Crawford & Company · NYSE:CRD.A
Crawford & — Investor Presentation (January 2019)
47 slides from Crawford &'s investor presentation, Jan 15, 2019
Slide 1: Crawford & Company Investor Presentation January 2019
Crawford & Company Investor Presentation January 2019 ® Exhibit 99.1
Slide 2: Forward-Looking Statements and Additional Information
Forward-Looking Statements and Additional Information Forward-Looking Statements This presentation contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative a
Slide 3: Crawford & Company
Crawford & Company Crawford Claims Solutions (P&C adjusting solutions) Crawford TPA solutions (Broadspire) Crawford Specialty Solutions (Global Technical Services & Contractor Connection) The world’s largest publicly listed independent provider of global claims management solutions 1.7 Million Claim
Slide 4: Mission and Vision
Crawford & Company loss resolution for carriers, brokers and corporates Our Mission Restoring and enhancing lives, businesses and communities. Our Vision To be the leading provider and most trusted source for expert assistance, serving those who insure and self-insure the risks of businesses and com
Slide 5: Comprehensive, intelligent solutions for customers
We bring together thoughtful experts from around the world to offer comprehensive, intelligent solutions to our customers Loss Adjusting Third Party Administration Managed Repair Medical Management On-Demand Services Catastrophe Response
Slide 6: Value Proposition and Value Delivery System
Crawford & Company Value Proposition and Value Delivery System Customer-focused solutions driven by data and executed by experts globally to mitigate risk for carriers, brokers and corporates Value Proposition High-performing, caring and capable employees globally Flexible workforce with vast experi
Slide 7: End-to-End Solutions
End-to-End Solutions Multi-channel FNOL Pre & Post Loss Inspections Liability, Auto, WC & Disability Claims Property Claims Desk Adjusting CAT, Property & Auto Field Adjusting Business Interruption & Forensic Accounting Managed Repair ANALYTICS & REPORTING
Slide 8: Scope and Scale of Operations
Scope and Scale of Operations Comprehensive experience across the spectrum of the claims world1 Crawford Claims Solutions P&C Adjusting Solutions 1.2 million P&C claims managed 70 Countries with physical location 50,000 Field Resources Global Technical Services Large or Complex Claims 400+ Global te
Slide 9: Crawford—Attractive Business Model
Crawford—Attractive Business Model Experienced Management Team Aligned with Shareholders Fee Per Service Model Recurring Revenues Focus on Cash Flow Generation Technology Enabled BPO Platform Blue Chip Client Base Solid Balance Sheet Healthy Dividend Yield 77 Years Since the Company’s Founding Celeb
Slide 10: Investment Thesis: 5% revenue growth and 15% earnings growth
4 Management’s primary goal is to translate innovation and investment spending into sustained 5% revenue growth and 15% earnings growth, annually Deliver 5% Revenue and 15% Earnings Growth, Annually Goal: Deliver Sustained Revenue and Earnings Growth 5 Strong Balance Sheet & Cash Flow Characteristic
Slide 11: Experienced Executive Management Team
Experienced Executive Management Team 1 Name Background Experience Harsha V. Agadi President and Chief Executive Officer Leadership positions at both public and private companies, including several Fortune 500 companies Member of the Crawford Board of Directors since 2010 30+ Years Rohit Verma Chief
Slide 12: Investing to Accelerate Revenue and Earnings Growth
Investing to Accelerate Revenue and Earnings Growth 2018 was a year of elevated strategic investments to drive growth, focused on: Market share driven by sales Recruiting experienced, solutions-based sales people Increased local presence in attractive Tier 1 global markets Continued on-going staff d
Slide 13: Delivering Solutions that Address Client and Industry Challenges
Crawford is Delivering Solutions that Address Client and Industry Challenges Knowledge Insurtech will fast track claims to facilitate virtual claims handling Claims volatility will increase due to extreme weather events Fewer Claims Focus on Speed & Simplicity Disruptive Technology Climate Claims pr
Slide 14: Innovating to Accelerate Growth and Reduce Costs
Innovating to Accelerate Growth, Improve Client Experience and Reduce Costs TruLook Claims triage process leverages self-service app, WeGoLook Lookers and traditional field adjusters to reduce costs and improve cycle times. Industry Solutions Focus on developing a complete range of specialized solut
Slide 15: TruLook
TruLookTM End-to-end handling of self-service, on-demand, and field adjusting needs 3 Client Submits claim via email, phone, or existing ordering platform Desk services Licensed adjuster assesses complexity and assigns to best-fit process YouGoLook (Low complexity) End user collects data via smartph
Slide 16: WeGoLook
WeGoLook 46K ~4.7 ~42.5 36% 100% Lookers Day turnaround Years of age Selection rate Quality Assurance Complete coverage across the nation with rapid delivery and infinite scale 3 Lookers Drone Operators WeGoLook combines technology with an on-demand workforce to gather and validation information any
Slide 17: Managed Repair
Managed Repair Reduce time-in-process and support your customers all the way to restoration Faster service Through rigorous performance management and consistent application of expectations, we improve cycle times and increase customer satisfaction. Accurate estimates Leveraging technology, people p
Slide 18: Tailored Industry Solutions
Focused on developing a complete range of specialized solutions focusing on industry verticals for managing risks specific to the targeted industry’s needs Tailored Industry Solutions Industry Verticals Integrated Solutions Construction Hospitality Transportation Retail Energy Total Property TruLook
Slide 19: Investing in Technology
Investing in Technology Evolving with the demands of the market by constantly innovating new products and services. Integrated the gig economy into the fabric of our value delivery system Created new innovations in touchless claims processing Drone-based inspection capabilities Self-service applicat
Slide 20: Driving Growth
Driving Growth 5% 15% 4 Goal: Deliver 5% revenue growth and 15% earnings growth, annually. By holding indirect costs flat, with a 30% contribution margin, 5% revenue growth drives earnings growth of 15%.
