S&p Global Inc. · NYSE:SPGI
S&p Global — Q1 2023 Earnings Presentation
34 slides from S&p Global's earnings presentation, Apr 27, 2023
Slide 1: S&P Global Quarterly Update 1Q 2023
1Q 2023 S&P Global Quarterly Update April 27, 2023 1
Slide 2: Safe Harbor statement under the Private Securities Litigation Reform Act of 1995
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995 This presentation contains “forward-looking Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in for
Slide 3: Comparison of adjusted information to U.S. GAAP information
Comparison of adjusted information to U.S. GAAP information This presentation includes Company financials on an as-reported basis, and on a pro forma basis as if The Company’s non-GAAP measures include adjustments that reflect how management views our the merger had closed on January 1, 2021, for pe
Slide 4: EU regulation affecting investors in credit rating agencies
EU regulation affecting investors in credit rating agencies European Union Regulation 1060/2009 (as amended) applies to credit rating agencies Any person obtaining direct or indirect ownership or control of 5% or more or 10% (CRAs) registered in the European Union (“EU”) and therefore to the activit
Slide 5: Quarterly Update Call Presenters
Quarterly Update Call Presenters Doug Ewout Mark Peterson Steenbergen Grant President and CEO Executive Vice Senior Vice President, President and CFO Investor Relations 5
Slide 6: Strategy, Vision, and Execution
Strategy, Vision, and Execution Doug Peterson President and CEO 6
Slide 7: First quarter highlights
First quarter highlights Financial highlights* Additional highlights Revenue increased 3% year over year, with positive Optimization of technology spend continues, with two revenue growth in five of our six divisions major project completions in the first quarter Adjusted expenses increased only 1%
Slide 8: Customer at the Core, Grow & Innovate, Lead & Inspire
Customer at the Core Grow & Innovate Data & Technology Lead & Inspire Execute & Deliver 8
Slide 9: Value creation evidenced in customer conversations
Customer at the Core Value creation evidenced in customer conversations Strategic alignment Customer value Customer focus on investment areas Contract value and retention rates of Private Markets and Energy improving year over year across Transition most divisions Commercial conditions Customer enga
Slide 10: Ratings customers have been opportunistic in issuing
Customer at the Core Ratings customers have been opportunistic in issuing Billed issuance down 7% Updates on market conditions ($ in billions) $732 Persistent higher interest rates $684 and inflation $301 $349 Strong start in Q1 negatively $57 impacted by regional bank Investment $61 concerns in Mar
Slide 11: Continued investment to drive innovation
Grow & Innovate Continued investment to drive innovation Product development Tactical and focused Vitality revenue acquisitions1 Platts Forward Curves within Energy Studio: Vitality revenue Impact product accounted for Launched new price 10.7% of total assessments for Black Mass and R-PET revenue2 i
Slide 12: Innovation and technology driving growth
Data & Technology Innovation and technology driving growth Data & Technology Strategic partnership with AWS announced in Q1 Kensho Classify launched on includes collaboration in product development Marketplace – AI tool that tags text and joint go-to-market initiatives documents at the paragraph lev
Slide 13: Focus on internal and external leadership
