Factset Research Systems Inc. · NYSE:FDS
Factset Research Systems — Investor Day (April 2018)
70 slides from Factset Research Systems's investor day presentation, Apr 18, 2018
Slide 1: Investor Day 2018
INVESTOR DAY | 2018 SEE THE ADVANTAGE ) F/\CTSET.
Slide 2: Welcome
Slide 3: Agenda
Agenda 9:00-9:05 am. INTRODUCTION + AGENDA 9:05-9:15 am. BUSINESS + STRATEGIC OVERVIEW 9:15-9:30 am. TECHNOLOGY +FINTECH INDUSTRY 9:30-9:50 am. PORTFOLIO MANAGEMENT + TRADING 9:50 - 10:05 a.m. BREAK + PRODUCT DEMONSTRATIONS 10:08 - 10:25 a.m, ANALYTICS 10:25 - 10:45 a.m. CONTENT + TECHNOLOGY SOLUTIO
Slide 4: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures This presentation, and other statements that FactSet may make, may contain forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, incl
Slide 5: Business + Strategic Overview
SEE THE ADVANTAGE ) F/\CTSET BUSINESS + STRATEGIC OVERVIEW Phil Snow
Slide 6: Our Mission
Our Mission SOLVE OUR CLIENTS’ GREATEST CHALLENGES WITH THE POWER OF COLLABORATION SEE THE ADVANTAGE
Slide 7: Our Scale
Our Scale ORGANIC ANNUAL SUBSCRIPTION VALUE (ASV) INCREASE GLOBAL USERS GLOBAL CLIENTS GLOBAL FOOTPRINT (COUNTRIES) YEARS OF CONSECUTIVE REVENUE GROWTH SEE THE ADVANTAGE
Slide 8: Our Market
Our Market % % 2017 Total Market Growth, Year-Over-Year OTHER 39.8% BLOOMBERG 33.2% (ee oon ieee a sua Seog Seema fg Seer et wee aces Aga ea ou Pi SEE THE ADVANTAGE
Slide 9: Our Advantage
Our Advantage CONTENT ANALYTICS TECHNOLOGY SERVICES ‘We map and link unique From fundamental and Our customized and Rely on our team of experts datasets from proprietary Quantitative research to flexible technologies allow to help you implement and and third-party sources to risk and performance you
Slide 10: Our Workflow Solutions
Our Workflow Solutions a a PMT ANAL Portfolio Management and Trading SEE THE ADVANTAGE
Slide 11: Committed to Returning Capital to Shareholders
Committed to Returning Capital to Shareholders (Ge miions) — ‘3500 $400 Average Cash Returned to Shareholders as, a % of Free Cash Flow and Proceeds from Employee Stock Plans 92% $300 $200 $100 18 16 LTu 0213 ‘=Cash Dividends ‘Share Repurchases FACTSET ) SEE THE ADVANTAGE
Slide 12: Investment Highlights
Investment Highlights AWARD WINNING SOLUTIONS STRONG COMPETITIVE POSITIONING oy 9948 Cte _ pi) jit: SEE THE ADVANTAGE
Slide 13: Technology + Fintech Industry Overview
SEE THE ADVANTAGE ) F/\CTSET TECHNOLOGY + FINTECH INDUSTRY OVERVIEW Gene Fernandez
Slide 14: FactSet Opportunity
FactSet Opportunity DISRUPTION CREATES OPPORTUNITIES + Our market and client base are at an inflection point ET ) SEE THE ADVANTAGE co
Slide 15: FactSet in the Industry
FactSet in the Industry WHAT DO CLIENTS THUNK Ob SRAlGsES rama ‘SET ) SEE THE ADVANTAGE stan was 18