Slide 21: Strong Balance Sheet and Cash Flow Characteristics
Strong Balance Sheet and Cash Flow Characteristics 5 Balance Sheet Conservative balance sheet with Net Debt / TTM EBITDA of 1.3x as of September 30, 2018 Total debt decrease of 5.6% or $12.7 million from the 2017 year-end as the net proceeds of the GCG sale were used to repay outstanding borrowings
Slide 22: Focused on Consistent Shareholder Returns
Focused on Consistent Shareholder Returns Crawford continues to return capital to shareholders in the form of quarterly cash dividends and share repurchases As of September 30, 2018 the Company has repurchased nearly 1.1 million shares of CRD-A and 65,000 shares of CRD-B at an average cost of $8.30
Slide 23: 2018 Guidance
2018 Guidance Crawford & Company reaffirmed its guidance for 2018 on November 5th as follows: YEAR ENDING DECEMBER 31, 2018 Low End High End Consolidated revenues before reimbursements $1.07 $1.12 billion Net income attributable to shareholders of Crawford & Company $31.0 $36.0 million Diluted earni
Slide 24: Positioned For A Return To Growth
Positioned For A Return To Growth Growth: Increasing the velocity of revenue growth through continuous innovation Looking forward, Crawford has four primary objectives for 2019: 1 2 3 4 Technology Readiness: Prioritizing IT investments across the globe – forefront of innovation and disruption People
Slide 25: Appendix A: Global Service Lines
Appendix A: Global Service Lines
Slide 26: Crawford Claims Solutions
Crawford Claims Solutions Traditional field adjusting Catastrophe response Temporary Staffing Crowd sourced field inspections (WeGoLook) Drones Vehicle & heavy equipment inspections Surveying for underwriting Centralized intake/FNOL Global administration (FNOL to final payment) Comprehensive Suite o
Slide 27: Crawford TPA Solutions: Broadspire
Crawford TPA Solutions: Broadspire Workers Compensation Disability and Leave Management Auto/Motor General Liability Product Liability & Recall Medical management Accident & Health Employers liability Affinity/ Warranty TPA with global presence – servicing clients in 22 countries Global account mana
Slide 28: Managed Repair Services and Global Technical Services
Managed Repair Services ( Contractor Connection ) Global Technical Services ( GTS ) Industry’s largest contractor managed repair network – general and specialty contractors Indemnity management averaging 7% estimate accuracy reduction Proven LAE savings and reduced cycle times Proven customer satisf
Slide 29: Appendix B: Third Quarter 2018 Segment Results
Appendix B: Third Quarter 2018 Segment Results
Slide 30: Crawford Claims Solutions Segment Highlights
Crawford Claims Solutions Segment Highlights Revenues of $85.3 million versus $86.3 million Gross profit of $17.3 million versus $15.3 million Operating earnings of $(0.7) million versus $2.0 million Gross profit margin of 20.3% versus 17.8% Operating earnings margin of (0.8)% versus 2.3% Cases rece
Slide 31: Crawford TPA Solutions: Broadspire Segment Highlights
Crawford TPA Solutions: Broadspire Segment Highlights Revenues of $100.3 million versus $97.2 million Gross profit of $26.5 million versus $26.3 million Operating earnings of $8.1 million versus $9.9 million Gross Profit margin of 26.5% versus 27.0% Operating earnings margin of 8.0% versus 10.2% Cas
Slide 32: Crawford Specialty Solutions Segment Highlights
Crawford Specialty Solutions Segment Highlights Revenues of $69.4 million versus $87.0 million Gross profit of $26.3 million versus $30.9 million Operating earnings of $14.9 million versus $16.4 million Gross profit margin of 37.9% versus 35.5% Operating margin of 21.4% versus 18.9% Cases received o
Slide 33: Appendix C: Third Quarter 2018 Consolidated Financial Results
