Clarivate Plc · NYSE:CLVT
Clarivate — Investor Presentation (November 2022)
31 slides from Clarivate's investor presentation, Nov 15, 2022
Slide 1: Investor Presentation November 15, 2022
Investor Presentation November 15 , 202 2
Slide 2: Forward-Looking Statements
Forward - Looking Statements This communication contains “forward - looking statements” as defined in the Private Securities Litigation Reform Act of 1995 . These statements, which express management’s current views concerning future business, events, trends, contingencies, financial performance, or
Slide 3: Q3 2022 Business Highlights
3 Q3 2022 Business Highlights FINANCIAL RESULTS KEY HIGHLIGHTS adj. FCF adj. EBITDA revenues adj. diluted EPS $636 million $272 million $194M from prior year 1.2% organic growth $82M from prior year 42.7% margin 1 3 4 5 6 >4% organic growth in subscription revenue offset by softness in LS&H transact
Slide 4: Completed Leadership Transition
Completed Leadership Transition 4 Our team coming together to serve our customers and create value for our shareholders Seoul, South Korea Penang, Malaysia Bangalore, India Boston, USA Chandler, USA London, UK Key Observations Highly talented team Exceptional colleagues across a diverse range of dis
Slide 5: Managed Portfolio via Divestiture of MarkMonitor
Managed Portfolio via Divestiture of MarkMonitor 5 Transaction closed on October 31 st and proceeds used to repay portion of term loans PRODUCTS SCIENCE SOLD OUTSIDE OF LS&HC STRATEGIC RATIONALE • Suboptimally aligned with our core competencies • Enables improved focus on our core IP business • Empo
Slide 6: Modified Segment Reporting
Modified Segment Reporting 6 Aligned segments to drive performance across the enterprise and position to unlock value Key Offerings Academia & Government Segments 1 ~ 48% Regional Presence 1 ProQuest One Ρ Academic ProQuest Ebook Central Ρ Primo Ρ Web of Science Ρ Alma Ρ EndNote Ρ Cortellis Ρ HDS Me
Slide 7: Assessed Growth Potential
Assessed Growth Potential 7 Significant opportunity to expand organic growth across all three segments … Segments 1 Baseline Growth 2 Market Growth 3 Growth Opportunity ~2% Academia & Government ~4% ~2% ~$1.3B ~$2.6B ~48% ~6% Life Sciences & Healthcare ~10% ~4% ~$0.4B ~3% Intellectual Property ~6% ~
Slide 8: Refined One Clarivate Strategy
Refined One Clarivate Strategy 8 … by expanding One Clarivate beyond go - to - market to catalyze product and service innovation Foundational values Best - in - class experience drives customer delight at every touchpoint Stakeholder focus delivering exceptional outcomes for our environment, colleag
Slide 9: Prioritized Major LS&H Innovations
Prioritized 2 Major LS&H Innovations 9 Allocating capital to drive product innovation in highest growth segment Real World Data Platform Pharmacovigilance ^ Capitalize on market need for broader and connected insights to fuel R&D productivity and improved patient outcomes Improving accessibility of
Slide 10: FY 2022 Updated Outlook
▪ Mid - point of revenue range assumes Q4 organic growth rate is flat and the USD strengthens sequentially an additional 5% ▪ $100m revenue decline from prior guidance contemplates MarkMonitor sale, which closed on Oct 31st of ~$(15)m, translational Fx impact of strong USD of ~$(45)m, and growth sho
Slide 11: Segment Financial Trends
$- $100 $200 $300 $400 $500 $600 $700 $800 Q1 '21A Q2 '21A Q3 '21A Q4 '21A Q1 '22A Q2 '22A Q3 '22A Q4 '22F A&G Revenue LS&H Revenue IP Revenue ▪ Improved discipline around late renewals drove higher organic growth in Q1 ’21 (and FY '21) for A&G segment, which suppressed Q1 '22 (and YTD '22) organic
Slide 12: Capital Structure
Capital Structure 12 Continue to strengthen balance sheet and mitigate interest rate risk See the Appendix for a reconciliation of GAAP to Non - GAAP measures . 1 Includes ~$525m of adjusted free cash flow, ~$265m proceeds from sale of MarkMonitor and ~$110m of cash on hand. 2 Debt maturity based on
Slide 13: Investment Highlights
13 Investment Highlights Mission critical products Global and diverse customer base ~80% recurring revenue >90% retention rates >40% profit margin ~50% cash flow conversion Information services compounder poised to accelerate organic growth and financial returns © 2022 Clarivate Plc. All rights rese
Slide 14: Appendix
(S Clarivate” APPENDIX
Slide 15: Non-GAAP financial measures
This presentation contains financial measures which have not been calculated in accordance with generally accepted accounting principles in the United States of America (“ US GAAP “) , including Organic/Inorganic Revenues, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Dilute
Slide 16: Adjusted EBITDA
Adjusted EBITDA The use of Adjusted EBITDA instead of US GAAP has limitations as an analytical tool, and you should not consider Adjusted EBI TDA in isolation, or as a substitute for analysis of the Company’s results of operations and operating cash flows as reported under US GAAP. For example, Adju
