Crawford & Company · NYSE:CRD.A
Crawford & — Investor Presentation (April 2019)
48 slides from Crawford &'s investor presentation, Apr 1, 2019
Slide 1: Crawford & Company Investor Presentation April 2019
Crawford & Company Investor Presentation April 2019 ® Exhibit 99.1
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 expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative a
Slide 3: Crawford & Company
Crawford & Company Crawford Claims Solutions (P&C adjusting solutions) Crawford TPA Solutions (Broadspire) Crawford Specialty Solutions (Global Technical Services & Contractor Connection) The world’s largest publicly listed independent provider of global outsourced claims management solutions 1.7 Mi
Slide 4: Our Mission and Vision
Crawford & Company loss resolution for carriers, brokers and corporates Our Mission Restoring and enhancing lives, businesses and communities. Our Vision To be the leading provider and most trusted source for expert assistance, serving those who insure and self-insure the risks of businesses and com
Slide 5: Comprehensive, intelligent outsourced solutions
We bring together thoughtful experts from around the world to offer comprehensive, intelligent outsourced solutions to our customers Loss Adjusting Third Party Administration Managed Repair Medical Management On-Demand Services Catastrophe Response
Slide 6: Value Proposition and Value Delivery System
Crawford & Company Value Proposition and Value Delivery System Customer-focused solutions driven by data and executed by experts globally to mitigate risk for carriers, brokers and corporates Value Proposition High-performing, caring and capable employees globally Flexible workforce with vast experi
Slide 7: End-to-End Outsourced Solutions
End-to-End Outsourced Solutions Multi-channel FNOL Pre & Post Loss Inspections Liability, Auto, WC & Disability Claims Property Claims Desk Adjusting CAT, Property & Auto Field Adjusting Business Interruption & Forensic Accounting Managed Repair ANALYTICS & REPORTING
Slide 8: Scope and Scale of Operations
Scope and Scale of Operations Comprehensive experience across the spectrum of the claims world1 Crawford Claims Solutions P&C Adjusting Solutions 1.2 million P&C claims managed 70 Countries with physical location 50,000 Field Resources Global Technical Services Large or Complex Claims 400+ Global te
Slide 9: Crawford—Attractive Business Model
Crawford—Attractive Business Model Experienced Management Team Aligned with Shareholders Global Product and Geographic Diversification Recurring Fee For Service Revenue Model Strong Cash Flow Generation Technology Enabled BPO Platform Blue Chip Global Client Base with Long-Term Relationships Solid B
Slide 10: Investment Thesis: 5% Revenue and 15% Earnings Growth
4 Management’s primary goal is to translate innovation and investment spending into sustained 5% revenue growth and 15% earnings growth, annually Deliver 5% Revenue and 15% Earnings Growth, Annually Goal: Deliver Sustained Revenue and Earnings Growth 5 Strong Balance Sheet & Cash Flow Characteristic
Slide 11: Experienced Executive Management Team
Experienced Executive Management Team 1 Name Background Experience Harsha V. Agadi President and Chief Executive Officer Leadership positions at both public and private companies, including several Fortune 500 companies Member of the Crawford Board of Directors since 2010 30+ Years Rohit Verma Chief
Slide 12: Insurance Industry Claims Trends
Insurance Industry Claims Trends Our businesses stand to benefit from a rising level of carrier outsourcing, increasing claim volume and severity, customer demand for scale, and an infusion of alternative capital Increasing Global Claim Volume and Severity The severity of P&C claims has consistently
Slide 13: Outsourced Claims Advantage Case Study: California Wild Fires Vineyard
Outsourced Claims Advantage Case Study: A Vineyard Impacted by the California Wild Fires Background The 2017 California wildfires approached an unprecedented $12 billion of insured losses A historic number of fires burned over 500,000 acres causing damage to almost 30 wineries in Napa, Sonoma and Me
Slide 14: Investing to Accelerate Revenue and Earnings Growth
Investing to Accelerate Revenue and Earnings Growth 2018 was a year of elevated strategic investments to drive growth in 2019, focused on: Market Share Driven by Sales Recruiting experienced, solutions-based sales people Increased local presence in attractive Tier 1 global markets Continued On-going
Slide 15: 2018 Investments in Market Leading Technology
2018 Investments in Market Leading Technology At Crawford, we’re not just embracing change, we’re leading it. Some of the significant investments we made in 2018 to develop solutions to meet clients’ needs and drive growth: Drone capabilities - WeGoLook has a network of over 2,000 licensed drone ope
Slide 16: Delivering Outsourced Solutions for Client and Industry Challenges
Crawford is Delivering Outsourced Solutions that Address Client and Industry Challenges Knowledge Insurtech will fast track claims to facilitate virtual claims handling Claims volatility will increase due to extreme weather events and increased construction along coast lines and other water sources
Slide 17: Innovating to Accelerate Growth and Reduce Costs
Innovating to Accelerate Growth, Improve Client Experience and Reduce Costs TruLook Claims triage process leverages self-service app, WeGoLook Lookers and traditional field adjusters to reduce costs and improve cycle times. Industry Solutions Focus on developing a complete range of specialized solut
Slide 18: TruLook
