Slide 1: Second-Quarter & First-Half 2020 Investor Presentation
SECOND-QUARTER & FIRST-HALF 2020 Investor Presentation July 30, 2020
Slide 2: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures Forward-looking statements in this presentation are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actu
Slide 3: Who We Are
Who We Are LEADING PROVIDER OF FINANCIAL, INSURANCE AND ADVISORY SERVICES TO PRIMARILY SMALL AND MIDSIZED BUSINESSES (SMB) IN THE U.S. A Top Click the link above to view our 2019 Corporate Social Responsibility Report or copy and paste this address into your browser: https://www.cbiz.com/Portals/0/C
Slide 4: Key Financial Highlights
Key Financial Highlights TOTAL 2015 2019 CAGR GROWTH REVENUE (IN MILLIONS) $750.4 $948.4 26.4% 6.0% PRE-TAX INCOME (IN MILLIONS) $57.8 $92.9 60.6% 12.6% PRE-TAX MARGIN 7.7% 9.8% 210 bps GAAP EPS (FROM CONTINUING OPERATIONS) $0.66 $1.27 92.4% 17.8% 3
Slide 5: Revenue Profile
Revenue Profile Benefits and Insurance Services Employee Benefits Consulting Payroll / Human Capital Management Property & Casualty Financial Services Retirement Plan Services Accounting and Tax Government Health Care Consulting 31% Financial Advisory 2019 Transaction Advisory Revenu
Slide 6: Recurring Revenue
Recurring Revenue Recurring Services Project-based work Annual Tax Compliance Group Health Benefits Financial Consulting 30% Valuation Government Health Care Consulting Compensation Studies Property & Casualty Litigation Support Payroll Transaction Advisory Retirement Plan Serv
Slide 7: Client Profile
Client Profile Target Clients SMB 50 to 2,000 $5M to $200M Employees in Revenue NATIONAL RESOURCES – PERSONAL SERVICE Total Business Client Retention 90,000+ 50,000+ 90% Clients Clients Rate 6
Slide 8: National Scale
National Scale 4,800 Team Members Boston Minneapolis New York 100+ Offices Salt Lake City Chicago Cleveland Philadelphia Mid-Atlantic Kansas City Denver St. Louis Phoenix/ Memphis 31 States Los Angeles Tucson San Diego Atlanta Tampa Bay 18 Major Markets South Florida OPPORTUNITY TO EXPAND INTO NEW A
Slide 9: Financial Services
Financial Services Business Advisory Services Accounting Provider Top 10 (1) Nationally 17% Tax 34% Government Health Leading Government Care Consultant 23% Health Care Consulting 26% Business Advisory Accounting Leading Consultant Revenue (in millions) $600.9 $616.6 $540.3 $501.3 $476.4 2015 2016 2
Slide 10: Benefits and Insurance Services
Benefits and Insurance Services Human Capital Individual Services Life Places to Work in Employee Best (1) Insurance 4% Benefits Payroll 15% Consulting 35% Top 20 Broker of U.S. Top 20 (2) Business Property & 20% Casualty 25% Retirement Plan Top 100 (3) Adviser Retirement Plan Services Revenue (in m
Slide 11: Focus on Growth
Focus on Growth REVENUE GROWTH COMPONENTS COMPOUNDED ANNUAL INTERNAL GROWTH RATE SINCE 2015 ORGANIC CROSS-SERVING 6.0% EXTERNAL ACQUISITIONS EARNINGS PER SHARE (from continuing operations) 17.8% 10
Slide 12: Growth by Cross-Serving
Growth by Cross-Serving Estimated First-Year Annualized Revenue (in millions) $40 $34.0 $35.3 $30 $32.4 $33.7 $30.0 $20 $10 $0 2015 2016 2017 2018 2019 Trust Co-location Training Recognition/ Reward 11
Slide 13: Growth by Acquisition
Growth by Acquisition ATTRIBUTES STRATEGY STRUCTURE • Successful local or • Focus on core services • Consideration based on regional company in specific geographic TTM EBITDA • Cultural fit markets • 50%+ paid up front • Strong leadership • Focus on high-growth • Balance paid on multi-year industrie
Slide 14: National Resource / Specialization
Competitive Advantage NATIONAL RESOURCES – PERSONAL SERVICE NATIONAL Strength PROVIDERS National Resource / Specialization CBIZ “We out-local the nationals and out-national the locals” LOCAL / REGIONAL Weakness Strength Proximity and Relationship 13
Slide 15: Our Response to the COVID-19 Pandemic
Our Response to the COVID-19 Pandemic TEAM CLIENTS OPERATIONS • Swiftly & successfully • Assisting clients with their most • Came into 2020 in very strong transitioned 95%+ team urgent needs including applying financial condition members to remote work for PPP loan assistance and • Temporarily drew
