Slide 1: 2Q2019 Earnings Presentation
2Q2019 Earnings Presentation July 30, 2019 © 2019 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
2Q2019 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
2Q2019 Earnings Presentation Business and Financial Highlights • Organic constant currency (OCC) revenue grew 7.2%, driven by continued Insurance strength and improvements in Financial Services • OCC adjusted EBITDA growth was 5.2%, or 7.3% when normalized for the timing shift related to the expensi
Slide 4: Financial Summary
2Q2019 Earnings Presentation Financial Summary Three months ended June 30 Subscription/Long-term Revenue 2019 2018 % change Revenue $653M $601M 8.5% Adjusted EBITDA 304M 288M 5.7% 80% 80% YTD19 YTD18 Adjusted EBITDA margin 46.6% 47.9% -125 bps Net income 150M 153M -2.0% International Revenue Adjuste
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
2Q2019 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins OCC Revenue OCC Adjusted EBITDA Total Adjusted EBITDA Margin 8.9% 7.4% 6.8% 7.2% 6.9% 6.1% 6.0% 6.7% 5.4% 5.2% 47.9% 5.4% 4.7% 47.2% 47.4% 4.2% 47.1% 46.6% 46.7% 46.6% 1.6% FY18 YTD19 2Q18 3Q18 4Q18 1Q19 2Q19 F
Slide 6: Segments
Segments © 2019 Verisk Analytics, Inc. All rights reserved. 6
Slide 7: Insurance
2Q2019 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 info, claim outcomes and fighting fraud at e
Slide 8: Insurance Quarterly Performance
2Q2019 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights • UW & rating growth was broad-based with strong performance in both % change personal and commercial lines 2Q19 2Q18 Reported OCC – Solid contributions from sales of new innovative solutions, including UW &
Slide 9: Energy and Specialized Markets
2Q2019 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 Improving our understanding of the global Research & Analytics and Advisory Service
Slide 10: Energy and Specialized Markets Quarterly Performance
2Q2019 Earnings Presentation Energy and Specialized Markets Quarterly Performance Financials Business Highlights • OCC revenue growth driven by market and cost intelligence solutions % change and core research revenues 2Q19 2Q18 Reported OCC – Growth in breakouts including Subsurface, Chemicals, and
Slide 11: Financial Services
2Q2019 Earnings Presentation Financial Services Big data, predictive analytics, and insights Portfolio Analytics, Regulatory Data Management, and Marketing Credit Risk Management, Fraud, and Abuse Solutions for financial institutions, including Risk management tools associated with competitive bench
Slide 12: Financial Services Quarterly Performance
2Q2019 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights • OCC revenue growth of 6.1% was driven by strength in portfolio % change management and spend-informed analytics 2Q19 2Q18 Reported OCC • All solutions sets within Financial Services delivered seque
Slide 13: Segment Trends
2Q2019 Earnings Presentation Segment Trends Insurance Energy Financial Organic Constant Currency Revenue Growth Organic Constant Currency Adjusted EBITDA Growth 8.4% 7.8% 9.0% 15.0% 7.2% 7.5% 11.9% 7.0% 10.0% 8.7% 10.7% 6.1% 7.2% 5.0% 4.9% 6.1% 5.0% 5.5% 5.0% 5.8% 5.1% 1.9% 1.6% 3.4% 4.4% 1.5% 3.7%
Slide 14: Cash Flow and Capital
Cash Flow and Capital © 2019 Verisk Analytics, Inc. All rights reserved. 14
Slide 15: Cash Flow Utilization
2Q2019 Earnings Presentation Cash Flow Utilization (in $ millions) 2017 2018 YTD19 2Q18 2Q19 Net cash provided by operating activities $744M $934M $566M $207M $200M Capital expenditures (184)M (231)M (92)M (56)M (47)M Free cash flow (FCF) 560M 703M 474M 151M 153M Acquisitions, net of cash acquired (
Slide 16: Capital Structure
2Q2019 Earnings Presentation Capital Structure as of 6/30/2019 Revolver (in $ millions) due Bonds $2,450 May 2022 Revolver drawn 070 Total debt $2,520 Debt/EBITDA (1) 2.1x Covenant level (2) 3.5x 1,430 Investment grade ratings S&P: BBB (Jan-2019: ↑ from BBB-) Moody’s: Baa2 (May-2018: ↑ from Baa3) Fi
Slide 17: Capital Management Philosophy
2Q2019 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 • Co
Slide 18: Appendix: Supplemental Slides and/or Non-GAAP Reconciliations
Appendix: Supplemental Slides and/or Non-GAAP Reconciliations © 2019 Verisk Analytics, Inc. All rights reserved. 18
Slide 19: Non-GAAP Reconciliations
2Q2019 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 20: Non-GAAP Reconciliations
2Q2019 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period 2Q19 2Q18 Segment Results Summary and Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $468.5M $139.8M $44.3M $429.4M $129.9M $42.0M Revenues from acquisitions
Slide 21: Non-GAAP Reconciliations
2Q2019 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period YTD19 YTD18 Segment Results Summary and Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $919.7M $270.6M $87.3M $842.1M $255.4M $85.0M Revenues from acquisition
Slide 22: Non-GAAP Reconciliations
2Q2019 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS YTD19 YTD18 2Q19 2Q18 Net income $284.8M $286.5M $150.4M $153.5M plus: Amortization of intangible assets 66.9M 65.2M 33.6M 32.0M less: Tax effe
Slide 23: Non-GAAP Reconciliations
2Q2019 Earnings Presentation Non-GAAP Reconciliations Adjusted EBITDA | Historical Full-Year Periods Segment Adjusted EBITDA Reconciliation 2018 2017 2016 Insurance Segment – EBITDA $932.2M $855.8M $779.2M Insurance Segment – Acquisition-related costs (earn-out) 0.8M 0.2M —M Insurance Segment – Gain
Slide 24: © 2019 Verisk Analytics, Inc. All rights reserved.
© 2019 Verisk Analytics, Inc. All rights reserved. 24