Verisk Analytics, Inc. · NASDAQ:VRSK
Verisk Analytics — J. P. Morgan Ultimate Services Investor Conference 2016
27 slides from Verisk Analytics's conference presentation, Nov 15, 2016
Slide 1: Verisk Analytics
Verisk Analytics Eva Huston Chief Financial Officer November 15, 2016
Slide 2: Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures
Forward Looking Statements, Safe Harbor & 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, uncertainties, and other factors that ma
Slide 3: Verisk is a Leading Vertical Data Analytics Provider
Verisk is a Leading Vertical Data Analytics Provider The Verisk Way – Distinctives Verticals We Serve Natural Financial Insurance Services Resources Unique Deep Domain Data Assets Expertise Analytics Digital Insight via Global IT/Data Proprietary/ Framework Platforms Center Infrastructure Unstructur
Slide 4: History of Growth and Innovation
History of Growth and Innovation 1971 1980–1996 1997 2002–2008 2009 Today For-profit Verisk Analytics Scalable data and Not-for-profit Significant AIR Worldwide corporation formed and IPO analytic solutions offered advisory and enhancement of and Xactware transition completed to vertical markets rat
Slide 5: Unique/Valuable Data Assets are the Foundation for Our Solutions
Unique/Valuable Data Assets are the Foundation for Our Solutions 19B+ More than 19 billion records in commercial and personal lines • More than 1,800 insurers provide data 100+ More than 100 models covering natural hazards in 100 countries • Almost 3 billion records processed each year 37 37 years o
Slide 6: Global Platform
SERVE | ADD VALUE | INNOVATE Global Platform Bath Edinburgh Dublin Guildford Uxbridge London Chicago Minneapolis Cal Copenhagen algary, Montreal / er Nase oe Halifax / Va Astana : | San Francisco Boston e_ Vienna “ E0u \S \\ Middletown Kathmandu Tokyo Lehi s Middletown ate New York AN Gurgaon | 7 Ca
Slide 7: Attractive Business Model
Attractive Business Model • Recurring revenue stream and high barriers to entry − 80%+ (1) of total revenue is subscription and long-term contracts − Extremely high customer retention − Majority of revenue is prepaid quarterly or annually − Long-standing and deep relationships with our customers − D
Slide 8: The Verisk Formula
The Verisk Formula Steadily Growing Increasing Financial Newly Acquired Businesses Powered Capacity Businesses at by Innovation, with Reasonable Prices Expanding Margins with Similar and Low Capital Characteristics Intensity Stronger and Larger Company We can continue to drive leading organic growth
Slide 9: Strong Capital Structure to Support Growth
Strong Capital Structure to Support Growth as of 9/30/2016 Investment Grade Ratings ($ millions) S&P: BBB- Bonds $2,300 Moody’s: Baa3 Revolver Drawn 0, 00 Fitch: BBB+ Total Debt $2,300 Revolver expanded to Gross Debt/EBITDA (1) 2.1x $1,500M, due May 2020 Covenant level 3.5x 1,500 900 450 350 350 250
Slide 10: Insurance: Industry-Leading Analytics Solutions
Insurance: Industry-Leading Analytics Solutions Primary Risk Assessment Competitive Advantage Competitors Industry-Standard Extensive time-series data and coverage language Internal in >200M policies Insurance Programs Comprehensive database of 3.7M commercial Property Information buildings & rating
Slide 11: Energy: Wood Mackenzie - an Overview
Energy: Wood Mackenzie - an Overview What do we do? How do we win? How have we What will drive future grown? growth? Provide leading Differentiated Strong financial Large and diverse commercial value proposition record addressable market intelligence to built on proprietary the global information, S
Slide 12: Financial Services: Leading Provider of Data Analytic Solutions for Banks and Their Regulators
Financial Services: Leading Provider of Data Analytic Solutions for Banks and Their Regulators At the foundation of our Strategy value-creating solutions… • Unique and Proprietary Advertising Regulation Consortia Datasets • Deep Domain Expertise in Analytics and Banking Argus • Big-Data Technology P
Slide 13: Financial Services: Providing Valuable and Differentiated Solutions Built on Unique Data Assets
