Clarivate Plc · NYSE:CLVT
Clarivate — Q4 2020 Earnings Presentation
28 slides from Clarivate's earnings presentation, Feb 25, 2021
Slide 1: Q4 and Full Year 2020 Earnings Supplemental Materials
Q4 and Full Year 2020 Earnings Supplemental Materials February 25, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements These materials contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current belie
Slide 3: Strategic Acquisitions + Operational Improvements Drove Growth in 2020
Strategic Acquisitions + Operational Improvements Drove Growth in 2020 Strategic Acquisitions Operational Improvements Financial Highlights Launched 19 new products and implemented numerous product enhancements 29% 31% 50% 90% 3% adjusted organic subscription growth $280M $302M $105M $137M durin
Slide 4: Significant Progress Across Four Strategic Goals in 2020
Significant Progress Across Four Strategic Goals in 2020 Continue to improve colleague Further increase customer engagement score delight score Goal 80+ (benchmark 74) Goal 82+ (best practice 82) Increased engagement Increased customer delight score to 77 from 69 score to 79 from 76 Sustainability P
Slide 5: Sustainability at the Heart of Our Business
Sustainability at the Heart of Our Business Significant progress on initiatives in 2020 Governance Environment • Completed new supplier code of ethics • Launched new environmental metrics reporting system • Implemented supplier ESG screening • Launched global e-waste recycling program • Launched new
Slide 6: Efficiently Managing Cost Structure and Freeing up Resources
Efficiently Managing Cost Structure and Freeing up Resources Approximately $185 million in permanent cost reductions Permanent Completed Total Savings Timing Savings Through 2020 2019 cost savings program $75 million $75 million $73 million $75 million run-rate exiting Q1 2021 COVID related $30 mill
Slide 7: Reaffirmed 2021 Outlook
Reaffirmed 2021 Outlook* ($ in millions, except per share information) Low High Adjusted Revenue $1,780 $1,840 Adjusted EBITDA $785 $825 Adjusted EBITDA margin % 44% 45% Adjusted Diluted EPS(1) $0.73 $0.79 Adjusted Free Cash Flow $450 $500 *See Appendix for reconciliation of GAAP to Non-GAAP measure
Slide 8: Q4 Results
Q4 Results Revenue growth driven by acquisitions including DRG and CPA Global and recovery in transactional revenue, combined with cost savings, drove significant Adjusted EBITDA growth and Margin expansion Reported Revenue Adjusted Revenue(1) Adjusted EBITDA(1) +79% actual f/x +85% actual f/x Adjus
Slide 9: Q4 Financial Highlights
Q4 Financial Highlights Adjusted to Three Months Exclude One-time Ended December 31, $3.5M Deferred Commentary % Revenue ($ in millions except per share data) 2020 2019 Change(2) Organic(2) Adjustment(3) Acquisitions, new business and price increases, partially offset by divested products and a one-
Slide 10: Full Year Results
Full Year Results Revenue growth driven by acquisitions including DRG and CPA Global, new business and pricing, combined with operational improvements, drove significant Adjusted EBITDA growth and Margin expansion Reported Revenue Adjusted Revenue(1) Adjusted EBITDA(1) +29% actual f/x +31% actual f/
Slide 11: Full Year Financial Highlights
Full Year Financial Highlights Twelve Months Ended December 31, % ($ in millions except per share data) 2020 2019 Organic(2)(3) Commentary Change(2) Acquisitions including DRG, CPA Global and Darts-ip, organic growth due to new business and price increases, partially Subscription revenue(1) $868 $80
Slide 12: Selected Balance Sheet and Cash Flow Information
Selected Balance Sheet and Cash Flow Information Strong cash flow will allow for debt reduction to continue to invest in strategic growth opportunities December 31, December 31, ($ in millions) $ Change Commentary on Change 2020 2019 Higher cash flows and proceeds from the sale of ordinary shares in
Slide 13: Results Excluding Divested Techstreet and MarkMonitor Businesses
Results Excluding Divested Techstreet and MarkMonitor Businesses Divestitures excluded from both periods ($ in millions) Q4 ’20 Q4 ’19 YOY % Change Actual F/X Actual F/X Actual F/X Constant F/X Adjusted revenue(1)(2) $465 $227 104% 103% Adjusted subscription revenue(1)(2) $232 $188 23% 21% Adjusted
Slide 14: Annualized Contract Value (ACV)
