Verisk Analytics, Inc. · NASDAQ:VRSK
Verisk Analytics — Raymond James 41st Annual Institutional Investors Conference (March 2020)
24 slides from Verisk Analytics's conference presentation, Mar 3, 2020
Slide 1: Verisk Analytics
Verisk Analytics Lee Shavel Chief Financial Officer Raymond James Institutional Investor Conference March 3, 2020 © 2020 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
Investor 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, uncertainties,
Slide 3: A Leading Data Analytics Partner to Our Customers
Investor Presentation A Leading Data Analytics Partner to Our Customers Insurance Energy Financial Services 71% 22% 7% of revenue of revenue of revenue We help our customers • Assess and price risk with • Manage risk across the natural resources • Portfolio benchmarking more accuracy value chain • A
Slide 4: Financially Sound, Data Rich, and Global
Investor Presentation Financially Sound, Data Rich, and Global 1971Founded $27B Market cap 19PB of information in our data stores 30 Countries ~9,300 Employees © 2020 Verisk Analytics, Inc. All rights reserved. 4
Slide 5: Our Distinctives
Investor Presentation Our Distinctives What Sets Us Apart and Guides Our Company Unique Deep Domain Deep Integration Steady Stream Data Assets Expertise into Customer of First-to-Market Workflows Innovations © 2020 Verisk Analytics, Inc. All rights reserved. 5
Slide 6: Strategy for Growth
Investor Presentation Strategy for Growth Increase Solution Develop New Leverage Our Pursue Strategic Penetration Proprietary Data Sets Intellectual Capital Acquisitions We help our customers improve operations, decisions, and performance. © 2020 Verisk Analytics, Inc. All rights reserved. 6
Slide 7: Capitalizing on Megatrends That Affect Our Business
Investor Presentation Capitalizing on Megatrends That Affect Our Business Increasing Demand for Automation Energy Transition Outlook: Data Analytics Scalability Challenge © 2020 Verisk Analytics, Inc. All rights reserved. 7
Slide 8: Our Strategic Planning and Long-Term Financial Targets
Investor Presentation Our Strategic Planning and Long-Term Financial Targets ORGANIC REVENUE GROWTH 7%–8% on average, over time 1. Define business strategy 6. Present 2. Assess macro to BOD and competitive environment ORGANIC EBITDA GROWTH 1–2 points faster than revenue growth 5. Devise 5-year 3. Re
Slide 9: Value Creation Strategy
Investor Presentation Value Creation Strategy Attractive Operating and Growing Value Cash Flow Returns on Creation Growth Capital • Organic revenue growth • Investment opportunities • Operating leverage (internal and external) • Expense discipline • Capital discipline © 2020 Verisk Analytics, Inc. A
Slide 10: Capital Management Philosophy
Investor 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 • Allocate
Slide 11: Financial Results
Financial Results © 2020 Verisk Analytics, Inc. All rights reserved. 11
Slide 12: Long-Term Sustainable Growth
Investor Presentation Long-Term Sustainable Growth1,2,3 Total Organic Revenue Revenue $ % Growth Normalized Organic Constant Currency3 8.5% 8.0% 7.8% 7.8% 7.7% 7.2% 6.9% 7.1% 6.7% 5.6% 5.8% 4.6% 4.2% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1. Organic growth includes business
Slide 13: High-Quality Recurring Revenue across a Diversified Solution Set
Investor Presentation High-Quality Recurring Revenue across a Diversified Solution Set Revenue – Segment Breakdown Revenue – Subscription vs. Non-Subscription $2.0B $2.1B $2.4B $2.6B $2.0B $2.1B $2.4B $2.6B 7% 7% 7% 7% 22% 21% 22% 22% 16% 19% 20% 19% 71% 72% 71% 71% 84% 81% 80% 81% 2016 2017 2018 20
Slide 14: Healthy Margin Profile
Investor Presentation Healthy Margin Profile Adjusted EBITDA1,2 Adjusted EBITDA Margins1,2 $1,130M $1,224M $998M $1,036M 50.0% 48.3% 47.2% 47.0% 2016 2017 2018 2019 2016 2017 2018 2019 Capital Expenditures as a % of Revenue 1 Free Cash Flow 1,3 8.6% 9.6% $740M 7.3% 8.3% $703M $510M $560M 2016 2017 2
Slide 15: Capital Expenditures
Investor Presentation Capital Expenditures 231 $217M CapEx as a % of revenue to come down 183 to mid-single-digit level over time 146 138 115 Internally Developed Software 105 53 43 Hardware/Third-Party Software $23M 26 28 Non-IT 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 CapEx as a
Slide 16: Core Verisk Commitments
Investor Presentation Core Verisk Commitments Commitments to our stakeholders—customers, employees, shareholders, and society Verisk Analytics is committed to the UN Global Compact corporate responsibility initiative and its principles in the areas of human rights, labor, the environment, and anti-c
Slide 17: Our Commitment to Environmental Responsibility
Investor Presentation Our Commitment to Environmental Responsibility For two consecutive years, we’ve balanced 100% of our Scope 1 and 2 emissions and 100% of our Scope 3 business air travel by investing in renewable energy certificates and carbon offsets. SCOPE 1 Mobile Stationary Fugitive We conti
Slide 18: Governance
Investor Presentation Governance Quantitative, transparent, performance-based, and aligned with stakeholders Short-Term Incentive Long-Term Incentive As of 2018 As of 2018 CEO Other Named Officers Named Officers 20% 25% 40% 50% 50% 50% 40% 25% Adjusted organic revenue targets Adjusted organic EBITDA
Slide 19: A Differentiated Business Model
Investor Presentation A Differentiated Business Model • Exceptional businesses with unique and defensible data sets • Substantial growth opportunities capitalizing on megatrends across verticals • Stable subscription revenue base with established organic growth record • Scaled business model with le
Slide 20: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations © 2020 Verisk Analytics, Inc. All rights reserved. 20
Slide 21: Non-GAAP Reconciliations
Investor 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 non-GAAP
Slide 22: Non-GAAP Reconciliations
Investor Presentation Non-GAAP Reconciliations Adjusted EBITDA 2019 2018 2017 2016 2015 2014 2013 Net income $449.9M $598.7M $555.1M $591.2M $507.6M $400.0M $348.4M Depreciation and amortization of fixed assets 185.7M 165.3M 135.6M 119.1M 96.6M 65.4M 49.2M Amortization of intangible assets 138.0M 13
Slide 23: Non-GAAP Reconciliations
Investor Presentation Non-GAAP Reconciliations Free Cash Flow 2019 2018 2017 2016 Net cash provided by operating activities $956.3M $934.4M $743.5M $577.5M Net cash provided by operating activities from discontinued operations —M —M —M (21.4)M Capital expenditures (216.8)M (231.0)M (183.5)M (156.5)M
Slide 24: © 2020 Verisk Analytics, Inc. All rights reserved.
© 2020 Verisk Analytics, Inc. All rights reserved. 24
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