Crawford & Company · NYSE:CRD.A
Crawford & — SunTrust Financial Services Unconference 2013
31 slides from Crawford &'s conference presentation, May 21, 2013
Slide 1: Crawford & Company
Exhibit 99.1 Crawford & Company SunTrust Financial Services Unconference May 21-22, 2013
Slide 2: Forward-Looking Statements and Additional Information
FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION Forward-looking statements –This presentation contains forward-looking statements, including statements about the future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quant
Slide 3: Crawford & Company at a Glance
Crawford & Company at a Glance at May 13, 2013 Exchange/Tickers: NYSE: CRDA and CRDB Trailing 52 week High/Low: CRDA: $3.13-$5.98 CRDB: $3.25-$8.60 Market Capitalization (5/13/13): $394.0 million Annual Dividend/Yield (5/13/13): CRDA: $0.16 or 3.6% CRDB: $0.12 or 2.2% Analyst Coverage: Adam Klauber,
Slide 4: A Business Services Leader since 1941
A Business Services Leader since 1941 The world’s largest independent provider of global claims management solutions Multiple globally recognized brand names: Crawford, Broadspire, GCG Clients include multinational insurance carriers, brokers and local insurance firms as well as 200 of the Fortune 5
Slide 5: Our Global Strength
OUR GLOBAL STRENGTH $1.2 Billion Revenue Company 70+ Countries 700 Locations 8,500 Employees Crawford & Company 5
Slide 6: Diversified Business and Clients
Diversified Business and Clients 2012 Revenues of approximately $1.2 Billion Broadspire EMEA/AP • Workers’ Compensation and Liability Claims Administration • Medical and Case Management 20.3% 31.2% • Property and Casualty Services • Long-Term Care Services • Global Technical • Integrated Disability
Slide 7: Catalysts/Drivers
Catalysts/Drivers Cyclical Positive Industry Claim Trends: 5 Year Revenues ($ in millions) CAGR: 2.9% Increased underwriting pressure creates a positive claim trend. Weather/Catastrophe Trends: Catastrophic events worldwide are increasing in severity and frequency. Crawford is uniquely positioned to
Slide 8: Crawford Provides More Than Claims Services
Crawford Provides More Than Claims Services P&C outsourced claims services provided about $575 million, or 49%, of total Crawford revenue in 2012 Approximate 2012 Revenue Mix $ in millions • Claims services is a mature business in most geographies • Revenues are driven by claims volume, which is aff
Slide 9: Crawford's Expertise
Crawford’s Expertise Claims Services: Thai Flooding Catastrophe Response Business Process Outsourcing: Deepwater Horizon Consulting: Medical Management
Slide 10: Catastrophe Response: Thai Flooding
Catastrophe Response: Thai Flooding Top ten historic insurance loss Crawford handling losses in excess of $4 billion Flooding affected an area the size of South Carolina Leveraged global capabilities through deployment of 160 staff including 50 support staff and 35 senior adjusters from other locati
Slide 11: Global Natural Catastrophe Update
Global Natural Catastrophe Update Natural catastrophes worldwide 1980 2012 – Natural catastrophes per year more than doubled over period Crawford is uniquely positioned to respond on a global basis Number of Events 1 200 1 000 800 600 400 200 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 20
Slide 12: High-Volume Claims Services: Deepwater Horizon
High-Volume Claims Services: Deepwater Horizon The Garden City Group (GCG) is the recognized Legal Settlement leader in legal administration services for class Revenues ($ in millions) action settlements and other claims administration, bankruptcy cases and legal noticing programs. Largest program i
Slide 13: Garden City Group Ranks First Among Claims Administrators
Garden City Group Ranks First Among Claims Administrators Cases Handled: 100 Total Amount Settled: $50.5 billion BMC Group (4), $1.9 Source: Securities Class Action Services Report, Most Frequent Claims Administrators in SCAS 100, Jan. 2013 Crawford & Company 13
Slide 14: Consulting: Medical Management
Consulting: Medical Management Medical costs are currently 60% of workers compensation cost and are estimated to be over 70% by 2016, increasing the importance of effective medical cost containment. Case managers proactively manage medical treatment in the rehabilitation process, enabling our client
Slide 15: Financial Review and Operational Focus
Financial Review and Operational Focus
Slide 16: Crawford 5 Year Segment Performance
