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  • This slide can be substituted for the previous slide. These are just the customers who have given permission to be used as references…
  • Our leading customers have made major strides in tying their learning strategies to the their companies’ business strategies. As they increased their business focus, major trends we’ve seen in the learning strategies they are focused on include… Improving the accessibility and effectiveness of on-demand knowledge and learning access… with over 70% of workplace learning occurring through informal means - Blended learning Incorporating customer-specific content Supporting time-urgent business initiatives with learning strategies… recognizing that many key business initiatives can’t wait for the traditionally longer cycles that it took to develop supporting learning programs And integration… Customers are looking for provider partners who can bring robust solutions that reduce the need to integrate separate technologies. And for those customers that have made major investments in their learning infrastructure, customers are looking for providers who can integrate easily with that they have already implemented.
  • This slide INTRODUCES the 3 tiered strategy. Meant to show that there are vast resources provided to our customers…not meant to support a detailed discussion of each area. Content – main message is that we off an array of products. Technology – main message is that we have a flexible approach. We offer our own tools and integrate with third parties. Services – with the increasing complexity of e-learning, the importance of consulting and technical services cannot be overstated.
  • Books24x7’s ITPro, BusinessPro, FinancePro, and OfficeEssentials Referenceware libraries give subscribers online access to more than 4,900 unabridged books and reports from more than 85 publishers, including AMACOM, ASTD, Harvard Business School Publishing, McGraw-Hill, Sybex, and John Wiley & Sons. Approximately 25 to 45 titles are added to the libraries each week. Subscribers get access to all new titles added throughout the duration of their subscription period. ReferencePoints, developed by SkillSoft Press, are 40 to 60 page documents on emerging technologies, offered to provide information on these topics in advance of the traditional book publishing cycle. Examples of ReferencePoints include: Oracle 11i, Natural Language Processing, and computer telephony integration. Collaboration features give users the ability to set up and share bookshelves, make and share notations, send email notices, and bookmark.
  • A flexible, lightweight system that is tailored to e-learning and blended learning. A great value for price. Can be implemented more rapidly than other more complex learning management systems. Search-and-Learn is key feature. (highlighted in coming slide)
  • CCT Ideal “Profile” for this tool Has license for SKillSoft Business Skills Course library Has Subject Matter Experts, Instructional Designers, Trainers at their disposal Has little or no technical/programming expertise Has a short-term deadline to meet CCT FACTS/FIGURES SkillSoft CCT has been used by over 75 companies Tool used by SkillSoft to create business skills courses (2100 SkillSoft collection, hundreds of custom) Leverage SkillSoft instructional design expertise for consistent quality Leverage existing library and process to “Fast Track” customer’s development needs Modify: Add/modify organizational specific content and illustrations Mix and Match: Combine topics and learning objects from licensed SkillSoft courses New Content: Develop new courseware from scratch CCT is tightly coupled to SkillSoft Industry-leading Instructional Design Methodology All courses authored in CCT will: have a high level of instructional integrity look and feel just like SkillSoft business skills courses draw from a rich library of instructional templates automatically generate pre and post tests
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    1. 1. Ahead of the Learning Curve Investor Presentation CSFB Chuck Moran, President and CEO Tom McDonald, CFO March 14 th 2005
    2. 2. Safe Harbor This presentation includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements. Factors that could cause or contribute to such differences include competitive pressures, changes in customer demands or industry standards, adverse economic conditions, loss of key personnel, litigation and other risk factors disclosed under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations - Future Operating Results” in SkillSoft's Quarterly Report on Form 10-Q for the quarter ended October 31, 2004, as filed with the Securities and Exchange Commission. The forward-looking statements provided by the Company in this presentation represent the Company’s views as of March 14, 2005. The Company anticipates that subsequent events and developments may cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this presentation.
