Slide 1: 3Q2019 Earnings Presentation
3Q2019 Earnings Presentation October 29, 2019 © 2019 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
3Q2019 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
3Q2019 Earnings Presentation Business and Financial Highlights • Organic constant currency (OCC) revenue grew 7.6%, driven by continued strength in Insurance and solid improvement in Energy and Specialized Markets • OCC adjusted EBITDA grew 7.7%, reflecting investments in future growth opportunities
Slide 4: Financial Summary
3Q2019 Earnings Presentation Financial Summary Three months ended September 30 Subscription/Long-Term Revenue 2019 2018 % change Revenue $653M $599M 9.0% Adjusted EBITDA 309M 284M 9.0% 80% 80% YTD19 YTD18 Adjusted EBITDA margin 47.4% 47.4% -1 bps Net income 33M 166M -80.2% International Revenue Adju
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
3Q2019 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins OCC Revenue OCC Adjusted EBITDA Total Adjusted EBITDA Margin 7.1% 7.7% 6.8% 7.2% 7.6% 6.1% 6.5% 6.7% 5.4% 5.2% 5.4% 4.7% 47.2% 47.4% 47.4% 4.2% 46.9% 47.1% 46.7% 46.6% 1.6% FY18 YTD19 3Q18 4Q18 1Q19 2Q19 3Q19 F
Slide 6: Segments
Segments © 2019 Verisk Analytics, Inc. All rights reserved. 6
Slide 7: Insurance
3Q2019 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 info, claim outcomes and fighting fraud at e
Slide 8: Insurance Quarterly Performance
3Q2019 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights % change • UW & rating growth was broad-based with strong results in personal and commercial lines and in our international businesses 3Q19 3Q18 Reported OCC – Industry-standard programs and catastrophe model
Slide 9: Energy and Specialized Markets
3Q2019 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 Improving our understanding of the global Research & Analytics and Advisory Service
Slide 10: Energy and Specialized Markets Quarterly Performance
3Q2019 Earnings Presentation Energy and Specialized Markets Quarterly Performance Financials Business Highlights % change • OCC revenue growth of 8.7%, driven by market and cost intelligence solutions and core research and consulting revenues 3Q19 3Q18 Reported OCC – Solid growth in breakouts, inclu
Slide 11: Financial Services
3Q2019 Earnings Presentation Financial Services Big data, predictive analytics, and insights Portfolio Analytics, Regulatory Data Management, and Marketing Credit Risk Management, Fraud, and Abuse Solutions for financial institutions, including Risk management tools associated with competitive bench
Slide 12: Financial Services Quarterly Performance
3Q2019 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights % change • OCC revenue grew 2.7%, resulting primarily from increases in enterprise data management and fraud and credit risk management 3Q19 3Q18 Reported OCC • Delivered higher subscription growth i
Slide 13: Segment Trends
3Q2019 Earnings Presentation Segment Trends Insurance Energy Financial Organic Constant Currency Revenue Growth Organic Constant Currency Adjusted EBITDA Growth 8.7% 9.5% 7.6% 10.9% 9.0% 15.0% 7.0% 7.2% 6.3% 7.7% 10.0% 7.2% 9.1% 5.0% 6.9% 5.0% 6.5% 7.9% 4.9% 5.5% 2.7% 1.9% 2.5% 3.1% -0.3% 3.0% 0.0%
Slide 14: Cash Flow and Capital
Cash Flow and Capital © 2019 Verisk Analytics, Inc. All rights reserved. 14
Slide 15: Cash Flow Utilization
3Q2019 Earnings Presentation Cash Flow Utilization (in $ millions) 2017 2018 YTD19 3Q18 3Q19 Net cash provided by operating activities $744M $934M $780M $227M $214M Capital expenditures (184)M (231)M (153)M (55)M (61)M Free cash flow (FCF) 560M 703M 627M 172M 153M Acquisitions, net of cash acquired
Slide 16: Capital Structure
3Q2019 Earnings Presentation Capital Structure as of 9/30/2019 Revolver due (in $ millions) August 2024 Bonds $2,650 Revolver drawn 010 Total debt $2,660 Debt/EBITDA1 2.4x Covenant level2 3.5x Investment grade ratings S&P: BBB (Jan-2019: ↑ from BBB-) 990 900 Moody’s: Baa2 (May-2018: ↑ from Baa3) Fit
Slide 17: Capital Management Philosophy
3Q2019 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 • Co
Slide 18: Appendix: Supplemental Slides and/or Non-GAAP Reconciliations
Appendix: Supplemental Slides and/or Non-GAAP Reconciliations © 2019 Verisk Analytics, Inc. All rights reserved. 18
Slide 19: Non-GAAP Reconciliations
3Q2019 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 20: Non-GAAP Reconciliations
3Q2019 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period 3Q19 3Q18 Segment Results Summary and Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $466.8M $142.5M $43.4M $427.7M $127.7M $43.3M Revenues from acquisitions
Slide 21: Non-GAAP Reconciliations
3Q2019 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period YTD19 YTD18 Segment Results Summary and Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $1,386.5M $413.1M $130.7M $1,269.7M $383.1M $128.4M Revenues from acqui
Slide 22: Non-GAAP Reconciliations
3Q2019 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS YTD19 YTD18 3Q19 3Q18 Net income $317.7M $452.5M $32.9M $166.0M plus: Amortization of intangible assets 100.1M 98.5M 33.3M 33.2M less: Tax effe
Slide 23: Non-GAAP Reconciliations
3Q2019 Earnings Presentation Non-GAAP Reconciliations Adjusted EBITDA | Historical Full-Year Periods Segment Adjusted EBITDA Reconciliation 2018 2017 2016 Insurance Segment – EBITDA $932.2M $855.8M $779.2M Insurance Segment – Acquisition-related costs (earn-out) 0.8M 0.2M —M Insurance Segment – Gain
Slide 24: © 2019 Verisk Analytics, Inc. All rights reserved.
© 2019 Verisk Analytics, Inc. All rights reserved. 24