Cbiz, Inc. · NYSE:CBZ
Cbiz — Q4 2020 Earnings Presentation
34 slides from Cbiz's earnings presentation, Feb 18, 2021
Slide 1: Fourth-Quarter & Full-Year 2020 Investor Presentation
FOURTH-QUARTER & FULL-YEAR 2020 Investor Presentation February 18, 2021
Slide 2: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures Forward-looking statements in this presentation are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actu
Slide 3: Who We Are
Who We Are LEADING PROVIDER OF FINANCIAL, INSURANCE AND ADVISORY SERVICES TO PRIMARILY SMALL AND MIDSIZED BUSINESSES (SMB) IN THE U.S. See Appendix Click the link above to view our 2019 Corporate Social Responsibility Report or copy and paste this address into your browser: https://www.cbiz.com/Port
Slide 4: Revenue Profile
Revenue Profile Benefits and Insurance Services Employee Benefits Consulting Payroll / Human Capital Management Property & Casualty Financial Services Retirement Plan Services Accounting and Tax Government Health Care Consulting 31% Financial Advisory 2020 Transaction Advisory Revenu
Slide 5: Recurring Revenue
Recurring Revenue Recurring Services Project-based work Annual Tax Compliance Group Health Benefits Financial Consulting 30% Valuation Government Health Care Consulting Compensation Studies Property & Casualty Litigation Support Payroll Transaction Advisory Retirement Plan Serv
Slide 6: Client Profile
Client Profile Target Clients SMB 50 to 2,000 $5M to $200M Employees in Revenue NATIONAL RESOURCES – PERSONAL SERVICE Total Business Client Retention 82,000+ ~48,000 90% Clients Clients Rate 5
Slide 7: National Scale
National Scale 4,800 Team Members Boston Minneapolis New York 100+ Offices Salt Lake City Chicago Cleveland Philadelphia Mid-Atlantic Kansas City Denver St. Louis Phoenix/ Memphis 31 States Los Angeles Tucson San Diego Atlanta Tampa Bay 18 Major Markets South Florida OPPORTUNITY TO EXPAND INTO NEW A
Slide 8: Financial Services
Financial Services Business Advisory Services 16% Tax 34% 2020 REVENUE $629.8M Government 24% OPERATING INCOME $104.6M Health Care Consulting OPERATING MARGIN 16.6% 26% Accounting Accounting Provider Top 10 Nationally 2020 by Accounting Today 7
Slide 9: Benefits and Insurance Services
Benefits and Insurance Services Individual Human Capital Life Services Employee 4% Benefits Top 20Payroll 15% Consulting 35% 2020 REVENUE $297.8M Property & 20% OPERATING INCOME $49.4M Casualty OPERATING MARGIN 16.6% 25% Retirement Plan Services Places to Work in Broker of U.S. Retirement Plan Top A
Slide 10: Focus on Growth
Focus on Growth REVENUE GROWTH COMPONENTS COMPOUNDED ANNUAL INTERNAL GROWTH RATE SINCE 2016 ORGANIC CROSS-SERVING 4.8% EXTERNAL ACQUISITIONS EARNINGS PER SHARE (from continuing operations) 16.9% 9
Slide 11: Growth by Cross-Serving
Growth by Cross-Serving Estimated First-Year Annualized Revenue (in millions) $35 $35.3 $35.4 $33.7 $34.0 $32.4 $25 $15 $5 2016 2017 2018 2019 2020 Trust Co-location Training Recognition/ Reward 10
Slide 12: Growth by Acquisition
Growth by Acquisition ATTRIBUTES STRATEGY STRUCTURE • Successful local or • Focus on core services • Consideration based on regional company in specific geographic TTM EBITDA • Cultural fit markets • 50%+ paid up front • Strong leadership • Focus on high-growth • Balance paid on multi-year industrie
