Slide 1: 4Q2020 Earnings Presentation
4Q2020 Earnings Presentation February 23, 2021 © 2021 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
4Q2020 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: 4Q2020 Business and Financial Highlights
4Q2020 Earnings Presentation 4Q2020 Business and Financial Highlights • Organic constant currency (OCC) revenue grew 3.5%, led by solid growth in the insurance segment. • In the 85% of our consolidated revenues that are predominantly subscription or subject to long-term contracts where we have not i
Slide 4: Financial Summary
4Q2020 Earnings Presentation Financial Summary Three months ended December 31 Subscription/Long-Term Revenue 2020 2019 % change Revenue $713M $677M 5.4% 82% 82% Net income 176M 132M 33.3% 4Q2020 4Q2019 Adjusted net income 209M 188M 10.8% Adjusted EBITDA 344M 319M 7.9% International Revenue Adjusted
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
4Q2020 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins 4Q Financial Review OCC Revenue OCC Adjusted EBITDA Total Adjusted EBITDA Margin 14.8% 12.4% 52.1% 51.3% 9.8% 9.0% 49.4% 7.2% 7.4% 6.7% 48.2% 5.4% 5.0% 4.9% 47.1% 47.0% 3.6% 3.5% 46.1% 3.3% 1.1% FY19 FY20 4Q19
Slide 6: Segments
Segments © 2021 Verisk Analytics, Inc. All rights reserved. 6
Slide 7: Insurance
4Q2020 Earnings Presentation Insurance Industry-leading data analytics and insights Underwriting & Rating Solutions Claims Solutions Industry-standard insurance programs, property-specific underwriting & rating Integrated analytics solutions for improving information, and underwriting solutions clai
Slide 8: Insurance Quarterly Performance
4Q2020 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights • UW & rating grew 6.8% on an OCC basis, and was broad-based across both % change personal and commercial lines. 4Q20 4Q19 Reported OCC – Industry-standard programs and catastrophe modeling solutions delivere
Slide 9: Energy and Specialized Markets
4Q2020 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 Supporting compliance with global Research & Analytics and Advisory Services enviro
Slide 10: Energy and Specialized Markets Quarterly Performance
4Q2020 Earnings Presentation Energy and Specialized Markets Quarterly Performance Financials Business Highlights • OCC revenue decreased 3.9%, due to declines in consulting and implementation % change projects across the energy segment. 4Q20 4Q19 Reported OCC • Subscription revenues in core research
Slide 11: Financial Services
4Q2020 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
4Q2020 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights % change • OCC revenue declined 13%, reflecting the impact of certain contract transitions, lower levels of project spending from our bank customers stemming from 4Q20 4Q19 Reported OCC COVID-19 and
Slide 13: Cash Flow and Capital
Cash Flow and Capital © 2021 Verisk Analytics, Inc. All rights reserved. 13
Slide 14: Cash Flow Utilization
4Q2020 Earnings Presentation Cash Flow Utilization (in $ millions) 2018 2019 2020 4Q19 4Q20 Net cash provided by operating activities $934M $956M $1,068M $176M $249M Capital expenditures (231)M (217)M (247)M (64)M (72)M Free cash flow (FCF) 703M 740M 821M 112M 177M Acquisitions (net of cash acquired
Slide 15: Capital Structure
4Q2020 Earnings Presentation Capital Structure Revolver due as of for renewal (in $ millions) Dec-2020 August 2024 Bonds $3,150 Revolver Drawn $50 Total Debt 1 $3,200 Debt/EBITDA 2 2.32x Covenant level 3 3.50x 945 900 Investment Grade Ratings 600 S&P BBB 500 450 Moody’s Baa2 350 350 Fitch BBB+ 50 20
Slide 16: Capital Management Philosophy
4Q2020 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
Appendix: Supplemental Slides and/or Non-GAAP Reconciliations © 2021 Verisk Analytics, Inc. All rights reserved. 17
Slide 18: Non-GAAP Reconciliations
4Q2020 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
4Q2020 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 4Q20 4Q19 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $511.9M $163.3M $38.1M $471.6M $157.8M $47.4M Revenues from acquisitions
Slide 20: Non-GAAP Reconciliations
4Q2020 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and FY 2020 FY 2019 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $1,986.3M $641.6M $156.7M $1,865.2M $563.9M $178.0M Revenues from a
Slide 21: Non-GAAP Reconciliations
4Q2020 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS FY2020 FY2019 4Q20 4Q19 Net income $712.7M $449.9M $176.2M $132.2M plus: Amortization of intangibles 165.9M 138.0M 42.3M 37.9M less: Income tax
Slide 22: Non-GAAP Reconciliations
4Q2020 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: © 2021 Verisk Analytics, Inc. All rights reserved.
© 2021 Verisk Analytics, Inc. All rights reserved. 23