Slide 1: 2Q2020 Earnings Presentation
2Q2020 Earnings Presentation 2Q2020 Earnings Presentation August 4, 2020 © 2020 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
2Q2020 Earnings Presentation Forward-Looking Statements, Safe Harbor, and 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, uncertai
Slide 3: Business and Financial Highlights
2Q2020 Earnings Presentation Business and Financial Highlights • Normalizing for the $8 million revenue impact of the roof measurement injunction, organic constant currency (OCC) revenue grew 2.4%. • In the 85% of our consolidated revenues that are predominantly subscription or subject to long-term
Slide 4: Financial Summary
2Q2020 Earnings Presentation Financial Summary Three months ended June 30 Subscription/Long-Term Revenue 2020 2019 % change Revenue $679M $653M 4.0% 84% 80% Net income 179M 150M 19.0% 2Q2020 2Q2019 Adjusted net income 213M 184M 15.8% Adjusted EBITDA 348M 304M 14.5% International Revenue Adjusted EBI
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
2Q2020 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins OCC Revenue OCC Adjusted EBITDA Total Adjusted EBITDA Margin 12.4% 51.3% 9.9% 7.7% 9.0% 7.2% 7.4% 48.7% 6.7% 7.2% 7.6% 47.4% 5.2% 5.0% 47.0% 47.1% 5.4% 46.6% 46.1% 3.0% 1.1% FY19 YTD20 2Q19 3Q19 4Q19 1Q20 2Q20
Slide 6: Segments
2Q2020 Earnings Presentation Segments © 2019 2020 Verisk Analytics, Inc. All rights reserved. 2017 6
Slide 7: Insurance
2Q2020 Earnings Presentation Insurance Industry-leading data analytics and insights Underwriting & Rating Solutions Claims Solutions Industry-standard insurance programs, Integrated analytics solutions for improving property-specific underwriting & rating claim outcomes and fighting fraud at every i
Slide 8: Insurance Quarterly Performance
2Q2020 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights • UW & rating growth was 5.1% on an OCC basis, and was broad-based across % change both personal and commercial lines. 2Q20 2Q19 Reported OCC – Industry-standard programs and catastrophe modeling solutions de
Slide 9: Energy and Specialized Markets
2Q2020 Earnings Presentation Energy and Specialized Markets Unique insight on the world’s energy resources and intelligent compliance solutions Energy Specialized Markets Energy and natural resources solutions across Supports compliance with global environmental Research & Analytics and Advisory Ser
Slide 10: Energy and Specialized Markets Quarterly Performance
2Q2020 Earnings Presentation Energy and Specialized Markets Quarterly Performance Financials Business Highlights • OCC revenue decreased 2.8%, due to declines in consulting and implementation % change projects across the energy segment. 2Q20 2Q19 Reported OCC • Subscription revenues in core research
Slide 11: Financial Services
2Q2020 Earnings Presentation Financial Services Big data, predictive analytics, and insights Argus Portfolio Solutions for financial institutions, including Fraud & Credit Tools for bankruptcy management and debt Management competitive benchmarking, decisioning Risk Management collection, and soluti
Slide 12: Financial Services Quarterly Performance
2Q2020 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights % change • OCC revenue decreased 2.7% owing to declines in project-based retained analytics and spend informed analytics that offset growth in our subscription 2Q20 2Q19 Reported OCC solutions. Reven
Slide 13: Cash Flow and Capital
2Q2020 Earnings Presentation Cash Flow and Capital © 2019 2020 Verisk Analytics, Inc. All rights reserved. 2017 13
Slide 14: Cash Flow Utilization
2Q2020 Earnings Presentation Cash Flow Utilization (in $ millions) 2018 2019 YTD20 2Q19 2Q20 Net cash provided by operating activities $934M $956M $612M $200M $250M Capital expenditures (231)M (217)M (110)M (47)M (57)M Free cash flow (FCF) 703M 740M 503M 153M 193M Acquisitions (net of cash acquired)
Slide 15: Capital Structure
2Q2020 Earnings Presentation Capital Structure as of Revolver due June-2020 for renewal (in $ millions) August 2024 Bonds $3,150 Revolver Drawn -- Total Debt 1 $3,150 Debt/EBITDA 2 2.6x 995 Covenant level 3 3.5x 900 Investment Grade Ratings 600 450 500 S&P BBB 350 350 Moody’s Baa2 2021 2022 2023 202
Slide 16: Capital Management Philosophy
2Q2020 Earnings Presentation Capital Management Philosophy Focused on value creation and improving ROIC • Understand and optimize operating capital generation. • Identify internal and external investment opportunities. • Compare estimated returns on invested capital relative to risk-weighted WACC. •
Slide 17: Appendix: Supplemental Slides and/or Non-GAAP Reconciliations
2Q2020 Earnings Presentation Appendix: Supplemental Slides and/or Non-GAAP Reconciliations © 2019 2020 Verisk Analytics, Inc. All rights reserved. 2017 17
Slide 18: Non-GAAP Reconciliations
2Q2020 Earnings Presentation Non-GAAP Reconciliations Specified Metrics The company has provided certain non-GAAP financial information as supplemental information regarding its operating results. These measures are not in accordance with, or an alternative for, U.S. GAAP and may be different from n
Slide 19: Non-GAAP Reconciliations
2Q2020 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 2Q20 2Q19 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $486.4M $154.4M $38.0M $471.0M $137.3M $44.3M Revenues from acquisitions
Slide 20: Non-GAAP Reconciliations
2Q2020 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and YTD20 YTD19 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $975.8M $314.5M $78.3M $924.5M $265.8M $87.3M Revenues from acquisition
Slide 21: Non-GAAP Reconciliations
2Q2020 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS YTD20 YTD19 2Q20 2Q19 Net income $350.7M $284.8M $179.0M $150.4M plus: Amortization of intangibles 82.0M 66.9M 41.0M 33.6M less: Income tax eff
Slide 22: Non-GAAP Reconciliations
2Q2020 Earnings Presentation Non-GAAP Reconciliations Adjusted EBITDA | Historical Full-Year Periods Segment Adjusted EBITDA Reconciliation 2019 2018 2017 Insurance Segment – EBITDA $823.3M $929.1M $852.7M Insurance Segment – Acquisition-related costs (earn-outs) 32.1M (0.8)M (0.2)M Insurance Segmen
Slide 23: 2Q2020 Earnings Presentation
2Q2020 Earnings Presentation © 2020 Verisk Analytics, Inc. All rights reserved. 23