Slide 13: National Resource / Specialization
Competitive Advantage NATIONAL RESOURCES – PERSONAL SERVICE NATIONAL Strength PROVIDERS National Resource / Specialization CBIZ “We out-local the nationals and out-national the locals” LOCAL / REGIONAL Weakness Strength Proximity and Relationship 12
Slide 14: Financial Overview
Financial Overview CBIZ, Inc. 13
Slide 15: Key Financial Highlights
Key Financial Highlights TOTAL 2016 2020 CAGR GROWTH REVENUE (IN MILLIONS) $799.8 $963.9 20.5% 4.8% PRE-TAX INCOME (IN MILLIONS) $67.0 $103.5 54.4% 11.5% PRE-TAX MARGIN 8.4% 10.7% 230 bps GAAP EPS (FROM CONTINUING OPERATIONS) $0.76 $1.42 86.8% 16.9% 14
Slide 16: 2020 Highlights & 2021 Guidance
2020 Highlights & 2021 Guidance 2020 2020 ORGANIC TOTAL 2021 SEGMENT REVENUE REVENUE GUIDANCE GROWTH GROWTH FINANCIAL SERVICES 0.8% 2.1% BENEFITS AND INSURANCE SERVICES -3.0% 0.5% NATIONAL PRACTICES 2.1% 2.1% REVENUE -0.4% 1.6% 5% to 8% GAAP EPS (FROM CONTINUING OPERATIONS) $1.47 8% to 12% TAX RATE
Slide 17: Revenue
Revenue Revenue (in millions) $1,000 $1,012.1- $948.4 $963.9 $1,041.0 $922.0 $800 $855.3 $799.8 $600 $400 $200 2016 2017 2018 2019 2020 2021e (1) Reflects guidance issued by the Company on February 18, 2021. This guidance speaks only as of this date and this presentation does not constitute confirma
Slide 18: Diluted Earnings per Share
Diluted Earnings per Share (from continuing operations) Diluted EPS from continuing operations $1.60 $1.53- $1.40 $1.59 $1.42 $1.20 $1.27 $1.00 $1.09 $0.80 $0.92 $0.76 $0.60 $0.40 $0.20 $0.00 2016 2017 2018 2019 2020 2021e (1) Reflects guidance issued by the Company on February 18, 2021. This guidan
Slide 19: Adjusted EBITDA
Adjusted EBITDA See Appendix for GAAP Reconciliation Adjusted EBITDA (in millions) $125 $132.1 $120.6 $100 $109.1 $104.0 $94.8 $75 $50 $25 $0 2016 2017 2018 2019 2020 Adjusted EBITDA Margin 11.9% 12.2% 11.8% 12.7% 13.7% 18
Slide 20: Capital Structure
Capital Structure STRATEGIC SHARE DEBT CAPEX ACQUISITIONS REPURCHASES LEVERAGE • Focused on high- • Strategic approach • Facility improvements • Strong cash flow growth opportunities • Neutralize impact of • Office equipment from operations • Typically complete newly issued shares • $400M unsecured
Slide 21: Operating Leverage
Operating Leverage GOAL IS TO IMPROVE PRE-TAX INCOME MARGIN BY 20 TO 50 BPS PER YEAR 12.0% Pre-tax Margin 10.0% 10.7% 9.8% 8.0% 8.4% 8.7% 8.7% 6.0% 4.0% 2.0% 0.0% 2016 2017 2018 2019 2020 Adjusted G&A Margin(1) 4.5% 3.8% 4.3% 4.5% 4.6% (1) See Appendix for GAAP reconciliation. 20
Slide 22: Financial Goals
Financial Goals 2021 Guidance(1) 5% TO 8% 8% TO 12% CONTINUED REVENUE EPS STRONG GROWTH GROWTH CASH FLOW Long-Term Goals - Beyond 2021 (1) Reflects guidance issued by the Company on February 18, 2021. This guidance speaks only as of this date and this presentation does not constitute confirmation or
Slide 23: Investment Highlights
Investment Highlights OPERATIONAL FINANCIAL RESULTS LEVERAGE STRENGTH • Established national • Strong balance sheet • Proven ability to grow platform • Strong and consistent earnings at a faster rate • Full integration of cash flow than revenue growth acquired businesses • Credit facility provides •
Slide 24: Appendix
Appendix CBIZ, Inc. 23
Slide 25: Our Response to the COVID-19 Pandemic