Annualized Contract Value (ACV)(1) As Reported Adjusted for Acquisitions and Divestitures $907 $907 $794 +14% $817 $823 $786 $712 $720 $727 $696 Q4 '19 Q4 '20 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Organic ACV Growth of 3.4% • Quarters include acquisitions as of the period acquired;
Slide 15: Appendix
(S Clarivate” APPENDIX
Slide 16: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures This presentation contains financial measures which have not been calculated in accordance with GAAP, including Adjusted Revenues and Adjusted EBITDA, because they are a basis upon which our management assesses our performance and we believe they r
Slide 17: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures The use of Adjusted EBITDA instead of GAAP measures has limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results of operations and operating cash flows as
Slide 18: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Adjusted Net Income and Adjusted Diluted EPS We have begun to use Adjusted Net Income and Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS") in our analysis of the financial performance of the Company. We believe Adjusted Net Income and A
Slide 19: Quarterly Financial Summary
Quarterly Financial Summary ($ in millions) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Revenues, net $234.0 $242.3 $243.0 $255.0 $240.6 $273.5 $284.4 $455.6 Deferred revenue adjustment $0.2 $0.1 $0.1 $0.1 $1.9 $3.4 $2.1 $15.7 Adjusted Revenue(1)(2) $234.2 $242.4 $243.1 $255.1 $2
Slide 20: Enterprise Value Build
Diluted Share Count @$29 @$33 @$36 Enterprise Value Build (Forecasted as of and for the year ended December 31, 2021, $ in millions except for per share values) Share Price Ticker Current Share (Live) $ 29.00 $ 33.00 $ 36.00 1 Enterprise Value Build Basic Shares Outstanding 606,329,598 606,329,598 6
Slide 21: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data The following tables present the amounts of our subscription, transactional, and re-occurring revenues including as a percentage of our total revenues, for the periods indicated, as well the drivers of the variances between per
Slide 22: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data The following tables present the amounts of our subscription, transactional, and re-occurring revenues including as a percentage of our total revenues, for the periods indicated, as well the drivers of the variances between per
Slide 23: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Descriptions Adjusted EBITDA adjustments Three Months Ended December 31, Twelve Months Ended December 31, 1. In 2020, this is related to a new transition services agreement and offset by the (in millions) 2020 2019 2020 2019 re
Slide 24: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Descriptions Twelve Months Ended Adjusted EBITDA adjustments December 31, (in millions) 2020 1. In 2020, this is related to a new transition services agreement and offset by the reverse transition Net loss $ (106.3) services ag
Slide 25: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Three Months Ended December 31, Twelve Months Ended December 31, Descriptions 2020 2020 Adjusted Net Income and Adjusted Diluted EPS adjustments (in millions, except per share amounts) Amount Per Share Amount Per Share 1. In 20
Slide 26: Non GAAP Reconciliation – Debt to Net Debt and Free Cash Flow
Non GAAP Reconciliation – Debt to Net debt December 31, December 31, (in millions) 2020 2019 Total debt outstanding $ 3,547.4 $ 1,665.0 Cash and cash equivalents 257.7 76.1 Total net debt outstanding $ 3,289.7 $ 1,588.9 Non GAAP Reconciliation – Net Cash Provided By (Used In) Operating Activities to
Slide 27: Non GAAP Reconciliation – Revenues, Net to Adjusted Revenues
Non GAAP Reconciliation – Revenues, Net to Adjusted Revenues Year Ending December 31, 2021 (Forecasted) (in millions) Low High Revenues, net $ 1,780.0 $ 1,840.0 Adjusted revenues, net $ 1,780.0 $ 1,840.0 Non GAAP Reconciliation – Net Income to Adjusted EBITDA Reconciliation Year Ending December 31,
Slide 28: Non GAAP Reconciliation – Net Loss Per Share to Adjusted Diluted EPS
Non GAAP Reconciliation – Net Loss Per Fully Diluted Weighted Shares Outstanding to Adjusted Diluted EPS Year Ending December 31, 2021 Reconciliation (Forecasted) Descriptions (in millions, except per share amounts) Low High Adjusted Diluted EPS Adjustments Per Share Per Share 1. Includes restructur