TruLookTM End-to-end handling of self-service, on-demand, and field adjusting needs 3 Client Submits claim via email, phone, or existing ordering platform Desk services Licensed adjuster assesses complexity and assigns to best-fit process YouGoLook (Low complexity) End user collects data via smartph
Slide 19: WeGoLook
WeGoLook 46K ~4.7 ~42.5 36% 100% Lookers Day turnaround Years of age Selection rate Quality Assurance Complete coverage across the nation with rapid delivery and infinite scale 3 Lookers Drone Operators WeGoLook combines technology with an on-demand workforce to gather and validation information any
Slide 20: Managed Repair
Managed Repair Reduce time-in-process and support your customers all the way to restoration Faster service Through rigorous performance management and consistent application of expectations, we improve cycle times and increase customer satisfaction. Accurate estimates Leveraging technology, people p
Slide 21: Specialized outsourced solutions for industry verticals
Focused on developing a complete range of specialized outsourced solutions focusing on industry verticals for managing risks specific to the targeted industry’s needs Tailored Industry Solutions Industry Verticals Integrated Solutions Construction Hospitality Transportation Total Property TruLook™ R
Slide 22: Innovation in Action
Innovation in Action At Crawford, we’re not just embracing change, we’re leading it Creative new outsourced solutions to address market gaps Industry Verticals Recall 360 Ongoing investment in new technologies via Crawford Innovative Ventures (CIV) WeGoLook YouGoLook TruLook In-house development of
Slide 23: Driving Growth
Driving Growth 5 % 15 % 4 Goal: Deliver 5% revenue growth and 15% earnings growth, annually. By holding indirect costs flat, with a 30% contribution margin, 5% revenue growth drives earnings growth of 15% and a 100 bps improvement in operating margins.
Slide 24: Strong Balance Sheet and Cash Flows
Strong Balance Sheet and Cash Flows 5 Balance Sheet Strengthened the Company’s balance sheet by paying down $35.3 million in debt and contributing $24.0 million to pension plans in 2018 Repurchased $10.4 million of common shares through 2018 and an additional $16.4 million in January 2019 representi
Slide 25: Focused on Consistent Shareholder Returns
Focused on Consistent Shareholder Returns Crawford continues to return capital to shareholders in the form of quarterly cash dividends and share repurchases During the year ended December 31, 2018, the Company repurchased 1,144,410 shares of CRD-A and 94,378 shares of CRD-B at an average cost of $8.
Slide 26: 2019 Guidance
YEAR ENDING DECEMBER 31, 2019 Low End High End Consolidated revenues before reimbursements $1.05 $1.10 billion Net income attributable to shareholders of Crawford & Company $46.0 $51.0 million Diluted earnings per share--CRD-A $0.85 $0.95 per share Diluted earnings per share--CRD-B $0.78 $0.88 per s
Slide 27: Focus on Execution
Focus on Execution 2018 was a year of solid execution and creating the foundation for a return to growth: Global Service Lines positioning Crawford to be a stronger partner to our clients Investing in new capabilities and outsourced solutions to open large market opportunities that we are uniquely p
Slide 28: Positioned For A Return To Growth
Positioned For A Return To Growth Growth: Increasing the velocity of revenue growth through continuous innovation as we work to deliver our goal of achieving 5% revenue growth and 15% earnings growth annually Looking forward, Crawford has four primary objectives for 2019: 1 2 3 4 System Readiness: P
Slide 29: Appendix A: Global Service Lines
Appendix A: Global Service Lines
Slide 30: Crawford Claims Solutions
Value Proposition Enhancing the policy holder experience through scalable field adjusting solutions and optimizing claim expense for clients Value Delivery System Most extensive network of field services in the world Widest range of innovative, end-to-end outsourced claims management solutions Scala
Slide 31: Third Party Administration Solutions: Broadspire
Third Party Administration Solutions: Broadspire Value Proposition Consistent and predictable reductions in clients’ total cost of risk delivered by comprehensive service teams Value Delivery System Client-centric integrated outsourced solutions powered by innovation and data science Analytically in
Slide 32: Crawford Specialty Solutions
Crawford Specialty Solutions Value Proposition Financial savings powered by analytics-driven insights delivered by world leading experts Value Delivery System Integrated end-to-end and project managed outsourced claims solutions Specialty practice groups Vast experience delivering expertise globally
Slide 33: Appendix B: Full Year 2018 Segment Results
Appendix B: Full Year 2018 Segment Results
Slide 34: Crawford Claims Solutions Segment Highlights
Crawford Claims Solutions Segment Highlights Revenues of $361.1 million versus $365.1 million Gross profit of $76.9 million versus $75.7 million Operating earnings of $9.8 million versus $17.5 million Gross profit margin of 21.3% versus 20.7% Operating earnings margin of 2.7% versus 4.8% Revenues do
Slide 35: Crawford TPA Solutions: Broadspire Segment Highlights
Crawford TPA Solutions: Broadspire Segment Highlights Revenues of $405.3 million versus $390.6 million Gross profit of $109.2 million versus $106.1 million Operating earnings of $36.9 million versus $38.2 million Gross profit margin of 26.9% versus 27.2% Operating earnings margin of 9.1% versus 9.8%
Slide 36: Crawford Specialty Solutions Segment Highlights
Crawford Specialty Solutions Segment Highlights Revenues of $304.5 million versus $350.2 million Gross profit of $106.9 million versus $115.9 million Operating earnings of $51.0 million versus $53.4 million Gross profit margin of 35.1% versus 33.1% Operating margin of 16.8% versus 15.3% Change in U.