    3. 3. SkillSoft Overview <ul><li>SkillSoft is the largest public company in the world with a sole focus on e-Learning </li></ul><ul><li>Uniquely positioned to help global enterprises leverage e-learning for maximum impact over the long-term </li></ul><ul><li>Dual excellence in e-learning content & technology </li></ul><ul><ul><li>Content </li></ul></ul><ul><ul><ul><li>14,000+ titles of high-quality e-learning content in 15 languages </li></ul></ul></ul><ul><ul><ul><li>Offerings cover full spectrum of enterprise learning needs with courseware, SkillSimulations, 24x7 live online mentoring and Referenceware® by Books24x7® </li></ul></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><ul><li>SkillPort , a flexible platform for customizing, delivering, managing and reporting on e-learning </li></ul></ul></ul><ul><ul><ul><li>Search-and-Learn™ technology gives learners an integrated view of all learning assets </li></ul></ul></ul><ul><ul><ul><li>SkillSoft® Dialogue™ Virtual Classroom technology to support blended learning and rapid content design </li></ul></ul></ul>
    4. 4. SkillSoft Corporate Highlights <ul><li>Largest direct sales & support organization in e-learning industry with approximately 200 quota carrying direct sales reps </li></ul><ul><li>Investment in Telesales for Small & Midsize Corp. </li></ul><ul><li>Approximately 18% of revenue invested in R&D annually </li></ul><ul><li>Ownership of all major content and technology products </li></ul><ul><li>Systematic customer feedback process ensures market focus </li></ul><ul><li>Serving Global 5000 customer base* </li></ul>* Excluding SmartCertify Direct business unit which serves the retail market
    5. 5. A Sampling of SkillSoft Customers Manufacturing PBR Media Yahoo! Pharmaceuticals Merck Staffing K-Force Manpower Robert Half Administaff Telecommunications Avaya Marconi TELUS Financial Services ING Mellon Financial PSCU Financial Services Government & Education US Air Force US Army Australian Government University of Iowa Healthcare Christiana Care CIGNA Health Partners Humana McKesson Saint Barnabas Energy Shell Consulting & Business Services Accenture ADP Booz Allen Hamilton Ceridian Deloitte IKON CSC Experion IBM SAIC Unisys Aerospace & Defense Northrop Grumman Automotive Honda Toyota Hyundai Computer Hewlett Packard Consumer Products Castrol/BP Lubricants Del Monte Foods Allied Domecq Electronic Components Aegis Flextronics Solectron
    6. 6. Priorities of Strategic Learning Organizations <ul><li>Alignment of learning with the business </li></ul><ul><li>On-demand learning </li></ul><ul><li>Blended learning </li></ul><ul><li>Need to integrate customer-specific content </li></ul><ul><li>Need to tailor to individual job roles </li></ul><ul><li>“ Speed-to-learning” more important than ever before </li></ul><ul><li>Integrating silo technologies is a major challenge </li></ul>
    7. 7. SkillSoft’s Rapidly Evolving Solution <ul><li>Content </li></ul><ul><ul><li>An array of multi-modal content products to support all aspects of corporate learning </li></ul></ul><ul><li>Technology </li></ul><ul><ul><li>Flexible delivery systems to enable learning within the daily flow of work and integration with other enterprise systems </li></ul></ul><ul><li>Services </li></ul><ul><ul><li>Comprehensive service offerings to optimize corporate learning initiatives at all points in the learning lifecycle </li></ul></ul>Search-and-Learn™ Legal Compliance Courseware Desktop Skills Courseware IT Skills Courseware Business Skills Courseware ES&H Compliance Courseware Dialogue Virtual Classroom Comprehensive Services ExecSummaries BusinessPro Referenceware OfficeEssentials Referenceware FinancePro Referenceware ITPro Referenceware EngineeringPro Referenceware ExecBluePrints SkillPort 3rd Party LMS Support Course Customization Toolkit SkillStudio ILT Management Credentialing Management Customer Content Support Advanced Report Module Expert-led Certifications TestPreps Blended Learning Toolkits Express Guides Job Aids Simulations Mentoring SkillBriefs
