Crawford & Company · NYSE:CRD.A
Crawford & — Investor Presentation (December 2013)
31 slides from Crawford &'s investor presentation, Dec 4, 2013
Slide 1: Crawford & Company, New York City, December 4, 2013
Crawford & Company New York City December 4, 2013 Exhibit 99.1
Slide 2: Forward-Looking Statements and Additional Information
FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION Forward-looking statements Revenues Before Reimbursements (“Revenues”) Segment and Consolidated Operating Earnings Earnings Per Share Non-GAAP Financial Information –This presentation contains forward-looking statements, including statements abou
Slide 3: Crawford & Company at a Glance
Crawford & Company at a Glance at market close November 29, 2013 Exchange/Tickers: NYSE: CRDA and CRDB Trailing 52 week High/Low: CRDA: $4.65-$8.48 CRDB: $5.62-$11.30 Market Capitalization : $488.0 million Quarterly Dividend/ Normalized Yield: CRDA: $0.05/quarter or 2.6% yield CRDB: $0.04/quarter or
Slide 4: A Business Services Leader since 1941
EMEA-A/P Americas Broadspire Legal Settlement Administration Serves the U.K., European, Middle Eastern, African and Asia Pacific markets Serves the U.S., Canadian and Latin American markets Serves large national accounts, carriers and self- insured entities Provides administration for class action s
Slide 5: Our Global Strength
$1.2 Billion Revenue Company 700 Locations 70+ Countries 8,500 Employees OUR GLOBAL STRENGTH
Slide 6: Diversified Business and Clients
Diversified Business and Clients 2012 Revenues of Approximately $1.2 Billion • Property and Casualty Services • Global Technical Services • Third Party Administration • Global Markets 28.6% 21.6% 17.1% EMEA/AP Americas • Property and Casualty Services • Catastrophe Management Services • Contractor C
Slide 7: Catalysts/Drivers
Catalysts/Drivers Cyclical Positive Industry Claim Trends: Increased underwriting pressure creates a positive claim trend. Weather/Catastrophe Trends: Catastrophic events worldwide are increasing in severity and frequency. Crawford is uniquely positioned to serve these markets. Healthcare Reform: In
Slide 8: Crawford Provides More Than Claims Services
Crawford Provides More Than Claims Services P&C outsourced claims services provided about $575 million, or 49%, of total Crawford revenue in 2012 • Claims services is a mature business in most geographies • Revenues are driven by claims volume, which is affected by regional economies, economic growt
Slide 9: Crawford's Expertise
Crawford’s Expertise Claims Services: Thai Flooding Catastrophe Response Business Process Outsourcing: Deepwater Horizon Consulting: Medical Management
Slide 10: Catastrophe Response: Thai Flooding
Catastrophe Response: Thai Flooding Top ten historic insurance loss Crawford handled losses in excess of $4 billion Flooding affected an area the size of South Carolina Leveraged global capabilities through deployment of 160 staff including 50 support staff and 35 senior adjusters from other locatio
Slide 11: Global Natural Catastrophe Update
Natural catastrophes worldwide 1980 – Natural catastrophes per year more than doubled over period Crawford is uniquely positioned to respond on a global basis Global Natural Catastrophe Update © 2013 Munich Re Source: Geo Risks Research, NatCatSERVICE – As at January 2013
Slide 12: High-Volume Claims Services: Deepwater Horizon
High-Volume Claims Services: Deepwater Horizon The Garden City Group (GCG) is the recognized leader in legal administration services for class action settlements and other claims administration, bankruptcy cases and legal noticing programs Largest program is the combined GCCF/Deepwater Horizon settl
Slide 13: Garden City Group Ranks First Among Claims Administrators
Garden City Group Ranks First Among Claims Administrators Source: Securities Class Action Services Report, Most Frequent Claims Administrators in SCAS 100, Jan. 2013
Slide 14: Consulting: Medical Management
Consulting: Medical Management Medical costs are currently 60% of workers compensation cost and are estimated to be over 70% by 2016, increasing the importance of effective medical cost containment. Broadspire case managers proactively manage medical treatment in the rehabilitation process, enabling
Slide 15: Financial Review and Operational Focus
Financial Review and Operational Focus
Slide 16: 2012 Business Summary