Appendix C: Third Quarter 2018 Consolidated Financial Results
Slide 34: Third Quarter 2018 Financial Summary
Third Quarter 2018 Financial Summary (1) See appendix for non-GAAP explanation and reconciliation of non-GAAP Earnings per Share. Quarter Ended September 30, September 30, ($ in millions, except per share amounts) 2018 2017 % Change Revenues $255.0 $270.6 (6 )% Non-GAAP Revenues excluding GCG busine
Slide 35: Balance Sheet Highlights
Balance Sheet Highlights (1) See appendix for non-GAAP explanation and reconciliation of non-GAAP Earnings per Share. Unaudited ($ in thousands) September 30, 2018 September 30, 2018 December 31, 2017 December 31, 2017 Change Change Cash and cash equivalents $ 53,339 $ 54,011 $ (672 ) Accounts recei
Slide 36: Quarterly Operating And Free Cash Flow
Quarterly Operating And Free Cash Flow Unaudited ($ in thousands) Three Months Three Months Three Months Three Months Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended Ended Ended Ended Ended March 31, March 31, June 30, June 30, September 30, September 30, September 30, Sept
Slide 37: Appendix D: Non-GAAP Financial Information
Appendix D: Non-GAAP Financial Information
Slide 38: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily compara
Slide 39: Appendix: Non-GAAP Financial Information (continued)
Appendix: Non-GAAP Financial Information (continued) Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and
Slide 40: Reconciliation of Non-GAAP Items (continued)
Reconciliation of Non-GAAP Items (continued) * Midpoints of Company's Guidance, updated November 5, 2018 Quarter Ended Quarter Ended Quarter Ended Quarter Ended Full Year Full Year September 30, September 30, September 30, September 30, Guidance Guidance Unaudited ($ in thousands) 2018 2018 2017 201
Slide 41: Reconciliation of Non-GAAP Items (continued)
Reconciliation of Non-GAAP Items (continued) * Midpoints of Company's Guidance, updated November 5, 2018 Quarter Ended Quarter Ended Full Year Full Year September 30, September 30, September 30, September 30, Guidance Guidance Unaudited ($ in thousands) 2018 2018 2017 2017 2018 * 2018 * Net income a
Slide 42: Reconciliation of Non-GAAP Items: Net Debt
Reconciliation of Non-GAAP Items (continued) September 30, September 30, December 31, December 31, Unaudited ($ in thousands) 2018 2018 2017 2017 Net Debt Short-term borrowings $ 32,096 $ 24,641 Current installments of capital leases 167 571 Long-term debt and capital leases, less current installmen
Slide 43: Reconciliation of Non-GAAP Items: Segment Gross Profit
Reconciliation of Non-GAAP Items (continued) Segment Gross Profit
Slide 44: Reconciliation of Non-GAAP Items (continued)
Reconciliation of Non-GAAP Items (continued) Three Months Ended September 30, 2018 Unaudited ($ in thousands) Revenues Revenues Direct Expenses Direct Expenses Gross Profit Gross Profit Indirect Expenses Indirect Expenses Operating Earnings Operating Earnings Crawford Specialty Solutions $ 69,413 $
Slide 45: Reconciliation of Non-GAAP Items (continued)
Reconciliation of Non-GAAP Items (continued) Three Months Ended September 30, 2018 Unaudited ($ in thousands) Revenues Revenues Non-GAAP Operating Earnings Non-GAAP Operating Earnings Pretax Earnings Pretax Earnings Net Income Attributable to Crawford & Company Net Income Attributable to Crawford &
Slide 46: Reconciliation of Non-GAAP Items (continued)
Reconciliation of Non-GAAP Items (continued) Three Months Ended September 30, 2017 Unaudited ($ in thousands) Revenues Revenues Non-GAAP Operating Earnings Non-GAAP Operating Earnings Pretax Earnings Pretax Earnings Net Income Attributable to Crawford & Company Net Income Attributable to Crawford &
Slide 47: Crawford & Company
Crawford & Company ®