    8. 8. SkillSoft Courseware Collections <ul><li>Business Skills </li></ul><ul><ul><li>2,400+ courses in 14 languages </li></ul></ul><ul><ul><li>Award-winning learning design </li></ul></ul><ul><ul><li>Collection Includes SkillSimulations, Job Aids, SkillBriefs, Blended Learning Toolkits </li></ul></ul><ul><li>Information Technology </li></ul><ul><ul><li>2,300+ courses in 11 languages </li></ul></ul><ul><ul><li>Over 80 major IT certification exams covered </li></ul></ul><ul><ul><li>Includes Express Guides, TestPrep Exams and 24x7x365 online mentoring </li></ul></ul><ul><li>Compliance </li></ul><ul><ul><li>150+ courses </li></ul></ul><ul><ul><li>Environmental Safety & Health </li></ul></ul><ul><ul><li>Legal compliance & corporate governance </li></ul></ul>Business Solution Areas: Professional Effectiveness Management/Leadership Project Management Sales & Customer-Facing Skills Business Strategy & Operations Finance Human Resources Environmental Safety & Health Financial Services Workplace Compliance IT Solution Areas: Software Development Operating Systems & Servers Internet & Network Technologies Enterprise Database Systems Web Design Desktop Computer Skills
    9. 9. Books24x7 ™ Referenceware ® <ul><li>Largest collection of books online and most flexible licensing model </li></ul><ul><ul><li>Over 7,200 unabridged titles </li></ul></ul><ul><ul><li>Over 2,500 ReferencePoints </li></ul></ul><ul><ul><li>Over 1,700 new books added in 2005 </li></ul></ul><ul><li>Utilization in 2004 </li></ul><ul><ul><li>Over 44 million pages served </li></ul></ul><ul><ul><li>Over 1.5 million hours of instant learning </li></ul></ul><ul><ul><li>Average use 17 minutes/session </li></ul></ul><ul><li>Coming in early 2005 </li></ul><ul><ul><li>ExecBlueprints™ Collections </li></ul></ul><ul><ul><li>Government Essentials™ Collection </li></ul></ul>
    10. 10. SkillPort LMS <ul><li>Scalable, reliable, flexible </li></ul><ul><li>Search-and-Learn™ provides unified discovery/view/ access of all e-learning assets on system </li></ul><ul><li>Low IT support requirements </li></ul><ul><li>Support wide range of global users </li></ul><ul><ul><li>User interface in 8 languages </li></ul></ul><ul><li>Strong management and reporting capabilities relevant to e-learning and blended learning </li></ul># of Customers using SkillPort LMS Over 1200 customers
    11. 11. Customization & Authoring Technology 3 Approaches to our Customers’ Needs <ul><li>Course Customization Toolkit (CCT) Allows customers to customize existing business skills courses or create their own instructionally-sound courses using SkillSoft methodology. Permits page level editing of text/graphics/audio. </li></ul><ul><li>Coming in 2005: SkillStudio A more robust authoring tool that will allow creation, editing and mix-and-match across business and IT titles created in unified architecture. </li></ul><ul><li>SkillSoft’s Custom Solutions Group Can be engaged for customization or full course development </li></ul>
    12. 12. SkillSoft ® Dialogue™ * Newest Addition to SkillSoft’s e-learning Solution <ul><li>Dialogue Live </li></ul><ul><li>Hold virtual meetings, classes and training sessions </li></ul><ul><li>Dialogue Design </li></ul><ul><li>Organize and build your presentations </li></ul><ul><li>Dialogue Resource </li></ul><ul><li>Strengthen your sessions with a vast SkillSoft repository </li></ul>* Planned commercial release in fiscal 2006
    13. 13. New Products Released and To Be Released <ul><li>Recently Released </li></ul><ul><li>Engineering Pro </li></ul><ul><li>ExecSummaries </li></ul><ul><li>ExecBlueprints </li></ul><ul><li>To Be Released </li></ul><ul><li>Dialogue </li></ul><ul><li>Gov Essentials </li></ul><ul><li>Legal Compliance </li></ul><ul><li>Expert-led Certification Programs </li></ul>