Slide 17: Adjusted Net Income and Adjusted Diluted EPS
Adjusted Net Income and Adjusted Diluted EPS We use Adjusted Net Income and Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS") in our analysis of the financial performance of the Company . We believe Adjusted Net Income and Adjusted Diluted EPS are meaningful measures of the performance of
Slide 18: Free Cash Flow and Adjusted Free Cash Flow
Free Cash Flow and Adjusted Free Cash Flow We use free cash flow and adjusted free cash flow in our operational and financial decision - making and believe free cash flow and adjusted free cash flow is useful to investors because similar measures are frequently used by securities analysts, investors
Slide 19: Reconciliation of Financial Measures (QTD)
Reconciliation of Non - GAAP Financial Measures (QTD) 1 Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of ASU No . 2021 - 08 , Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . In the fourth quarter of 202
Slide 20: Reconciliation of Financial Measures (YTD)
Reconciliation of Non - GAAP Financial Measures ( Y TD) 1 Certain prior period reported amounts have been reclassified to conform to current period presentation . 2 Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of ASU No . 2021 - 08 , Account
Slide 21: Descriptions: Adjusted EBITDA adjustments
Descriptions Adjusted EBITDA adjustments 1. Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of ASU No . 2021 - 08 , Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . In the fourth quarter of 2021 , Clarivat
Slide 22: Descriptions: Adjusted EBITDA adjustments
Descriptions Adjusted EBITDA adjustments 1. Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of FASB ASU No . 2021 - 08 , Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . In the fourth quarter of 2021 , Cla
Slide 23: Descriptions: Adjusted EBITDA and Standalone Adjusted EBITDA Adjustments
Descriptions Adjusted EBITDA and Standalone Adjusted EBITDA Adjustments 1. Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of ASU No . 2021 - 08 , Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . In the fo
Slide 24: Descriptions: Adjusted Net Income and Adjusted Diluted EPS adjustments
Descriptions Adjusted Net Income and Adjusted Diluted EPS adjustments 1. Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of ASU No . 2021 - 08 , Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . In the four
Slide 25: Descriptions: Adjusted Net Income and Adjusted Diluted EPS adjustments
Descriptions Adjusted Net Income and Adjusted Diluted EPS adjustments 1. Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of ASU No . 2021 - 08 , Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . In the four
Slide 26: Descriptions: Adjusted Net Income and Adjusted Diluted EPS adjustments
Descriptions Adjusted Net Income and Adjusted Diluted EPS adjustments 1. Reflects the deferred revenues adjustment made as a result of purchase accounting prior to the adoption of FASB ASU No . 2021 - 08 , Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . In the
Slide 27: Descriptions: Free Cash Flow and Adjusted Free Cash Flow Adjustments
Descriptions Free Cash Flow and Adjusted Free Cash Flow Adjustments 1. Includes cash funded by a trust related to CPA Global Equity Plan payout upon vesting . 2. Reflects cash payments for costs primarily related to restructuring and lease - exit activities associated with the One Clarivate, ProQues
Slide 28: Descriptions: Free Cash Flow and Adjusted Free Cash Flow Adjustments
Descriptions Free Cash Flow and Adjusted Free Cash Flow Adjustments 1. Reflects cash payments for costs primarily related to restructuring and lease - exit activities associated with the acquisition of DRG, CPA Global and ProQuest, as well as the One Clarivate program . This includes cash paid for c
Slide 29: Revenue variance and 2022 outlook reconciliation
Variance Increase/(Decrease) Percentage of Factors Increase/(Decrease) Year Ending December 31, Total Variance (Dollars) Total Variance (Percentage) Acquisitions Disposal FX Impact Organic (in millions) 2022 Outlook mid - point 2021 Revenues, net $ 2, 63 0.0 $ 1,876.9 $ 75 3.1 40 . 1 % 4 4 . 8 % (0.
Slide 30: Descriptions: Adjusted Diluted EPS Adjustments
Descriptions Adjusted Diluted EPS Adjustments 1. Dividends on our mandatory convertible preferred shares (“MCPS”) are payable quarterly at an annual rate of 5 . 25 % of the liquidation preference of $ 100 per share . For the purposes of calculating net loss attributable to Clarivate, we have exclude
Slide 31: FY2022 Outlook Free Cash Flow reconciliation
Year Ending December 31, 2022 (Forecasted) (in millions) Low High Net cash provided by operating activities $ 460 . 0 $ 510 . 0 Capital expenditures ( 205 .0) ( 205 .0 ) Free Cash Flow $ 255 . 0 $ 305 . 0 Cash paid for restructuring costs (1) 55.0 55.0 Cash paid for CPA Global equity plan (2) 1 56 .