Slide 1: 1Q2020 Earnings Presentation
1Q2020 Earnings Presentation May 5, 2020 © 2020 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
1Q2020 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
1Q2020 Earnings Presentation Business and Financial Highlights • Normalizing for the $4 million revenue impact of the roof measurement injunction, organic constant currency (OCC) revenue grew 5.8% and OCC adjusted EBITDA grew 9.0%. • All three verticals delivered top-line growth, led by Insurance. •
Slide 4: Financial Summary
1Q2020 Earnings Presentation Financial Summary Three months ended March 31 Subscription/Long-Term Revenue 2020 2019 % change Revenue $690M $625M 10.4% 82% 81% Net income 172M 134M 27.8% 1Q2020 1Q2019 Adjusted net income 194M 171M 13.6% Adjusted EBITDA 318M 292M 9.0% International Revenue Adjusted EB
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
1Q2020 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins OCC Revenue OCC Adjusted EBITDA Total Adjusted EBITDA Margin 9.0% 7.7% 7.2% 7.2% 7.4% 6.7% 6.8% 7.6% 6.1% 6.7% 5.4% 5.2% 5.0% 5.4% 47.4% 47.2% 47.0% 47.1% 46.7% 46.6% 46.1% FY18 FY19 1Q19 2Q19 3Q19 4Q19 1Q20 FY
Slide 6: Segments
Segments © 2019 2020 Verisk Analytics, Inc. All rights reserved. 2017 6
Slide 7: Insurance
1Q2020 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
1Q2020 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights • UW & rating growth accelerated in the quarter to 8.4% and was broad-based % change across both personal and commercial lines. 1Q20 1Q19 Reported OCC – Industry-standard programs and catastrophe modeling sol
Slide 9: Energy and Specialized Markets
1Q2020 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
1Q2020 Earnings Presentation Energy and Specialized Markets Quarterly Performance Financials Business Highlights % change • OCC revenue increased 2.6%, driven by growth in core research and environmental health and safety service solutions. 1Q20 1Q19 Reported OCC – Our breakout solutions, including
Slide 11: Financial Services
1Q2020 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
1Q2020 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights % change • OCC revenue grew 3.0%, resulting primarily from increases in management information and regulatory reporting and fraud and credit risk management, 1Q20 1Q19 Reported OCC offset in part by
Slide 13: Cash Flow and Capital
Cash Flow and Capital © 2019 2020 Verisk Analytics, Inc. All rights reserved. 2017 13
Slide 14: Cash Flow Utilization
1Q2020 Earnings Presentation Cash Flow Utilization (in $ millions) 2017 2018 2019 1Q19 1Q20 Net cash provided by operating activities $744M $934M $956M $366M $363M Capital expenditures (184)M (231)M (217)M (45)M (53)M Free cash flow (FCF) 560M 703M 740M 321M 310M Acquisitions, net of cash acquired (
Slide 15: Capital Structure
1Q2020 Earnings Presentation Capital Structure Revolver due as of 3/31/2020 for renewal (in $ millions) August 2024 Bonds $2,650 Revolver drawn 440 Total debt1 $3,090 Debt/EBITDA2 2.65x 555 Covenant level3 3.50x Investment grade ratings S&P: BBB (Jan-2019: ↑ from BBB-) 900 Moody’s: Baa2 (May-2018: ↑
Slide 16: Capital Management Philosophy
1Q2020 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 17: Appendix: Supplemental Slides and/or Non-GAAP Reconciliations
Appendix: Supplemental Slides and/or Non-GAAP Reconciliations © 2019 2020 Verisk Analytics, Inc. All rights reserved. 2017 17
Slide 18: Non-GAAP Reconciliations
1Q2020 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
1Q2020 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 1Q20 1Q19 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $489.4M $160.1M $40.3M $453.6M $128.4M $43.0M Revenues from acquisitions
Slide 20: Non-GAAP Reconciliations
1Q2020 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 2019 2018 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $1,865.2M $563.9M $178.0M $1,714.8M $504.4M $175.9M Revenues from acquisi
Slide 21: Non-GAAP Reconciliations
1Q2020 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS 2019 2018 1Q20 1Q19 Net income $449.9M $598.7M $171.7M $134.4M plus: Amortization of intangible assets 138.0M 130.8M 41.0M 33.2M less: Tax effe
Slide 22: Non-GAAP Reconciliations
1Q2020 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: © 2020 Verisk Analytics, Inc. All rights reserved.
© 2020 Verisk Analytics, Inc. All rights reserved. 23