2012 Business Summary Record revenues of $1.177 billion Record consolidated operating earnings of $110.2 million Record operating cash flow of $92.9 million Including special payment, dividends of $0.20 per CRDA and $0.16 per CRDB
Slide 17: YTD September 2013 Business Summary
YTD September 2013 Business Summary Revenues increased 2% to $878.6 million Consolidated operating earnings increased 5% to $74.7 million Improvement in Broadspire and Americas operating results Net income increased 16% to $40.2 million Diluted earnings per share of $0.74 for CRDA and $0.71 for CRDB
Slide 18: Year To Date 2013 Financials
Year To Date 2013 Financials Crawford & Company Income Statement Highlights Unaudited ($ in thousands, except per share amounts) Nine months ended September 30, % Change Revenues $878,566 $863,736 2% Costs of Services 638,049 625,001 2% Selling, General, and Administrative 174,077 173,967 0% Corpora
Slide 19: Operational Focus
Operational Focus Sustain Operating Performance through Improved Profitability Americas improvement in U.S. Property & Casualty and Canada Continued progress in Broadspire EMEA/AP improvement in the United Kingdom Strengthen the Balance Sheet Manage debt levels and pension obligations Drive operatin
Slide 20: 2013 Guidance
2013 Guidance Consolidated revenues before reimbursements between $1.13 and $1.15 billion Consolidated operating earnings between $95.0 and $99.0 million Consolidated cash provided by operating activities between $50.0 and $55.0 million Consolidated net income attributable to shareholders of Crawfor
Slide 21: Enhanced Return to Shareholders
Enhanced Return to Shareholders Dividends and Buyback: TTM Total Return (12/3/12 to 11/29/13) : After the 2013 third quarter, Crawford declared a regular quarterly dividend of $0.05 on CRDA and $0.04 on CRDB During the first nine months of 2013, Crawford has paid dividends of $0.13 per share on CRDA
Slide 22: Crawford Capital Structure
Crawford Capital Structure Improving Balance Sheet Supports Return to Shareholders Debt reduced by $62 million, or 25% since 2010 through 2012 Pension risk management program driving positive results Material improvement in cash flow from both operations and working capital management Net debt of $9
Slide 23: Crawford Dynamic Investment Policy Glide Path
Liability Hedging 60% Plan Status Frozen Funded Status 82% Asset Allocation 38/62 Road Map Trade Equities for Long Bonds as Funded Status Improves Hedging 60% Hedging 60% Hedging 60% Hedging 66% Hedging 74% Return Seeking 40% Return Seeking 40% Return Seeking 40% Return Seeking 40% Return Seeking 34
Slide 24: Management Alignment with Shareholders
Management Alignment with Shareholders Short-Term Incentive Compensation Plan Matrix: Metric: Weight: Revenues 30% Operating Earnings 25% Operating Margin 25% DSO 20% Stock Ownership Guidelines: Multiple of Officer: Base Salary: President/CEO 3x CFO/EVPs 2x Balanced short and long term system focuse
Slide 25: Capital Structure and Governance
Capital Structure and Governance Class A and B Shares: As of October 31, 2013, there were approximately 29.9 million shares of Class A Common Stock and 24.7 million shares of Class B Common Stock outstanding. The two classes of stock are substantially identical, except with respect to voting rights
Slide 26: Crawford Is Positioned for Strong Returns
Global Footprint World’s largest independent provider of claims management solutions Diverse customer base Global catastrophe response Innovative Technology Platforms Analytics Risk Tech Risk Sciences Group/Dmitri Claims Management System (CMS) Command Center Specialized Resources Legal Settlement A
Slide 27: Appendix
Crawford & Company Appendix
Slide 28: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily compara
Slide 29: Non-GAAP Financial Information
Non-GAAP Financial Information Unaudited ($ in thousands) YTD through September 30, 2013 YTD through September 30, 2012 Revenues Before Reimbursements Total Revenues 1,135,916 $ 1,048,202 $ 1,110,801 $ 1,211,362 $ 1,266,138 $ 946,710 $ 930,608 $ Reimbursements (87,334) (78,334) (80,384) (86,007) (89
Slide 30: Non-GAAP Financial Information, continued
Non-GAAP Financial Information, continued Unaudited ($ in thousands) December 31, Net Debt Short-term borrowings 13,275 $ Current installments of long-term debt and capital leases Long-term debt and capital leases, less current installments 152,293 Total debt 166,406 Less: Cash and cash equivalents
Slide 31: Crawford & Company
Crawford & Company