity tools CCH eSign, QuickAnswers, Intelliconnect Browser Search

CCH iKnow, CCH Mobile

Customizing global platforms for local requirements Leveraging global scale Building development centers of excellence Optimizing editorial processes and outsourced print

operations



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Modular product suitesWe offer an integrated ecosystem in each geography

Accounting

PayrollTax

Prosoft

Document

Portal

Tax

Workstream

Practice

CCH Axcess

Open Integration

App Platform

TAXOffice MgmtPayroll

Dashboard Doc Mgmt.

WorkflowAudit Rule Set

BIG DATA CRM

Twinfield

TwinApp

Store



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SummaryGlobal leader investing to expand

Global leader in Tax & Accounting

Highly recurring revenue

Strong market penetration inprofessional markets

Global leader in innovation

Investing in software growthwhile driving operatingefficiencies


CloudSoftware

Collaboration

GlobalExpansion


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Agenda

Teresa MackintoshPresident & CEO, Wolters KluwerTax & Accounting, CCH US

Introduction




Summary and Q&A

Break




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Moving to the Cloud: United StatesDelivering productivity gains to our customers


Collaboration

GlobalExpansion

Tax & Accounting United States

#1 in US professional software

Serving all of the top 100 USaccounting firms and 150,000 USprofessionals

Positive organic growth andexcellent margins

Investing in cloud-based solutions

CloudSoftware


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Our customers status quoTechnology boundaries hamper efficiency

Current State

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FirmAdmin

IT



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Market dynamicsProfessional firms goals and issues

Increased Focus on Client Services

Talent Management and Succession Planning

Technology Integration

Digital Mobility Opportunities

Source: Wolters Kluwer 2014 Accounting Firm Preparedness Survey



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Benefits of moving to the cloudKey reasons firm leaders want to move to the cloud

Source: AICPA Digital CPA Survey


Business continuity and quickerdisaster recovery

The ability for our firm to work

virtually and/or expand ourgeographic reach

Productivity improvements that canlead to more billable hours

Dont have to worry about softwareupdates, troubleshooting and

maintenance


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CCH Axcess differentiationThe first integrated cloud solution for tax and accounting professionals

Efficiently sharecommon data andservices across

modules as well aswith mobile and 3rdparties

Advanced integration data and servicesalways available at thepoint of need

Anytime, anywhereaccess allows firms to

deliver higher levels ofservice to their clients

Modular to allow firms

to adopt features andfunctions at their pace

Scalable for firms ofany size

End-to-end integratedworkflow tailored toneed


Source: AICPA Digital CPA Survey


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CCH AxcessArchitected and deployed for flexibility, extensibility and scalability

CCH Axcess Modules 3rdParty Applications (OIP)

CCH Axcess

PracticeCCH Axcess

Workstream

CCH Axcess Tax

CCH AxcessDocument / Portal

CCH Scan/AutoFlow

CCH eSign

Future modules

Web ServicesIntegration

Common Database

General Ledger/ERPMicrosoft ExcelMicrosoft WordMicrosoft OutlookCRMPayroll



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Modular product suiteFlexible and integrates easily

Portal

TaxPractice

Document

Workstream

O P E N I N T E G R A T I O N P L A T F O R M


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Delivering productivity gainsUnified device and application experience enabling best in class client

services

CCH AxcessCurrent State

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FirmAdmin

IT


Portal

Tax

Practice

Document

Workstream

O P E N I N T E G R A T I O N P L A T F O R M


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Long term business benefitsCloud solutions yield long-term customer relationship and growth

opportunities

Source: OC&C Professional Market Survey (April 2014); OC&C Analysis (May 2014)

New Customer Acquisition through Cloud Adoption

Additional module enablement providing more efficientand effective customer processes

Longer Retention of Committed Customers

Future Product Introduction

Front Office Evolution

Maximizing Customer Productivity & Technology Investment

Establishing the foundation for growth andhigher customer lifetime value



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Results to datePlatform performance and scaling to rising demand


4.95Out of 5Customers rated the CCH Axcessimplementation team 4.95 out of 5

28% of new salesare CCH Axcess

Most Recent Tax Season Performance

Tax returns migratedto CCH Axcess

CCH Axcess Tax return processingtripled from last years debut

The number of projects managed inCCH Axcess Workstream quadrupledfrom the previous season


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From industry experts and our customersUsers report significant productivity gains


VIDEO


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BenefitsMutual benefits to Wolters Kluwer and its customers and partners

Benefits to Wolters Kluwer Benefits to Customers

Competitively distinct platform todrive customer acquisition

Increased customer share of

wallet as platform enablesancillary product adoption

Increased retention (stickiness)

as number of modules increasesand the suite acts as foundationfor accounting firms production of

client work

Faster product development dueto open integration platform

First and only of its kind - coreunified database makes workflowmore efficient

Additional efficiencyimprovements are easy to createwith expansion on unifiedplatform

