Slide 1: 4Q2019 Earnings Presentation
4Q2019 Earnings Presentation 4Q2019 Earnings Presentation February 18, 2020 © 2020 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
4Q2019 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
4Q2019 Earnings Presentation Business and Financial Highlights • Normalizing for the revenue impact of the injunction related to our roof measurement solutions, organic constant currency (OCC) revenue grew 6.3% and OCC adjusted EBITDA grew 11.0% • All three verticals delivered growth, with Energy an
Slide 4: Financial Summary
4Q2019 Earnings Presentation Financial Summary Three months ended December 31 Subscription/Long-Term Revenue 2019 2018 % change Revenue $677M $614M 10.2% Adjusted EBITDA 319M 289M 10.3% 81% 80% 2019 2018 Adjusted EBITDA margin 47.1% 47.1% 0 bps Net income 132M 146M -9.6% International Revenue Adjust
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
4Q2019 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins OCC Revenue OCC Adjusted EBITDA Total Adjusted EBITDA Margin 9.0% 7.7% 7.2% 7.2% 7.6% 6.8% 6.7% 6.7% 6.1% 5.4% 5.4% 5.2% 5.4% 47.2% 47.4% 4.2% 47.0% 47.1% 47.1% 46.7% 46.6% FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q19 FY
Slide 6: Segments
4Q2019 Earnings Presentation Segments © 2020 Verisk Analytics, Inc. All rights reserved. 6
Slide 7: Insurance
4Q2019 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
4Q2019 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights • UW & rating growth accelerated in the quarter to 8.2% and was broad-based % change across both personal and commercial lines 4Q19 4Q18 Reported OCC – Industry-standard programs, LightSpeed suite of products
Slide 9: Energy and Specialized Markets
4Q2019 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
4Q2019 Earnings Presentation Energy and Specialized Markets Quarterly Performance Financials Business Highlights % change • OCC revenue growth of 7.1% was driven by market and cost intelligence solutions and core research revenues 4Q19 4Q18 Reported OCC – Solid growth in breakouts, including the ene
Slide 11: Financial Services
4Q2019 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
4Q2019 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights % change • OCC revenue grew 2.1%, resulting primarily from increases in fraud and credit risk management and portfolio management solutions offset in part by declines 4Q19 4Q18 Reported OCC in enterp
Slide 13: Segment Trends
4Q2019 Earnings Presentation Segment Trends Insurance Energy Financial Organic Constant Currency Revenue Growth Organic Constant Currency Adjusted EBITDA Growth 30.0% 23.8% 25.0% 9.0% 20.0% 7.2% 7.0% 6.4% 7.1% 13.2% 15.0% 7.0% 7.0% 5.1% 5.2% 6.6% 4.9% 7.2% 5.8% 10.0% 6.5% 5.0% Axis Title 2.9% 4.6% 6
Slide 14: Cash Flow and Capital
4Q2019 Earnings Presentation Cash Flow and Capital © 2020 Verisk Analytics, Inc. All rights reserved. 14
Slide 15: Cash Flow Utilization
4Q2019 Earnings Presentation Cash Flow Utilization (in $ millions) 2017 2018 2019 4Q18 4Q19 Net cash provided by operating activities $744M $934M $956M $173M $176M Capital expenditures (184)M (231)M (217)M (76)M (64)M Free cash flow (FCF) 560M 703M 740M 97M 112M Acquisitions, net of cash acquired (9
Slide 16: Capital Structure
4Q2019 Earnings Presentation Capital Structure as of 12/31/2019 Revolver due (in $ millions) August 2024 Bonds $2,650 Revolver drawn 495 Total debt $3,145 Debt/EBITDA1 2.8x 505 Covenant level2 3.5x Investment grade ratings S&P: BBB (Jan-2019: ↑ from BBB-) 900 Moody’s: Baa2 (May-2018: ↑ from Baa3) Fi
Slide 17: Capital Management Philosophy
4Q2019 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
4Q2019 Earnings Presentation Appendix: Supplemental Slides and/or Non-GAAP Reconciliations © 2020 Verisk Analytics, Inc. All rights reserved. 18
Slide 19: Non-GAAP Reconciliations
4Q2019 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
4Q2019 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 4Q19 4Q18 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $468.9M $160.5M $47.4M $436.2M $130.2M $47.5M Revenues from acquisitions
Slide 21: Non-GAAP Reconciliations
4Q2019 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 2019 2018 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $1,855.5M $573.6M $178.0M $1,705.9M $513.3M $175.9M Revenues from acquisi
Slide 22: Non-GAAP Reconciliations
4Q2019 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS 2019 2018 4Q19 4Q18 Net income $449.9M $598.7M $132.2M $146.2M plus: Amortization of intangible assets 138.0M 130.8M 37.9M 32.3M less: Tax effe
Slide 23: Non-GAAP Reconciliations
4Q2019 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: 4Q2019 Earnings Presentation
4Q2019 Earnings Presentation © 2020 Verisk Analytics, Inc. All rights reserved. 24