Our Response to the COVID-19 Pandemic TEAM CLIENTS OPERATIONS • Swiftly & successfully • Assisting clients with their most • Came into 2020 in very strong transitioned 95%+ team urgent needs including applying financial condition members to remote work for PPP loan assistance and • Temporarily pause
Slide 26: COVID-19 Environment
COVID-19 Environment Position of Strength • Started 2020 in strong financial position • Provide essential services • Trusted advisor to clients • No disproportionate geographic, industry or client concentration • 70%+ of services naturally recurring • High client retention rates • Discretionary cost
Slide 27: 2020 Workplace Awards
2020 Workplace Awards CBIZ * 2020 Top Entry Level Employer 2020 Top Intern Employer Best Workplaces in Consulting and Professional Services 2020 Workplace Excellence Seal of Approval 2020 Best Places to Work in Insurance 2019 & 2020 Top 101 Best & Brightest Companies in the Nation * Akron, OH’ | Alp
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation GAAP RECONCILIATION Income from Continuing Operations to Non-GAAP Financial Measures (1) (In thousands) THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, 2020 2019 2020 2019 (Loss) income from continuing operations $ (90) $ (1,136) $ 78,347 $ 71,049 Inte
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation GAAP RECONCILIATION Reconciliation of GAAP Income from Continuing Operations to Adjusted EBITDA (1) (In thousands) Year Ended December 31, 2020 2019 2018 2017 2016 Income from continuing operations……………………………….. $ 78,347 $ 71,049 $ 61,573 $ 51,032 $ 40,607 Interest exp
Slide 30: Adjusted G&A Margin Reconciliation
Adjusted G&A Margin Reconciliation GAAP RECONCILIATION Reconciliation of GAAP Corporate G&A Expenses to Corporate G&A Expenses Excluding Deferred Compensation Plan (1) (In thousands) Year Ended December 31, 2020 2019 2018 2017 2016 Corporate G&A expenses…………………………………………..……….….. $ 46,066 $ 44,406 $
Slide 31: Adjusted Revenue Reconciliation
Adjusted Revenue Reconciliation (for services adversely impacted by COVID-19 discussed on the 4Q20 earnings call) CBIZ, INC. GAAP RECONCILIATION Revenue to Non-GAAP Financial Measures (1) (In thousands) TWELVE MONTHS ENDED DECEMBER 31, 2020 2019 Total Revenue $ 963,897 $ 948,424 % growth 1.6% Covid-
Slide 32: Adjusted Revenue Reconciliation
Adjusted Revenue Reconciliation (for services adversely impacted by COVID-19 discussed on the 4Q20 earnings call) CBIZ, INC. GAAP RECONCILIATION Revenue to Non-GAAP Financial Measures (1) (In thousands) TWELVE MONTHS ENDED DECEMBER 31, 2020 2019 Same-unit Revenue $ 943,227 $ 946,696 % growth -0.4% C
Slide 33: Adjusted Revenue Reconciliation
Adjusted Revenue Reconciliation (for services adversely impacted by COVID-19 discussed on the 4Q20 earnings call) CBIZ, INC. GAAP RECONCILIATION Revenue to Non-GAAP Financial Measures (1) (In thousands) THREE MONTHS ENDED DECEMBER 31, 2020 2019 Total Revenue $ 211,110 $ 203,138 % growth 3.9% Covid-1
Slide 34: Adjusted Revenue Reconciliation
Adjusted Revenue Reconciliation (for services adversely impacted by COVID-19 discussed on the 4Q20 earnings call) CBIZ, INC. GAAP RECONCILIATION Revenue to Non-GAAP Financial Measures (1) (In thousands) THREE MONTHS ENDED DECEMBER 31, 2020 2019 Same-unit Revenue $ 204,546 $ 202,323 % growth 1.1% Cov