Swets: From a Canal to the Information Superhighway

1. Jan Vos - CFO

2. From a canal to the information superhighway Founded in 1901 as a bookshop on a canal in Amsterdam. Today Swets is the largest global player in the management of acquiring, accessing and managing information.

3. A century of stability and growth • Founded by Adriaan Swets & Heinrich Zeitlinger in 1901. • Swets bought out Zeitlinger after just one year. • Swets remained 100% owned by the Swets family until the mid-nineties. • A group of external investors took a majority stake in Swets for over a decade. • In 2007, Swets was sold to Gilde, one of the premium investment firms in the Netherlands. • In 2008/09 Swets opened offices in India, New Zealand, Finland, Austria & Switzerland • Also in 2008 Swets acquired Boekhandel E. Frencken BV

4. Value proposition of Agents an Agent adds value to it’s customers and publishers • Simplifying the many-to-many relationships • Offering choice to customers • Offering an attractive indirect sales channel to publishers

5. Customer Offer/renewal Price & title info Supplier Order/renewal Order/renewal Invoice Invoice Payment Payment Supply subscription Supply subscription Supply subscription The primary business processes of Agents

6. Our services for Information Professionals Without an Agent Customers face a complex administration process with every single publisher Many relationships: • Generates unnecessary costs • Wastes valuable time • Offering an attractive indirect sales channel to publishers

7. Our services for Information Professionals With an Agent Gain the freedom to focus on what’s most important to you and your organization • Reduced time and effort devoted to administering subscriptions • More control over your subscriptions investment • Improved management of e-journal licenses • Enhanced journal processing capabilities

8. Service offerings for Publishers Without an Agent Publishers face a complex administration process with every single subscriber • Generates unnecessary costs • Wastes valuable time • Duplication of effort & content

9. Service offerings for Publishers With an Agent Extend your reach & expand your visibility • Extend your reach to buyers and users across the globe • Establish or grow your presence in leading and emerging markets • Control your financing costs • Ensure your customers get outstanding service and support • Remove the time and headaches in managing the distribution of subscriptions yourself

10. As an Intermediary it is an Agents’ primary role to facilitate transactions between multiple customers and multiple publishers Success is determined by the ability of the Agent to bridge the gap between non-congruent Customer and publisher demands As with all non-financial elements (ordering, catalogue management, shipment, processing etc) wants to facilitate demands on both sides The role of Agents in the financial planning cycle

11. Customer Demands Local players Funding timing dependent on local rules One invoice per faculty Invoice in own local currency Payment and authorization processes not always up to speed No currency risk Country risk not manageable Customers want interest fee on excess cash Sub-standard processes and systems VAT – issues when dealing with foreign publishers Publisher Demands Global players Payment to be received in advance of sub-year Invoice per title or institute Invoice in own local currency Strict guidelines on payment terms No currency risk – albeit on a different currency Country risk needs to be managed Publishers usually not able to give interest fees Sub-standard processes and systems VAT – issues when dealing with foreign customers The role of an Agent in the financial planning cycle

12. Working Capital management Invoicing procedures Management Exchange rate management Country risk management What roles does an Agent perform to facilitate financially transactions

13. In the second and third quarter of any year Customers make prepayments towards the agent Swets pays an interest fee on those prepayments Around August most customers start ordering their subscriptions for the coming year Typically Publishers wish to receive the payment alongside the order Publishers are not always able to invoice in time an Agent invoices the customers and collects the cash as soon as possible Before the end of the year an Agent puts the order and the payment with the publisher What roles does an Agent perform to facilitate financially transactions – Working capital Management Cycle - 1

14. What roles does an Agent perform to facilitate financially transactions – Working capital Management Cycle - 2 • In certain countries prepayments on behalf of the customers need to be made • an Agent can make those prepayments against an interest fee

15. As most customers want invoices specified the way they can manage best most publishers are not able to do that As an agent Swets is able to generate invoices towards Customers irrespective of Invoices send from publishers Swets put in right VAT/Sales tax on both sides and acts as a clearing house As the majority of transactions is in Q4 / Q1 VAT - maintenance takes place in Q2/Q3 What roles does an Agent perform to facilitate financially transactions – Invoicing Procedures Management

16. Given many transactions every year foreign currency flows are highly predictable over time Typically Swets is able to match the majority of currency exposure internally The remainder is hedged via external parties As such an Agent is able to meet both Publishers’ and Customers’ needs to de protected against currency fluctuations within the year What roles does an Agent perform to facilitate financially transactions – Exchange rate management

17. Country risk management typical theme since the credit-crunch Usually Customers have low to zero debtor risk given government backing in almost every country For publishers there are two main risks : Default of a country Corporate debtors Country-defaults have not occurred for a long time but are very actual an Agent acts as a partner to discuss and manage these risks between Customers and Publsihers What roles does an Agent perform to facilitate financially transactions - Country risk Management

18. As an Intermediary it is Swets’ primary role to facilitate transactions between multiple customers and multiple publishers Success is determined by the ability of Swets to bridge the gap between non-congruent Customer and publisher demands As with all non-financial elements (ordering, catalogue management, shipment, processing etc) Swets wants to facilitate demands on both sides The role of Swets in the financial planning cycle