Slide 16: Changing Market
Changing Market Sell-Side RAISING CAPITAL as > & fim gY —__. fim ——___- 2 ESS es Market Dynamics Outcomes + inreaseReguaton pressure + Margin Compression « Inoteases Compliance cost « Inerease automation efcency * HeigntenesSecurty tect reduce obor cost * BroingTrancpareney + Harketconsoidaton + 3"
Slide 17: Focus Areas
Focus Areas PROJECT NEXT GEN DEVELOPER EFFICIENCY EMERGING TECHNOLOGIES Eliminate much ofthe technical debt - Target code completion by year endand client migrations by endof calendaryear 2019 Automate where possible— drive a culture of collaboration through software, service based APIs, open source
Slide 18: Portfolio Management + Trading Overview
SEE THE ADVANTAGE ) F/\CTSET PORTFOLIO MANAGEMENT + TRADING OVERVIEW John Adam
Slide 19: Workflow Solutions
Workflow Solutions SEE THE ADVANTAGE
Slide 20: The Evolution of Front Office Trading Technology
The Evolution of Front Office Trading Technology Unification of data, analytics, andmulti-asset execution management, fortumkey Broker Execution Predicve Integration between trade Order Management Management Muit-Broker Global Trade Anaivies with "execution angportoto ‘Systems (OMS) ‘Systems (EMS) A
Slide 21: Putting All of the Pieces Together
Putting All of the Pieces Together SUPPORTING THE PORTFOLIO LIFECYCLE PORTFOLIO MANAGEMENT & TRADING SOLUTIONS OEMS (C7) cymba technologies A FACTSET Busines PORTWARE ARACTSET Trading FACTSET ) SEE THE ADVANTAGE
Slide 22: Sizing the Order / Execution Management Systems Markets
Sizing the Order / Execution Management Systems Markets BUY-SIDE OMS AND EMS USAGE BY THE NUMBERS + Greenwich Associates estimates that buy-side trading desks paid $4.8 billion to cover trading desk technology obligations in 2015. gy 9) 80"% * An additional $1.1 billion, or ee pay ECGS 23%, pays for
Slide 23: Fragmented Front Office Technologies Create Inefficiencies
Fragmented Front Office Technologies Create Inefficiencies
Slide 24: Portfolio Managers + Traders are Feeling the Pain
Portfolio Managers + Traders are Feeling the Pain ee “ft MANUAL “ONE-SIZE- 4 j a PROCESS FITS-NONE” : Institutional investors are lacking Fragmented systemswith ¥ match the investment process. ch a ; i INCO ma £ INFORMATION Analytics are out of date or stale ina marketthat is moving fasterthan ever.
Slide 25: What Makes FactSet Portfolio Management + Trading Unique?
What Makes FactSet Portfolio Management + Trading Unique? | ol ie ~ —— ee _, AUTOMATION INTEGRATION INFORMATION Wenandlemarelaw-ouch orders We integrate front, middle, We are a leading integrator of forthe buy-side better tran angback offce systems realtime analicsciticalto mast competitors beter th
Slide 26: Why FactSet PMT?