Lead & Inspire Focus on internal and external leadership For Our People Global Thought Leadership Event Highlight: CERAWeek Launched comprehensive First-ever “Look Forward” Attracted over 8,000 enhancements to our People published in the first quarter1 attendees – an increase of First initiative 34%
Slide 14: Revenue growth driven by five of six divisions
Execute & Deliver Revenue growth driven by five of six divisions 1Q23 Revenue TTM Adjusted TTM Adjusted Financial Performance Growth* Operating Margin** Operating Margin Y/Y** +5% 32.6% +250 bps (5)% 55.6% (650) bps +9% 45.2% +180 bps +10% 39.3% +10 bps +1% 69.0% +120 bps +2% 16.7% (290) bps Total S
Slide 15: 2023 economic factors facing the Company
2023 economic factors facing the Company Macroeconomic Environment: + Global supply chain alleviation – Mild recession +/– Uncertainty in banking end market Equity Markets: + Continued flows from active to passive +/– Sustained heightened volatility Difficult year-over-year comparison in – average a
Slide 16: 2023 debt issuance outlook
2023 debt issuance outlook S&P Global Ratings +3% +7% billed issuance assumption Global market -12% +4% issuance forecast1 -3.5% Forecast S&P Global Ratings billed issuance includes Global market issuance forecast is a the impact of levered loans, and excludes product of the S&P Global Ratings issua
Slide 17: Financial Strategy and Guidance
Financial Strategy and Guidance Ewout Steenbergen Executive Vice President and CFO 17
Slide 18: First quarter enterprise financial results
First quarter enterprise financial results Revenue* Adjusted Operating Profit & Expense** ($ in millions) ($ in millions) y/y y/y $3,072 $3,160 $3,072 $3,160 $100 2% $98 $341 $339 1% $358 Engineering Solutions $324 10% $1,388 $1,460 5% Indices $466 $508 9% Mobility 45.2% 46.2% 45.2% 41.2% Commodity
Slide 19: Continued growth in strategic investment areas
Continued growth in strategic investment areas Sustainability & Private Market Vitality Energy Transition1 Solutions2 Revenue3 ($ in millions) ($ in millions) ($ in millions) +27% +0% +17% $326 $69 $100 $100 $279 $54 Vitality 10.7% Index4 9.4% 1Q '22 1Q '23 1Q '22 1Q '23 1Q '22 1Q '23 Note: Categori
Slide 20: Delivering on cost and revenue synergies
Delivering on cost and revenue synergies Cost Synergies Revenue Synergies ($ in millions) ($ in millions) Targeting $600 million Targeting $350 million run- run-rate in 2023 rate in 2026 $350 $600 Targeting 85% achieved $552 Targeting 45% achieved in in 2023 2024 Achievement through 1Q23 $52 Target
Slide 21: Strong strategic capital allocation continues in 2023
Strong strategic capital allocation continues in 2023 Share repurchase Capital allocation towards growth Executed $500 million Accelerated Share Expected investment in organic strategic Repurchase (ASR) initiatives in 2023 of approximately $150 million New $1 billion Accelerated Share Repurchase set
Slide 22: S&P Global Market Intelligence
S&P Global Market Intelligence Revenue* Adjusted Operating Profit & Expense** ($ in millions) ($ in millions) y/y y/y $1,071 $1,019 $1,071 $1,019 $343 16% $264 $295 $255 4% 32.0% Desktop 29.0% $342 7% Data & Advisory Solutions $319 Adjusted Operating Profit $724 $728 1% Enterprise Solutions Adjusted
Slide 23: S&P Global Ratings
S&P Global Ratings Revenue* Adjusted Operating Profit & Expense** ($ in millions) ($ in millions) y/y y/y $868 $868 $824 $824 $109 $119 9% $64 $54 (16)% CRISIL, Other*** $89 (3)% $513 $480 (6)% $86 Governments $128 7% $137 Structured Finance Adjusted Operating Profit 59.1% 58.3% Financials Adjusted