Provides ecosystem of additionalmodules for enhanced

functionality and unification including mobile apps

Offers best in class availability

and security of data


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Agenda

Introduction




Summary and Q&A

Break



Henri van EngelenMD, Wolters Kluwer Tax &Accounting Europe


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Collaborative solutions: EuropeEnabling our customers to collaborate with their clients


CloudSoftware

Collaboration

GlobalExpansion

Tax & Accounting Europe

European leader in professional tax

advisor segment Positive organic growth and good

margins

Serving over 55,000 tax advisors in9 European countries

Investing in collaborative solutions


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We will offer

connected,collaborative,smart &

easy-to-usebusiness solutions

...that createan ecosystemwith banks,

governmentalinstitutions & 3rdparty software

providers

to automateend-

to-end processes &to simplify tasks sothat our customers

& theirs can operatemost efficiently.


Supporting the European tax advisorHelping our customers deliver value to their clients


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Market trendsPressure on existing business models of tax advisors, transforming their

business


Younger generations demand ease of useand always on connectivity

Increasingly complex and fragmentedregulatory environment

Technology integration and mobility


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Maintainand conservativelygrow the business

Transaction-based services Hourly fees

Work is office-based

On-premise solutions

Process oriented

Personal relationships andphysical customer contacts

Tax advisors are evolvingChanging behavior brings challenges but also opportunities for our

customers

Commercial focus

The Traditionalist

Business models

Technology & tools

Client Interaction

Grow the business

Introduce sales & marketing

Predefined serviceofferings High value consultancy

Work is cloud-based & mobile

End-to-end processes in theextended enterprise

Online collaboration tools toenrich personal relationships

The Adventurer



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Benefits of collaborationMore efficient processes and interaction for the tax advisor and his clients

Cloud CollaborationTraditional On-Premise

Tax AdvisorSME client

Manual transactions Duplication of effort Frequent exports and

imports of backups Not simultaneous

BanksPartners

Government

Automated transactions Single data entry Central data storage,

security & back-up Real time

CRM

BI

Tax

Reports

Tax AdvisorSME client



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Workload sharingEnabling tax advisors to adjust to their clients needs and capabilities

Cashaccounting

Size

,needsandcapabilities

o

fTax

Advisors

client

Large

Medium

Small

Micro

Selfemployed

Workload Sharing Between Tax Advisor and SME

Book-keeping

FinancialStatements &Returns

Consulting

WorkloadSales &PurchaseInvoices

Performedby SME

Performedby Tax Advisor

Legend:



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Payments

AdvisorClient

Advisor portals Deloitte ctrl BDO Direct Van Oers Comfort

Example 2: Twinfield online accountingSmart accounting software from Twinfield with which entrepreneurs and

accountants can seamlessly collaborate

Real time information Better and faster insight Links to 200 complementary software


PartnersGovernment

Banks

Easy entry of invoices Automatic processing of invoices Reconciliation of bank statements Automatic timeline


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What our customers are sayingAnytime, anywhere access


VIDEO


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Results so farGrowing numbers are using our collaboration tools


Increase inonline software

revenue at Twinfield

50%Addison online softwarerevenues tripled from

2011 to 2014from 2011 to 2014

90,000 SME clients

are collaborating with over4,500 tax advisorsusing theAddison Collaboration Portal

In Germany

3X

Italian Portal

revenuesdoubled

from 2011 to 2014

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Own the core financialtransaction process between taxadvisor & SME supporting

increased retention Input stream for our tax

compliance solutions

Gateway to offer SME-solutionscreating new revenueopportunities

Internationally scalable, enablingus to leverage our investment

Simultaneous access to real timedata, driving productivityimprovements and client

satisfaction Able to balance workload

between tax advisor & SME

Seamless integration intoecosystem with banks,governments and partners

delivers all-round efficiencies

Offer best in class reachability,

availability & security of data


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Agenda

Introduction




Summary and Q&A

Break



Jason MarxPresident, Small Firm Services,US & Brazil


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Global expansion: BrazilLeveraging our domain expertise in faster growing geographies


CloudSoftware

Collaboration

Global

Expansion

Tax & Accounting Brazil

Leading player in Brazilianprofessional segment

Strong organic growth and goodmargins

Most comprehensive SPED solutionin the market

Supporting continued productdevelopment


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Brazilian environmentLatinAmericas largest economy is a market in transition

Growing at 10% plusannually asregulations rapidlyevolve(Source: Serie Estudos)

Compliance changesimpact the Tax,Accounting andPayroll markets

Economists projectGDP to expand 1.2%in 2015(Source: Bloomberg)

Brazil: the worlds seventh largest economy

New and complex tax regulations are growthdrivers for the Tax and Accounting industry

Overall Tax and Accounting market forsoftware currently estimated at US $1 billion