    14. 14. Financial Highlights <ul><li>Cash of $65 million at 1/31/2005 </li></ul><ul><li>Guaranteed Revenue Backlog at 1/31/05 for FY06 of approximately $168M or approximately 83% of midpoint FY06 Revenue Target </li></ul><ul><li>Costs to support SEC investigation and re-filing of tax returns relating to the restatement of SmartForce historical financial statements ongoing at $500K per quarter </li></ul><ul><li>48% Renewal Rate FY05/CY04 used to model FY06/CY05 </li></ul><ul><li>120 % Upgrade Rate FY05/CY04 used to model FY06/CY05 </li></ul><ul><li>New Combined Dollar Renewal Rate of 91% </li></ul><ul><li>Investment of $3.8M in FY05 for launch of new Virtual Classroom product offering </li></ul><ul><li>SmartCertify subsidiary pending sale transaction </li></ul><ul><li>$600K payment per amended employment agreement to Greg Priest </li></ul>
    15. 15. Fiscal 2005 Target Update <ul><li>Revenue expected to be at lower end of previously estimated range of $212M and $217M </li></ul><ul><li>Net income (excluding restructure) expected to be at lower end of previously estimated range of $0.11 to $0.15 per basic and diluted share </li></ul><ul><li>Restructuring charge not expected to exceed $15M and is not included in the $0.11 to $0.15 EPS estimated range </li></ul><ul><li>Net DSO’s of 19 days; Gross DSO’s of 142 days </li></ul><ul><li>Fourth quarter average annual contract value of $135,000 </li></ul><ul><li>Fourth quarter average contract length 19 months </li></ul>
    16. 16. Fiscal 2006 Financial Target
    17. 17. Fiscal 2006 Financial Target <ul><li>(1) Net Income Excluded: </li></ul><ul><li>Foreign exchange gains or losses </li></ul><ul><li>Expensing of stock options (Third quarter of fiscal 2006) </li></ul><ul><li>Any settlement with Company’s insurers related to 2002 class action litigation settlement, related litigation and SEC investigation </li></ul><ul><li>Potential negative impact of resolution of litigation matters and potential restructuring charges </li></ul><ul><li>Potential impact of any future acquisitions or divestitures, including potential non-recurring acquisition related expenses and amortization of any purchased intangibles and deferred compensation charges resulting from an acquisition transaction </li></ul><ul><li>Effect of a public offering or other financing arrangements that could impact outstanding shares and thereby the Company’s EPS outlook </li></ul>
    18. 18. Fiscal 2006 Tax Provision <ul><li>Highlights: </li></ul><ul><li>SkillSoft strategy is to maximize cash by minimizing the CASH effective tax rate </li></ul><ul><li>Utilized $22M of NETg settlement reducing taxable income in FY05 </li></ul><ul><li>FY06 projected annual cash tax rate to 4.0% - 6.0% and total provision projected 28% - 34%; US Fed NOL’s of $350M </li></ul><ul><li>Acquired NOL (SmartForce) are the oldest and must be used first (FIFO) and have an annual limitation cap </li></ul><ul><li>Skillsoft historic NOL’s serve to drive the effective tax rate significantly lower than acquired NOL’s </li></ul><ul><li>Tax benefit for acquired NOL’s utilized reduces Goodwill </li></ul><ul><li>For financial statement purposes SkillSoft will provide full tax expense (non-cash) on any profit sheltered by acquired NOL </li></ul><ul><li>Limitations on utilization of acquired NOL per year </li></ul><ul><li>NOL generated as SkillSoft standalone and as a combined company after 9/6/2002 can be used against income to reduce tax expense </li></ul>
    19. 19. Estimated Tax Schedule
    20. 20. Operating Model Revenue 100 % 100 % GM 88-90 % 88-90 % R&D 18-19 % 17-18 % S&M 44- 45 % 40-42 % G&A 12- 13% 10-11 % G&A † 1% † SEC Investigation & re-filing tax returns due to restatement Current CY05/FY06 % (est) Target Long-term % (est)
    21. 21. Ahead of the Learning Curve

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