Clarivate Plc · NYSE:CLVT
Clarivate — Q3 2020 Earnings Presentation
22 slides from Clarivate's earnings presentation, Oct 29, 2020
Slide 1: Q3 2020 Earnings Supplemental Materials
Q3 2020 Earnings Supplemental Materials October 29, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements These materials contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current belie
Slide 3: Q3 and Recent Highlights
Q3 and Recent Highlights Well-positioned business model to weather current environment IP GROUP: • Completed acquisition of CPA Global on October 1, creating a global IP powerhouse • Acquired control of Beijing IncoPat Technology Co., Ltd., a patent information and services provider in China Enhance
Slide 4: Q3 Results
Q3 Results Revenue growth driven by acquisitions, new business and pricing; YOY reported revenue increased 17%, excluding divestitures adjusted revenue increased 22%(1) Reported Revenue Adjusted Revenue(1) Adjusted EBITDA(1) +17% actual f/x +18% actual f/x Adjusted EBITDA +15% constant f/x +16% cons
Slide 5: Q3 Financial Highlights
Q3 Financial Highlights… Solid topline growth and cost efficiencies drove double-digit Adjusted EBITDA(1) growth and significant margin expansion September 30, Excluding ($ in millions except per share data) 2020 2019 % Change Organic(2) Commentary Divestitures(2) Recent acquisitions, new business a
Slide 6: Q3 Financial Highlights Continued
…Q3 Financial Highlights Continued Balance sheet flexibility and solid cash flow to continue to invest in strategic growth opportunities September 30, December 31, ($ in millions) $ Change Commentary on Change 2020 2019 Proceeds of ~$278 million received from the voluntary exercise of ~24 million wa
Slide 7: Efficiently Managing Cost Structure and Freeing up Resources
Efficiently Managing Cost Structure and Freeing up Resources Approximately $180-$185 million in permanent cost reductions ($ in millions) Total Savings Permanent Savings Timing NEW CPA Global Savings $75 million $75 million Q1 2022 COVID related $30M At least $5 million Q1-Q4 2020 $45 million in 202
Slide 8: Updated 2020 Outlook
Updated 2020 Outlook* 2020 including 4Q20 ($ in millions, except per share information) CPA Global(1) Low High Adjusted Revenue $1,280 $1,295 Adjusted EBITDA $480 $495 Adjusted EBITDA margin % 37% 38% Adjusted Diluted EPS(2) $0.55 $0.61 Adjusted Free Cash Flow $240 $260 2021 Outlook including the re
Slide 9: Historical Annualized Contract Value (ACV)
Historical Annualized Contract Value (ACV)(1) • Q2 and Q3 ’20 includes the acquisition of DRG completed on February 28, 2020 • All periods exclude divested products at actual F/X; divested on January 1, 2020 ($ in millions) $853 $861 $820 + $111 mm YoY + 15% constant f/x Ongoing ACV + 4% $759 $750 $
Slide 10: Appendix
(S Clarivate” APPENDIX
Slide 11: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures This presentation contains financial measures which have not been calculated in accordance with GAAP, including Adjusted Revenues and Adjusted EBITDA, because they are a basis upon which our management assesses our performanceand we believe they re
Slide 12: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures The use of Adjusted EBITDA instead of GAAP measures has limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results of operations and operating cash flows as
Slide 13: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Adjusted Net Income and Adjusted Diluted EPS We have begun to use Adjusted Net Income and Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS") in our analysis of the financial performance of the Company. We believe Adjusted Net Income and A
Slide 14: Quarterly Financial Summary
Quarterly Financial Summary ($ in millions) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Revenues, net $245.2 $234.0 $242.3 $243.0 $255.0 $240.6 $273.5 $284.4 Deferred revenue adjustment $0.2 $0.2 $0.1 $0.1 $0.1 $1.9 $3.4 $2.1 Adjusted Revenue(1)(2) $245.5 $234.2 $242.4 $243.1 $25
Slide 15: Diluted Share Count
Diluted Share Count 10 Comments 1 Note: the analysis is not intended to replace the Treasury Stock Method as required under ASC 260, Earnings per Share 2 1. Inconsistent with the requirements of ASC 260, but for illustrative purposes, this analysis uses hypothetical shares prices and not the actual
Slide 16: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data The following tables present the amounts of our subscription and transactional revenues, including as a percentage of our total revenues, for the periods indicated, as well the drivers of the variances between periods. Variance
Slide 17: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Descriptions Adjusted EBITDA adjustments Three Months Ended September 30, Nine Months Ended September 30, 1. In 2020, this is related to a new transition services agreement and offset by the (in millions) 2020 2019 2020 2019 re
Slide 18: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Descriptions Adjusted EBITDA adjustments Twelve Months 1. In 2020, this is related to a new transition services agreement and offset by the reverse transition Ended services agreement from the sale of MarkMonitor assets. In 201
Slide 19: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Three Months Ended September 30, Nine Months Ended September 30, Descriptions 2020 2020 Adjusted Net Income and Adjusted Diluted EPS adjustments (in millions, except per share amounts) Amount Per Share Amount Per Share 1. In 20
Slide 20: Non GAAP Reconciliation – Debt to Net debt
Non GAAP Reconciliation – Debt to Net debt September 30, December 31, (in millions) 2020 2019 Total debt outstanding $ 1,950.6 $ 1,665.0 Cash and cash equivalents 601.1 76.1 Total net debt outstanding $ 1,349.5 $ 1,588.9 Non GAAP Reconciliation – Net Cash Provided By (Used In) Operating Activities t
Slide 21: Non GAAP Reconciliation – Revenues, Net to Adjusted Revenues
Non GAAP Reconciliation – Revenues, Net to Adjusted Revenues Year Ending December 31, 2020 Descriptions (Forecasted) (in millions) Low High Adjusted Revenues, net Adjustments Revenues, net $ 1,280.0 $ 1,295.0 1. The Company is evaluating the purchase accounting impact, including the deferred revenue
Slide 22: Non GAAP Reconciliation – Net Loss Per Share to Adjusted Diluted EPS
Non GAAP Reconciliation – Net Loss Per Fully Diluted Weighted Shares Outstanding to Adjusted Diluted EPS Year Ending December 31, 2020 Reconciliation (Forecasted) Descriptions (in millions, except per share amounts) Low High Adjusted Diluted EPS Adjustments Per Share Per Share 1. Includes restructur