Crawford 5 Year Segment Performance Revenues (in 000s) Consistent growth in revenues and earnings in EMEA/AP Strong gains in LSA, driven in part by Gulf Coast class action activity Soft claims environment Operating Earnings (in 000s) affected Americas growth. Opportunity for earnings recovery. Broad
Slide 17: 2012 Business Summary
2012 Business Summary Record revenues of $1.177 billion Record consolidated operating earnings of $110.2 million Record operating cash flow of $92.9 million Including special payment, dividends of $0.20 per CRDA and per$0.16 CRDB Revenues Consolidated Operating Earnings ($ in millions) ($ in million
Slide 18: First Quarter 2013 Financials
First Quarter 2013 Financials Crawford & Company Income Statement Highlights Unaudited ($ in thousands, except per share amounts) Quarters Ended March 31, 2013 2012 % Change Revenues $286,281 $267,753 7% Costs of Services 213,341 199,707 7% Selling, General, and Administrative Expenses 58,950 55,679
Slide 19: 2013 Operational Focus
2013 Operational Focus Sustain Operating Performance through Improved Profitability Americas improvement in U.S. Property & Casualty and Canada Continued progress in Broadspire Strengthen the Balance Sheet Manage debt levels and pension obligations Drive operating cash flow to support business growt
Slide 20: Most Recent 2013 Guidance
Most Recent 2013 Guidance On May 6, 2013, Crawford reaffirmed full year 2013 guidance as follows: Consolidated revenues before reimbursements between $1.05 and $1.08 billion Consolidated operating earnings between $85.0 and $93.0 million Consolidated cash provided by operating activities between $65
Slide 21: Enhanced Return to Shareholders
Enhanced Return to Shareholders Dividends and Buyback: After the 2013 first quarter, Crawford declared a regular quarterly dividend of $0.04 on CRDA and $0.03 on CRDB Including a $0.06 per share special dividend, during 2012, Crawford paid dividends of $0.20 per share on CRDA and $0.16 per share on
Slide 22: Crawford Capital Structure
Crawford Capital Structure Improving Balance Sheet Supports Return to Shareholders Consolidated Debt/Cash ($ in millions) Debt reduced by $62 million, or 25% since 2010 Pension risk management implemented in 2009 Material improvement in cash flow from both operations and working capital management N
Slide 23: Crawford Dynamic Investment Policy Glide Path
Crawford Dynamic Investment Policy Glide Path Percentage of Plan Assets Invested in Return-Seeking Asset Classes 70% 70.0% 60% 60.0% 50% 50.0% 40% 40.0% 30% 30.0% 20% Funded 20.0% Ratio: 10% 78% 10.0% 0% 0.0% 65% 70% 75% 80% 85% 90% 95% 100% Funded Ratio Plan benefit obligations and assets both reac
Slide 24: Management Alignment with Shareholders
Management Alignment with Shareholders Balanced short and long term system focused on strategic priorities and aligned with shareholders Short-Term Incentive Compensation Plan Matrix: Stock Ownership Guidelines: Multiple of Metric: Weight: Officer: Base Salary: Revenues 30% President/CEO 3x Operatin
Slide 25: Capital Structure and Governance
Capital Structure and Governance Class A and B Shares: As of March 5, 2013, there were approximately 29.6 million shares of Class A Common Stock and24.7 millionsharesof ClassBCommonStockoutstanding. Thetwo classes are substantially identical, except with respect to the voting rights of the Class B s
Slide 26: Crawford Is Positioned for Strong Returns
CRAWFORD IS POSITIONED FOR STRONG RETURNS Crawford & Company 26
Slide 27: Appendix
Crawford & Company Appendix
Slide 28: Non-GAAP Financial Information
Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comparable to oth
Slide 29: Non-GAAP Financial Information
Non-GAAP Financial Information Reconciliation of Non-GAAP Items Unaudited ($ in thousands) 2008 2009 2010 2011 2012 Q1 2013 Q1 2012 Revenues Before Reimbursements Total Revenues $1,135,916 $1,046,202 $1,110,801 $1,211,362 $1,266,138 $ 307,126 $ 287,346 Reimbursements (87,334) (78,334) (80,384) (86,0
Slide 30: Non-GAAP Financial Information, continued
Non-GAAP Financial Information, continued Reconciliation of Non-GAAP Items Unaudited ($ in thousands) December 31, 2012 Net Debt Short-term borrowings $ 13,275 Current installments of long-term debt and capital leases 838 Long-term debt and capital leases, less current installments 152,293 Total deb
Slide 31: Crawford & Company
Crawford Crawford & Company
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