Slide 24: S&P Global Commodity Insights
S&P Global Commodity Insights Revenue* Adjusted Operating Profit & Expense** ($ in millions) ($ in millions) y/y y/y $508 $508 $466 $466 $96 28% $75 Advisory and $234 17% $200 Transactional Services $99 (1)% $101 Upstream Data and Insights 46.1% Adjusted Operating Profit 43.0% Price Assessments $142
Slide 25: S&P Global Mobility
S&P Global Mobility Revenue* Adjusted Operating Profit & Expense** ($ in millions) ($ in millions) y/y y/y $358 $358 $324 $324 $62 11% $56 $140 14% $122 $87 11% $78 37.8% 39.1% Financials and Other Adjusted Operating Profit Manufacturing Adjusted Expense $202 $218 8% Dealer Adjusted Operating Margin
Slide 26: S&P Dow Jones Indices
S&P Dow Jones Indices Revenue* Adjusted Operating Profit & Expense** ($ in millions) ($ in millions) y/y y/y $339 $341 $339 $341 $66 $66 0% Data & Custom $50 $65 4% 30% $235 $245 Subscriptions Exchange-Traded Adjusted Operating Profit 69.3% 71.8% Derivatives Adjusted Expense Asset-Linked Fees Adjust
Slide 27: S&P Global Engineering Solutions
S&P Global Engineering Solutions Revenue* Adjusted Operating Profit & Expense** ($ in millions) ($ in millions) y/y y/y $98 $100 $98 $100 $6 (34)% $16 (10)% $9 $18 18.3% 16.2% Non-Subscription Adjusted Operating Profit 4% $80 $84 Adjusted Expense Subscription Adjusted Operating Margin $89 $94 6% 1Q
Slide 28: 2023 macroeconomic assumptions underlying guidance
2023 macroeconomic assumptions underlying guidance Real GDP United States Brent Crude 3 Global Market Growth 1 CPI 2 Debt Issuance 4 +2.7% +4.2% $83 -3.5% Global Average Per Barrel Range -12% to 4% United States +0.7% Eurozone +0.3% China +5.5% 1 S&P Global Ratings Economic Research - Global Economi
Slide 29: 2023 GAAP guidance
2023 GAAP guidance Initial GAAP Revenue Growth 10% - 12% Operating Profit Margin 34.0% - 35.0% Diluted EPS $8.65 - $8.85 29
Slide 30: 2023 adjusted guidance
2023 adjusted guidance Current Adjusted1 Assumed Contribution from ES Revenue Growth 4% - 6% $120 - $140 million Operating Profit Margin 45.5% - 46.5% Diluted EPS2 $12.35 - $12.55 1 Current adjusted assumes Engineering Solutions included in Jan – Apr 2023, prior adjusted assumed Engineering Solution
Slide 31: Updated 2023 division revenue outlook
Updated 2023 division revenue outlook Previous 2023 Current 2023 Revenue Growth* Revenue Growth* 6.5% - 8.5% 6.5% - 8.5% 4.0% - 6.0% 4.0% - 6.0% 6.5% - 8.5% 7.5% - 9.5% 6.5% - 8.5% 8.5% - 10.5% 0.0% - 2.0% 1.0% - 3.0% *For Market Intelligence, Commodity Insights, and Indices, growth rates compare re
Slide 32: Updated 2023 division operating margin outlook
Updated 2023 division operating margin outlook Previous 2023 Adjusted Current 2023 Adjusted Operating Operating Profit Margin Outlook* Profit Margin Outlook* 34.0% - 35.0% 34.0% - 35.0% 56.0% - 57.0% 56.0% - 57.0% 46.0% - 47.0% 46.0% - 47.0% 39.0% - 40.0% 38.5% - 39.5% 66.0% - 67.0% 67.0% - 68.0% *A
Slide 33: 1Q 2023 Earnings Call
1Q 2023 Earnings Call Doug Peterson Saugata Saha President and CEO President, S&P Global Commodity Insights Ewout Steenbergen Dan Draper Executive Vice President and CFO CEO, S&P Dow Jones Indices Mark Grant Senior Vice President, Investor Relations April 27, 2023 33
Slide 34: 1Q 2023 Earnings Call
1Q 2023 Earnings Call Doug Peterson REPLAY OPTIONS President and CEO Internet: Replay available for one year Ewout Steenbergen Go to http://investor.spglobal.com Executive Vice President and CFO Mark Grant Telephone: Replay available through May 26, 2023 Senior Vice President, Investor Relations Dom