Why FactSet PMT? INTEGRATION, AUTOMATION, INFORMATION IN AN OPEN PLATFORM PORTFOLIO MANAGEMENT Portfolio Monitoring Trade Simulation Risk Management Regulatory Compliance EXECUTION MANAGEMENT + Multi-Asset Trade Execution + Broker Neutrality + Analytics & TCA. + 600+ Certified Trading Destinations A
Slide 27: Slide 27
Slide 28: Analytics Overview: Today + Beyond
SEE THE ADVANTAGE ) F/\CTSET ANALYTICS OVERVIEW: TODAY + BEYOND Rob Robie
Slide 29: Workflow Solutions: Analytics
Workflow Solutions ANALYTICS SEE THE ADVANTAGE
Slide 30: Analytics Market
Analytics Market ee — — FactSet Position: = Global assets under management in all markets continue to grow. + From the shift of active to passive, to the new complexities of measuring risk and returns of alternatives assets — the advancementof Analytical tools required to assist with the management
Slide 31: Our Global Clients: Where We Win
Our Global Clients: Where We Win HIGHLIGHTS GROWTH IS HAPPENING GLOBALLY WITH GROWTH ACR ALL FIRM TYP DRIVERS ARE LARGE ASSET MANAGERS UPTICK IN APAC PLAN SPONSORS, SOVEREIGN WEALTH FUN + Asset Managers + Insurance Companies + Pension Funds — Small, Medium, and Large Asset — Large Life Insurers — St
Slide 32: Analytics Continues Strong Growth
Analytics Continues Strong Growth ‘SEE THE ADVANTAGE PRIMARY GROWTH) PILLARS INTEGRATE BISAM + VERMILION ACQUISITIONS Execute onintegration plan or a single ‘workflow and data concordance between FactSet, BISAM, Cognity and Vermilion. INCUBATE NEW BUSINESS LINE Build dedicated plan andteams for grow
Slide 33: What Differentiates FactSet: Analytics, Infrastructure, and Technology
What Differentiates FactSet: Analytics, Infrastructure, and Technology Portfolio Analytics + Muiti-Asset Class Analytics + FactSet Content + Industry Partners CANADA = complete coverage + AllAsset Types Globally Equities, Fixed Income, Currencies, Derivatives + Muiti-Asset Class Risk + Build: FactSe
Slide 34: Why Risk Matters?
Why Risk Matters? pal Existing Markets Growing Needs MARKET STRUCTURE EVOLUTION ‘SEE THE ADVANTAGE
Slide 35: The Evolution of Our Risk Offering
The Evolution of Our Risk Offering PORTFOLIO PORTFOLIO pont aie ANALYSIS SERVICES LIFECYCLE 7) MAC Enterprise PONORTHFIELD Pseisbeter- MAC Cognity® Risk Solution powered by Cognity Rem (Ms tiiac 1998 2013 2017 Single Asset-Class First FDS-built 34 Party Models MAC Risk Model Single Portfolio Analysi
Slide 36: Bringing the Front and Middle Office Together
Bringing the Front and Middle Office Together The combined power of FactSet, BISAM, Cognity, and Vermilion PHASE 1: Empower BISAM B-One with FactSet PHASE 3: Single Workflow + Link to Reporting FACTSET TW vention FACTSET ) SEE THE ADVANTAGE
Slide 37: Regulatory Solutions
Regulatory Solutions Connect FactSet's industry-leading Analytics and unique content with emerging RegTech and industry subject matter expertise to reduce regulatory complexity, cost, and exposure. + Global scope, initial focus on US and Europe + Diverse subject matter experts, partnering in the gap
Slide 38: Index Solutions
Index Solutions ALTERNATIVE DATA Powering index innovation Unique, proprietary content — “All-Data"- isthe new oll powering innovation across. the alpha-to-beta * Shipping Data + RBICS withTradenames + GeoCountry of Risk ET ) SEE THE ADVANTAGE # INDEXES 67
Slide 39: Analytics API
Analytics API Analytics APIs. Where We Are: Analytics Beyond APIs + Active build underway and beta release + Machine Learning + Clusters + Arificial intelligence + Asset Association + Deep Leaming SEE THE ADVANTAGE
Slide 40: Content + Technology Solutions Overview
SEE THE ADVANTAGE ) F/\CTSET CONTENT + TECHNOLOGY SOLUTIONS OVERVIEW Rich Newman Lauren Kline
Slide 41: Workflow Solutions
Workflow Solutions SEE THE ADVANTAGE
Slide 42: CTS has a Solid Foundation in Financial Data and Technology
CTS has a Solid Foundation in Financial Data and Technology — Custom Standard Open:FactSet ) Data Feeds Data Feeds Marketplace 7/0 + + + + % of Annual ASV from CTS. 2000 2010 2018 4 ‘ 4 Production Efficiency + Scale Alternative Intricacies Challenges Data alld, FACTSET ) SEE THE ADVANTAGE coos
Slide 43: FactSet has the Competitive Advantage
FactSet has the Competitive Advantage FACTSET REFERENCE HUB with the CTS Team and Product Suite SYMBOLOGY EXPERTISE Our ability to map andlinkunique Our CTS team provides an datasets from proprietary and third- outstanding service experience party sources enables us to provide helping with theirenti
Slide 44: The Financial Industry is Shifting to Embrace New Technologies and Processes
The Financial Industry is Shifting to Embrace New Technologies and Processes GROWTHAIN ALTERNATIVE DATA e . ry INFINITE COMPUTING POWER MACHINE LEARNING DATA SCIENCE AS A DISCIPLINE
Slide 45: Introducing the Open:FactSet Marketplace
Introducing the Open:FactSet Marketplace SES SEE THE ADVANTAGE
Slide 46: What's Next?
