Slide 1: 3Q2020 Earnings Presentation
3Q2020 Earnings Presentation 3Q2020 Earnings Presentation November 4, 2020 © 2020 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
3Q2020 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
3Q2020 Earnings Presentation Business and Financial Highlights • Normalizing for the $8 million revenue impact of the roof measurement injunction, organic constant currency (OCC) revenue grew 4.9%. • In the 85% of our consolidated revenues that are predominantly subscription or subject to long-term
Slide 4: Financial Summary
3Q2020 Earnings Presentation Financial Summary Three months ended September 30 Subscription/Long-Term Revenue 2020 2019 % change Revenue $703M $653M 7.6% 82% 80% Net income 186M 33M 465.7% 3Q2020 3Q2019 Adjusted net income 218M 186M 17.2% Adjusted EBITDA 366M 309M 18.4% International Revenue Adjuste
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
3Q2020 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins 3Q Financial Review OCC Revenue OCC Adjusted EBITDA Total Adjusted EBITDA Margin 14.8% 12.4% 52.1% 11.6% 51.3% 7.7% 9.0% 49.8% 7.2% 7.6% 7.4% 6.7% 5.4% 47.4% 5.0% 47.1% 47.0% 3.6% 3.2% 46.1% 1.1% FY19 YTD20 3Q1
Slide 6: Segments
3Q2020 Earnings Presentation Segments © 2020 2017 Verisk Analytics, Inc. All rights reserved. 6
Slide 7: Insurance
3Q2020 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 claim outcomes and fighting fraud at every i
Slide 8: Insurance Quarterly Performance
3Q2020 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights • UW & rating grew 6.5% on an OCC basis, and was broad-based across both % change personal and commercial lines. 3Q20 3Q19 Reported OCC – Industry-standard programs and catastrophe modeling solutions delivere
Slide 9: Energy and Specialized Markets
3Q2020 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
3Q2020 Earnings Presentation Energy and Specialized Markets Quarterly Performance Financials Business Highlights • OCC revenue decreased 1.0%, due to declines in consulting and implementation % change projects across the energy segment. 3Q20 3Q19 Reported OCC • Subscription revenues in core research
Slide 11: Financial Services
3Q2020 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
3Q2020 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights % change • OCC revenue increased 1.6%, reflecting solid growth in our subscription business, mostly offset by declines in spend-informed analytics related to 3Q20 3Q19 Reported OCC COVID-19 impacts.
Slide 13: Cash Flow and Capital
3Q2020 Earnings Presentation Cash Flow and Capital © 2020 2017 Verisk Analytics, Inc. All rights reserved. 13
Slide 14: Cash Flow Utilization
3Q2020 Earnings Presentation Cash Flow Utilization (in $ millions) 2018 2019 YTD20 3Q19 3Q20 Net cash provided by operating activities $934M $956M $819M $214M $207M Capital expenditures (231)M (217)M (174)M (61)M (65)M Free cash flow (FCF) 703M 740M 645M 153M 142M Acquisitions (net of cash acquired)
Slide 15: Capital Structure
3Q2020 Earnings Presentation Capital Structure as of Revolver due Sep-2020 for renewal (in $ millions) August 2024 Bonds $3,150 Revolver Drawn -- Total Debt 1 $3,150 Debt/EBITDA 2 2.26x 995 Covenant level 3 3.50x 900 Investment Grade Ratings 600 450 500 S&P BBB 350 350 Moody’s Baa2 2021 2022 2023 20
Slide 16: Capital Management Philosophy
3Q2020 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. •
Slide 17: Appendix: Supplemental Slides and/or Non-GAAP Reconciliations
3Q2020 Earnings Presentation Appendix: Supplemental Slides and/or Non-GAAP Reconciliations © 2020 2017 Verisk Analytics, Inc. All rights reserved. 17
Slide 18: Non-GAAP Reconciliations
3Q2020 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
3Q2020 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 3Q20 3Q19 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $498.6M $163.8M $40.3M $469.0M $140.3M $43.4M Revenues from acquisitions
Slide 20: Non-GAAP Reconciliations
3Q2020 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and YTD20 YTD19 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $1,474.4M $478.2M $118.6M $1,393.5M $406.1M $130.7M Revenues from acqui
Slide 21: Non-GAAP Reconciliations
3Q2020 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS YTD20 YTD19 3Q20 3Q19 Net income $536.5M $317.7M $185.8M $32.9M plus: Amortization of intangibles 123.6M 100.1M 41.5M 33.3M less: Income tax ef
Slide 22: Non-GAAP Reconciliations
3Q2020 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: 3Q2020 Earnings Presentation
3Q2020 Earnings Presentation © 2020 Verisk Analytics, Inc. All rights reserved. 23