Slide 37: Appendix C: Full Year 2018 Consolidated Financial Results
Appendix C: Full Year 2018 Consolidated Financial Results
Slide 38: 2018 Business Summary
December 31, December 31, ($ in millions, except per share amounts) 2018 2017 % Change Revenues $1,071.0 $1,105.8 (3 )% Non-GAAP Revenues excluding GCG business (1) $1,041.1 $1,029.6 1 % Net Income Attributable to Shareholders of Crawford & Company $26.0 $27.7 (6 )% Restructuring and Special Charges
Slide 39: Balance Sheet Summary
Unaudited ($ in thousands) December 31, 2018 December 31, 2018 December 31, 2017 December 31, 2017 Change Change Cash and cash equivalents $ 53,119 $ 54,011 $ (892 ) Accounts receivable, net 131,117 174,172 (43,055 ) Unbilled revenues, net 108,291 108,745 (454 ) Total receivables 239,408 282,917 (43
Slide 40: Operating and Free Cash Flow
Operating And Free Cash Flow (1) See Appendix for non-GAAP explanation and reconciliation Unaudited ($ in thousands) December 31, 2018 2018 December 31, 2017 2017 Variance Variance Net Income Attributable to Shareholders of Crawford & Company $ 25,978 $ 27,665 $ (1,687 ) Depreciation and Other Non-C
Slide 41: Appendix D: Non-GAAP Financial Information
Appendix D: Non-GAAP Financial Information
Slide 42: Appendix: Non-GAAP Financial Information
Appendix: 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 compara
Slide 43: Appendix: Non-GAAP Financial Information (continued)
Appendix: Non-GAAP Financial Information (continued) Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and
Slide 44: Revenues Before Reimbursements and Operating Earnings Reconciliation
Year Ended Year Ended Year Ended Year Ended Full Year Full Year December 31, December 31, December 31, December 31, Guidance Guidance Unaudited ($ in thousands) 2018 2018 2017 2017 2019 * 2019 * Revenues Before Reimbursements Total Revenues $ 1,122,979 $ 1,163,709 $ 1,143,000 Reimbursements (52,008
Slide 45: Adjusted EBITDA
Adjusted EBITDA Year Ended Year Ended Full Year Full Year December 31, December 31, December 31, December 31, Guidance Guidance Unaudited ($ in thousands) 2018 2018 2017 2017 2019 * 2019 * Net income attributable to shareholders of Crawford & Company $ 25,978 $ 27,665 $ 48,500 Add: Depreciation and
Slide 46: Segment Gross Profit
Segment Gross Profit Year ended Years ended (in thousands) December 31, 2018 December 31, 2018 December 31, 2017 December 31, 2017 Segment gross profit: Crawford TPA Solutions: Broadspire $ 109,224 $ 106,054 Crawford Claims Solutions 76,866 75,675 Crawford Specialty Solutions 106,937 115,892 Segment
Slide 47: Year Ended December 31, 2018 GAAP to Non-GAAP Reconciliation
Year Ended December 31, 2018 Unaudited ($ in thousands) Revenues Revenues Non-GAAP Operating Earnings Non-GAAP Operating Earnings Pretax Earnings Pretax Earnings Net Income Attributable to Crawford & Company Net Income Attributable to Crawford & Company Diluted Earnings per CRD-A Share Diluted Earni
Slide 48: Crawford & Company
Crawford & Company ®