What's Next? res f HOSTED EXPANSION HOSTED OF NUMBER QUANTITATIVE RESEARCH OF PROVIDERS PLATFORM & ENVIRONMENT ZO ) CTSis dedicated to providing the financial data that matters to The Open:FactSet Marketplace allows our clients to discover solutions that give investment professionals an edge. ACCELE
Slide 47: Sales Strategy
SEE THE ADVANTAGE ) F/\CTSET SALES STRATEGY John Wiseman
Slide 48: Our Approach — Focus, Engage, Act
Our Approach — Focus, Engage, Act INCREASE CROSS / UPSELLING OPPORTUNITIES TO E 4. ELEVATE OUR APPROACH TO OUR MOST STRATEGIC BEE Ld hee aoa SEE THE ADVANTAGE ° : .
Slide 49: The Global Sales Mission is Aligned with the Company Mission
The Global Sales Mission is Aligned with the Company Mission SOLVE OUR CLIENTS’ GREATEST CHALLENGES WITH THE POWER OF COLLABORATION De pn aiea SEE THE ADVANTAGE
Slide 50: Why We Win
Why We Win BEST MIX OF QUALITY DATA Leading mixof data from any source. High quality, concorded, Unique. FDS concords unique content with the highestlevel of data integrity SEE THE ADVANTAGE LEADING ANALYTICAL APPLICATIONS Growing suite of award-winning, bestiin-class applications, providing more so
Slide 51: Our Best in Class Client Service Model
Our Best in Class Client Service Model aime = ienestaon (5¢) @ sents Client Solutions C=) Cent Data integration ental L| Training and Development 1000+ 28 27 95% 42 PEOPLE OFFICES (QUERIES/MONTH SATISFACTION. RATE VISTSYEAR ) SEE THE ADVANTAGE
Slide 52: Americas - The Landscape
AMERICAS - The Landscape Regional Drivers and Themes: + Consolidation and cost pressures AMERICAS GROWTH* + Active to Passive + Relative to EMEA and APAC: + Stronger brand recognition and awareness + More balance and maturity across client types + More homogenous market + Increasing demand for Multi
Slide 53: EMEA - The Landscape
EMEA - The Landscape Regional Drivers and Themes: + Consolidation and cost pressures * + Active to Passive GROWTH + BREXIT “Fog” + Heightened Regulatory Posture + Greater demand for Multi-Asset Class and Risk, notably Fixed Income + Strong focus on Wealth Management and Sovereign Funds CLIENT-FACING
Slide 54: APAC — The Landscape
APAC — The Landscape Regional Drivers and Themes: + Fragmented Marketplace * + More Local / Domestic Markets - ASIA-PAC GROWTH Hong Kong and Singapore exceptions + Entrenched Local incumbents + WIND (China), IRESS(Australia), QUICK(Japan), WiseFN (Korea) + Greater needs for local language content an
Slide 55: Services Feeds /ari
Services Feeds /ari Machine Learning Partnerships FACTSET ) SEE THE abv.