Slide 16: COVID-19 Environment
COVID-19 Environment Position of Strength • Started 2020 in strong financial position • Provide essential services • Trusted advisor to clients • No disproportionate geographic, industry or client concentration • 70%+ of services naturally recurring • High client retention rates • Discretionary cost
Slide 17: Financial Overview
Financial Overview CBIZ, Inc. 16
Slide 18: YTD Highlights
YTD Highlights 2020 YTD 2020 YTD ORGANIC TOTAL SEGMENT REVENUE REVENUE GROWTH GROWTH FINANCIAL SERVICES 0.2% 1.0% BENEFITS AND INSURANCE SERVICES -1.4% 3.5% NATIONAL PRACTICES 2.2% 2.2% REVENUE -0.1% 1.8% GAAP EPS (FROM CONTINUING OPERATIONS) $1.05 TAX RATE 25.6% SHARE COUNT 55.5M 17
Slide 19: Revenue
Revenue YTD Revenue (in millions) $1,000 $900 $948.4 $922.0 $800 $855.3 $799.8 $700 $750.4 $600 $500 $505.5 $514.4 $400 $300 $200 $100 $0 2015 2016 2017 2018 2019 2020 YTD 18
Slide 20: Diluted Earnings per Share
Diluted Earnings per Share (from continuing operations) YTD Diluted EPS from continuing operations $1.40 $1.20 $1.27 $1.00 $1.09 $1.05 $0.97 $0.92 $0.80 $0.76 $0.60 $0.66 $0.40 $0.20 $0.00 2015 2016 2017 2018 2019 2020 YTD 19
Slide 21: Adjusted EBITDA
Adjusted EBITDA See Appendix for GAAP Reconciliation Adjusted EBITDA (in millions) YTD $125 $120.6 $100 $109.1 $104.0 $94.8 $92.9 $87.0 $86.5 $75 $50 $25 $0 2015 2016 2017 2018 2019 2020 Adjusted EBITDA Margin 11.6% 11.9% 12.2% 11.8% 12.7% 20
Slide 22: Capital Structure
Capital Structure STRATEGIC SHARE DEBT CAPEX ACQUISITIONS REPURCHASES LEVERAGE Temporarily suspended due to COVID-19 • Focused on high- • Strategic approach • Facility • Strong cash flow from growth opportunities • Neutralize impact of newly improvements operations • Typically complete issued shares
Slide 23: Operating Leverage
Operating Leverage GOAL IS TO IMPROVE PRE-TAX INCOME MARGIN BY 20 TO 50 BPS PER YEAR 10.0% Pre-tax Margin 9.8% 8.0% 8.7% 8.7% 8.4% 7.7% 6.0% 4.0% 2.0% 0.0% 2015 2016 2017 2018 2019 Adjusted G&A Margin(1) 4.3% 4.5% 3.8% 4.3% 4.5% (1) See Appendix for GAAP reconciliation. 22
Slide 24: Financial Goals
Financial Goals 2020 guidance has been suspended due to the uncertainty related to the impact of the COVID-19 pandemic. Long-Term Goals - Beyond 2020 23
Slide 25: Investment Highlights
Investment Highlights OPERATIONAL FINANCIAL RESULTS LEVERAGE STRENGTH • Established national • Strong balance sheet • Proven ability to grow platform • Strong and consistent earnings at a faster rate • Full integration of cash flow than revenue growth acquired businesses • Credit facility provides •
Slide 26: Appendix
Appendix CBIZ, Inc. 25
Slide 27: 2019 Workplace Awards
2019 Workplace Awards 2019 Workplace Awards By the Numbers * 2019 Top Entry Level Employer |2019 Top Intern Employer Best Workplaces in Consulting and Professional Services 2019 America's Best Mid-Size Employers 2019 Workplace Excellence Seal of Approval 2019 Best Places to Work in Insurance 2019 US
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation GAAP RECONCILIATION Income from Continuing Operations to Non-GAAP Financial Measures (1) (In thousands) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2020 2019 2020 2019 Income from continuing operations $ 21,479 $ 16,614 $ 58,341 $ 54,179 Interest expense 2,07
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation GAAP RECONCILIATION Reconciliation of GAAP Income from Continuing Operations to Adjusted EBITDA (1) (In thousands) Year Ended December 31, 2019 2018 2017 2016 2015 Income from continuing operations……………………………….. $ 71,049 $ 61,573 $ 51,032 $ 40,607 $ 35,003 Interest exp
Slide 30: Adjusted G&A Margin Reconciliation
Adjusted G&A Margin Reconciliation GAAP RECONCILIATION Reconciliation of GAAP Corporate G&A Expenses to Corporate G&A Expenses Excluding Deferred Compensation Plan (1) (In thousands) Year Ended December 31, 2019 2018 2017 2016 2015 Corporate G&A expenses…………………………………………..……….….. $ 44,406 $ 39,173 $