Financial Services: Providing Valuable and Differentiated Solutions Built on Unique Data Assets Credit Payment Payment Description Argus (1) Bureaus Networks Processors Transaction POS & online transaction detail Data (merchant, location, amount, date) Account Credit card, deposits, checking, and Da
Slide 14: Diverse, High Recurring Revenue Sources
Diverse, High Recurring Revenue Sources 3Q2016 Revenue Distribution (1) 3Q2016 YTD Subscription Base (1) Financial Energy & Services Specialized 7% 22% Transaction Revenue 18% Risk DA Assessment Subscription Insurance 36% Revenue 35% 82% Decision Analytics 64% Notes: 1. From continuing operations. 1
Slide 15: Verisk: Strong Track Record of Top-Line Growth
Verisk: Strong Track Record of Top-Line Growth 14% CAGR Revenue (1) ($ millions) $1,761 $1,431 $1,324 $1,185 2012 2013 2014 2015 Notes: 1. From continuing operations which excludes the divested Healthcare business. 15
Slide 16: Verisk's Differentiated Financial Model
Verisk’s Differentiated Financial Model Strong, Stable Revenue Growth (1)… and Leading Margins Power EPS (1,2) ($ millions),(organic revenue growth) (% EBITDA/Revenue),($ Earnings per Share) 51.9% 55.0% 50.9% 2,000 1,761 19.0% 1,800 50.0% $4.10 1,431 1,600 17.0% 45.0% 1,400 $3.60 $2.87 15.0% 1,200 4
Slide 17: Verisk: Disciplined Capital Allocation
Verisk: Disciplined Capital Allocation Acquisitions and earn-outs Share Repurchase ($ millions) 2012 2013 2014 2015 (1) 2016 Share Repurchase 163 279 778 20 183 Acquisitions and earn-outs 808 1 35 2,856 50 Cumulative Capital Allocation, $ billions (2) $1.4B, $3.8B, 28% 72% Notes: 1. 2015 acquisition
Slide 18: Multiple Paths to Growth
Multiple Paths to Growth • Strong track record of BOTH organic revenue increases and effective M&A • Opportunities remain large and growing • Share repurchases remain valuable alternative for capital • Leverage reference level: 2.5x gross Debt/EBITDA 18
Slide 19: Verisk Analytics, Third Quarter
Verisk Analytics, Third Quarter (1) 3Q Revenue Revenue ($ millions),(organic revenue growth) • 5.9% growth in 3Q2016 498 • Organic constant currency revenue 470 growth was 6.2% 26.0% 21.0% 16.0% 11.0% 7.3% 4.7% 6.0% 1.0% 2015 2016 3Q EBITDA $ EBITDA ($ millions) • Excluding last year’s gain on the e
Slide 20: Verisk Analytics
Verisk Analytics Eva Huston Chief Financial Officer Contact Investor Relations david.e.cohen@verisk.com
Slide 21: Appendix
Appendix 060216 © 2016 Verisk Analytics, Inc. All rights reserved.
Slide 22: Non-GAAP reconciliations
Non-GAAP reconciliations Constant currency revenue growth Our operating results reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which we transact change in value over time compared to the U.S. dollar; accordingly, we p
Slide 23: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA (1) ($ millions) 2015 2014 Net Income 487.5 354.0 Depreciation and amortization of fixed assets and intangible assets 167.0 95.5 Interest expense 121.4 70.0 Provision for income taxes 196.6 208.5 Plus: Nonrecurring items related to the Wood Mackenzie acquisit
Slide 24: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EPS (1) ($ millions, except shares and per share amounts) 2015 2014 Income from continuing operations 487.5 354.0 Plus: Amortization of intangibles 70.4 30.1 Less: Income tax effect on amortization of intangibles -19.2 -11.4 Plus: Nonrecurring items related to the W
Slide 25: Non-GAAP reconciliations
Non-GAAP reconciliations Free Cash Flow (1) ($ millions) 2015 2014 Net cash provided by operating activities 623.6 489.4 Capital expenditures 166.1 146.8 Free Cash Flow 457.5 342.6 Notes: 1. Figures may not sum due to rounding. 25
Slide 26: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA (1) ($ millions) 3Q2016 3Q2015 Net Income 127.6 124.2 Depreciation and amortization of fixed assets and intangible assets 52.2 39.7 Interest expense 28.1 33.0 Provision for income taxes 44.8 57.9 Plus: Nonrecurring severance charges 2.1 0.0 Minus: Gain on sal
Slide 27: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EPS (1) ($ millions, except shares and per share amounts) 3Q2016 3Q2015 Income from continuing operations 127.6 124.2 Plus: Amortization of intangibles 22.7 12.6 Less: Income tax effect on amortization of intangibles -5.9 -3.3 Plus: Nonrecurring items related to the
Verisk Analytics — J. P. Morgan Ultimate Services Investor Conference 2016 on 6ix