Slide 56: Break
Slide 57: Financial Update
SEE THE ADVANTAGE ) F/\CTSET FINANCIAL UPDATE Maurizio Nicolelli
Slide 58: Solid Execution Leads to Consistent Growth
Solid Execution Leads to Consistent Growth anes Date Range 20Fee 21028 Feb. 18>) 100,000,000 a. 40 3 oven 109% qj ; = 3 3 2.000.000 103 2 25.000.000 120 8 2 a 2 20000000 1 100 75000000 re,o00,000 vo 18 “4 46 46 a 48 OVER THE LAST 5 YEARS, FACTSET HAS DELIVERED STRONG GROWTH TOITS INVESTORS 28, 2013
Slide 59: Business Outlook — Fiscal 2018
Business Outlook — Fiscal 2018* Fiscal 2018 Updated Guidance Organic ASV Growth Rate 4.9% -6.5% No change e@ | GAAP Revenues $1.34B - $1.36B No change @ | GAAP Operating Margin! 28.5% - 30.0% 275% -290% @ | Adjusted Operating Margin | 31.0% -32.5% No change @ | Effective Tax Rate? 21.0% - 22.5% 18.0
Slide 60: On Track to Achieve Annual Guidance
On Track to Achieve Annual Guidance Fiscal First Half 2018 Fiscal Second Half 2018 | Mid-point of Annual Actuals Required Results” Guidance Organic ASV Growth $27 million $47 million $75 million Adjusted Operating Margin 31.6% 31.7% 31.7% Adjusted Diluted EPS $4.15 $4.30 $8.45 Toe ove “equrer ests r
Slide 61: FactSet Workflow Solutions
FactSet Workflow Solutions ASV BREAKOUT AS OF AUGUST 31, 2017 Research + PMT Growth Rate*: 1.0% Analytics Growth Rate*: = $1.32B TOTAL ASV & PUT: 46% cTs Growth Rate*: Wealth = 20.6% Growth Rate*: 7.9% ‘e " pe ee ae “it a om FACTSET ) SEE THE ADVANTAGE
Slide 62: Medium Term Goals
Medium Term Goals* ORGANIC ASV MID-SINGLE DIGIT GROWTH SEE THE ADVANTAGE ADJUSTED OPERATING MARGIN 100 BASIS POINTS PER YEAR, OVER THE NEXT TWO YEARS
Slide 63: Maintaining a Disciplined Capital Allocation Framework
Maintaining a Disciplined Capital Allocation Framework W ACQUISITIONS DIVIDENDS + Investment for growth + Drive incremental growth + 12% increase in annual + Consistent share + Investment in operational + Enhance content and coocend i May 20 scum Ce MUST infrastructure technology + 13% 5-year CAGR i
Slide 64: FactSet a Great Investment
FactSet a Great Investment AWARD WINNING SOLUTIONS STRONG COMPETITIVE POSITIONING oy 9948 Cte _ pi) jit: SEE THE ADVANTAGE
Slide 65: Q+A
Slide 66: FactSet
FACTSET ) SEE THE ADVANTAGE
Slide 67: Investor Day 2018
INVESTOR DAY | 2018 SEE THE ADVANTAGE ) F/\CTSET.
Slide 68: Appendix
SEE THE ADVANTAGE ) F/\CTSET Appendix cont 2018 Faust Reeth Sitens ne Alig recene
Slide 69: ASV Reconciliation
ASV Reconciliation Organic ASV (in milions) As of February 28, 2018 2017 ‘As reported ASV (a) $1,348.8 1,186.9 Acquired ASV (b) (88.1) = Professional senices fees (c) - 65) Currency Impact (d) 64) 14 Organic ASV total $1,257.3 $1,188.8 5.8% (a)sagonng wm oe teclnie quar e217, Faust echoes orsRennl c
Slide 70: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Operating Income, Adjusted Operating Margin, and Adjusted Diluted EPS (in thousands, exceptper share data) Forthe Six Months Ended February 28, eeres Rams Far Vave Asuaret a8 = (Ober Nee oss 235 eee Cpring means is ae ore ‘eyes Operang age ae 30% Ga Na oan sass oy o