Slide 1: 1Q2018 Earnings Presentation
1Q2018 Earnings Presentation May 01, 2018 © 2018 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures
1Q2018 Earnings Presentation Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures Forward-Looking Statements This release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainti
Slide 3: Business Highlights
1Q2018 Earnings Presentation Business Highlights • Strong organic revenue growth from new customers, cross-sell and new solutions • High level of engagement with leading customers • Transition of Financial Services leadership to Lisa Hannan, an 8-year Argus veteran • Sequel and PowerAdvocate integra
Slide 4: Financial Summary
1Q2018 Earnings Presentation Financial Summary (in $ millions, except per Three months ended March 31st Highlights share amounts) 2018 2017 % change • Revenue growth driven by organic Insurance growth, recent acquisitions and favorable FX environment Revenue $ 581 $ 503 16% • EBITDA growth from orga
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
1Q2018 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins Reported Organic Revenue Adjusted EBITDA margin margin 8.2% 52% 52% 7.4% 7.4% 7.0% 7.0% 6.3% 50% 50% 5.8% 5.3% 50% 50% 50% 50% 4.8% 5.2% 5.0% 49% 49% 49% 49% 48% 4.1% 2.5% 46% 1.3% 2016 2017 1Q17 2Q17 3Q17 4Q17
Slide 6: Segments
Segments © 2018 2017 Verisk Analytics, Inc. All rights reserved. 6
Slide 7: Segment Mapping
1Q2018 Earnings Presentation Segment Mapping Previous Segmentation New Segmentation Decision Risk Energy Financial Key Solutions Insurance Analytics Assessment & Spec. Mrkts. Services ISO Solutions A F Underwriting C B F Claims Analytics C G AIR Worldwide C F Xactware C G Geomni C G Sequel C F AER D
Slide 8: Segment Growth Summary
1Q2018 Earnings Presentation Segment Growth Summary Three months ended March 31st Energy & Financial Insurance Verisk Spec. Mrkts. Services Revenue growth: Reported 12.5% 18.1% 46.2% 15.6% Organic 8.8 8.4 2.1 8.3 Organic constant currency 8.7 3.1 1.5 7.0 EBITDA growth: Reported 9.9% 6.0% 9.8% 9.4% O
Slide 9: Segment Trends
1Q2018 Earnings Presentation Segment Trends Organic Constant Currency Revenue Growth Organic Constant Currency Adjusted EBITDA Growth 10.2% 16.0% 8.7% 7.2% 9.7% 6.5% 7.8% 4.1% 4.5% 5.0% 5.1% 3.1% 2.7% 1.4% 1.5% 1.2% flat -0.2% -1.7% -2.1% -6.2% -5.9% -2.9% -8.0% 2016 2017 1Q17 1Q18 2016 2017 1Q17 1Q
Slide 10: Insurance Overview
1Q2018 Earnings Presentation Insurance Overview Underwriting & Rating Solutions Claims Solutions Industry-standard insurance programs Integrated analytics solutions for improving ISO Property-specific underwriting & rating info Claims claims outcomes at every step of the Underwriting solutions Analy
Slide 11: Insurance Quarterly Performance
1Q2018 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights % change • Underwriting & rating organic growth across extreme event (in $ millions) 1Q18 1Q17 Reported Organic Organic modeling, personal lines underwriting and industry standard constant FX programs UW & Ra
Slide 12: Energy & Specialized Markets Overview
1Q2018 Earnings Presentation Energy & Specialized Markets Overview Solutions Research, consulting and data analytics for the Improving our understanding of global global energy, chemicals, and metals and mining environment to enable better decision making industries in response to weather and climat
Slide 13: Energy & Specialized Markets Performance
1Q2018 Earnings Presentation Energy & Specialized Markets Performance Financials Business Highlights % change • Organic revenue growth driven by consulting and breakout (in $ millions) 1Q18 1Q17 Reported Organic Organic initiatives as the energy end market continues to stabilize constant FX Revenue
Slide 14: Financial Services Overview
1Q2018 Earnings Presentation Financial Services Overview Solutions Solutions for financial institutions including Systems and services to help retailers ARGUS competitive benchmarking, decisioning Verisk prevent loss, manage risk, and ensure algorithms, customized analytic services and Retail compli
Slide 15: Financial Services Performance
1Q2018 Earnings Presentation Financial Services Performance Financials Business Highlights % change • Continued progress in recovering from 2017 contract (in $ millions) 1Q18 1Q17 Reported Organic Organic transitions; momentum picked up in the later part of the constant FX quarter for Analytic Servi
Slide 16: Cash Flow and Capital
Cash Flow and Capital © 2018 2017 Verisk Analytics, Inc. All rights reserved. 16
Slide 17: Cash Flow Utilization
1Q2018 Earnings Presentation Cash Flow Utilization 2017 2018 (in $ millions) 2015 2016 (1) 2017 1Q-YTD 1Q-YTD Net cash provided by operating activities $ 591M $ 656M $ 744M $318M $ 327M Capital expenditures (139) (146) (184) (31) (43) Free cash flow (FCF) 452 510 560 289 284 Acquisitions, net of cas
Slide 18: Capital Structure
1Q2018 Earnings Presentation Capital Structure as of 03/31/2018 Investment Grade Ratings (in $ millions) S&P: BBB- Bonds $2,300 Moody’s: Baa3 Revolver Drawn 480 Fitch: BBB+ Total Debt $2,780 1,020 Debt/EBITDA (1) 2.5x Covenant level (2) 3.5x 480 Revolver due May 2022 900 450 350 350 250 2015 2016 20
Slide 19: Capital Management Philosophy
1Q2018 Earnings Presentation Capital Management Philosophy Focused on Value Creation • Understand and optimize operating capital generation • Identify internal and external investment opportunities • Compare estimated returns on invested capital relative to risk- weighted WACC • Compare operating ca
Slide 20: Appendix: Supplemental Slides and Non-GAAP Reconciliations
Appendix: Supplemental Slides and Non-GAAP Reconciliations © 2018 2017 Verisk Analytics, Inc. All rights reserved. 20
Slide 21: Non-GAAP Reconciliations
1Q2018 Earnings Presentation Non-GAAP Reconciliations Constant Currency Growth Our operating results reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which we transact change in value over time compared to the U.S. doll
Slide 22: Non-GAAP Reconciliations
1Q2018 Earnings Presentation Non-GAAP Reconciliations Segment Results Summary and EBITDA Reconciliation (in $ millions) 1Q18 1Q17 Change Organic Insurance revenues $398.5 M $366.3 M 8.8 % Organic Energy & Specialized Markets revenues 115.2 106.3 8.4 Organic Financial Services revenues 30.1 29.4 2.1
Slide 23: Non-GAAP Reconciliations
1Q2018 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income and EPS (in $ millions expect EPS, shares in millions) 1Q18 1Q17 Change Net income $133.0 M $108.8 M 22.2 % plus: Amortization of intangible assets 33.2 22.3 less: tax effect on amortization of intangible assets (6.9) (5.8) Ad
Slide 24: Non-GAAP Reconciliations
1Q2018 Earnings Presentation Non-GAAP Reconciliations Adjusted EBITDA (in $ millions) 2017 2016 2015 Income from continuing operations $555.1 M $451.5 M $487.5 M Interest expense 119.4 120.0 121.4 Provision for income taxes 135.9 202.2 196.6 Depreciation and amortization of fixed assets and intangib
Slide 25: © 2018 Verisk Analytics, Inc. All rights reserved.
© 2018 Verisk Analytics, Inc. All rights reserved. 25