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Regulatory environmentMandatory compliance requirements are growth drivers

CUSTOMERCHALLENGES

Filing Tax Returns~2,600 hours annually

Mandatory E-filingElectronic data

requirements

Audit ExposureImprove data

inconsistencies & avoid

penalties

GROWTHOPPORTUNITIES

Leverage SPED compliancereforms

Expand start-to-finish taxand accountingcapabilities

Develop extensible

solutions to address smalland medium sizedbusinesses tax complianceneeds

REGULATORYENVIRONMENT

2008: Public DigitalBookkeeping System(SPED) established

2011: Mandatoryrequirements forelectronic filing

2013: Additional 4 millioncompanies are impactedby Payroll compliance



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SPED initiativeTax and accounting regulation spurs market opportunities

AccountingStandardized

electronic formatthat substitutestraditional paper

bookkeeping

E-InvoiceStandardized

electronic formatthat substitutestraditional paper

bookkeeping

PayrolleSocial regulationunifies employeeand payroll data

and reporting

SPEDPublic Digital Bookkeeping System

Tax

Centralizedpermanentelectronic

certificationsystem and tax

calculation registry


Note: SPED = Sistema Pblico de Escriturao Digital (Public Digital Bookkeeping System )


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Strategic acquisition of ProsoftLeveraging global compliance focus and local expertise

Acquired in May 2013 for 85 million Including deferred consideration

Annualized 2013 revenues of 28 million

Organic revenue growth >10%

Adjusted operating margin above groupaverage

Leading tax and accounting softwareprovider in Brazil

Established 1985

Over 250 employees

Strong local management team

Serving over 150,000 users

Cloud-based and on-premise software

Software license and maintenance model

Well established, leadingprovider of tax compliancesolutions in Brazil

Customer-centric,integrated compliancesolutions supporting SPED

Established distributionchannels



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Established coverageStrong national distribution network and established customer base

Clients range from small tomedium based accountingfirms and small mediumenterprise

Customers represented inall 27 state jurisdictions andthousands of municipalities

Established national salesand distribution model

Headquarters & Office Locations



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Customer-centric, integrated compliance solutionsCreating value by aligning compliance solutions to SPED requirements


AccountingPayrollTax

Office

Electronic Point

GED

DiagnosticsNFe Manager Tax Analyzer Tax Audit

CND

OFFICE2 CRM

CNPJ

GFC Small

Prosoft


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SPED compliance in actionA use case


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Our customersRely on us for collaborative solutions


Over 44,000 companies had their taxcertificates verified by Prosoft software

States26Our compliance products serve 26 states, plus federal,and over 5500 municipalities

Municipalities5,500FederalPeople trained this year

30,000

44KCompanies

10,000150,000

110,000

firms

users

questions and answers

in our online TaxGuidance Center

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Competitive landscapeProsoft has broadest product breadth and strongest distribution network

Aggressive investment inproduct solutions toaddress SPED

Product expansionoutpacing the competition

Distribution coverage -only national platform tocover all 26-state andfederal jurisdictions

Wolters

Kluwer

(Prosoft)

Alterdata

Contmatic

Thomson

Reuters

(Dominio)

Sage

(Folhamatic)

Mastermaq

Tax

Accounting

Payroll

SPED

ElectronicInvoice

Analyzer

Auditor

Distribution

Source: Crowe Horwath and Wolters Kluwer estimate


Low High

Market Presence andBreadth of Offer

Brazil: Tax & Accounting Software


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Leveraging Wolters Kluwers expertiseProven global practices to support Prosoft


Compliance expertise Go-to-Market Sales channel

management

Products and delivery Technology andarchitecture Process andBest Practices

Common developmenttools

Agile development

processes Mobile applications

Contextual designmethodologies

Customer NPS

Market research andsegmentation methods


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What our customers are sayingManaging increasing regulation and complexity

VIDEO


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Compliance opportunity in small-mid market is strong; Prosoft iswell positioned to grow

Regulatory solutions addressbreadth of SPED compliancerequirements in Brazil

Leverage global expertise andlocal implementation to serve

customers

Integrated tax, accounting andpayroll solutions built to meetcompliance requirements of SPED

Ecosystem of additionalcompliance modules for increasedfunctionality

Complete sales office coverageacross all 27 jurisdictions (26

state plus federal)


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Agenda

Introduction




Summary and Q&A

Break




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SummaryWolters Kluwer Tax & Accounting

Global leader in Tax & Accounting

Strategic focus on professional markets

Highly recurring revenue and best-in-class margins

Strong track record of innovation

Investing in software

Driving operating efficiencies



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Q&A

Investor Seminar

9 December 2014


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Thank you

Investor Seminar

9 December 2014

2014.12.09 Ta Investor Seminar

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Transcript of 2014.12.09 Ta Investor Seminar