Morningstar, Inc. · NASDAQ:MORN
Morningstar — Q4 2021 Earnings Presentation
25 slides from Morningstar's earnings presentation, Feb 25, 2022
Slide 1: Fourth Quarter 2021 Supplemental Presentation
Fourth Quarter 2021 Supplemental Presentation February 24, 2022
Slide 2: Forward-looking statements disclaimer
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations about future events or future fnancial performance. Forward-looking statements by their nature address matters that
Slide 3: 2021 Financial Performance
2021 Financial Performance ($mil) $257.0 $215.2 21 20 $363.4 ＋22.3% ＋19.4% ＋14.7% 21 20 $1,699.3 $1,389.5 21 20 $316.7 $348.1 ＋13.2% 21 20 $307.6 Adjusted operating income excludes intangible amortization expense and all mergers and acquisitions (M&A)-related expenses from operating income. Free cas
Slide 4: Q4 2021 Financial Performance
Q4 2021 Financial Performance ($mil) $ 74.8 $65.1 21 20 $91.2 ＋21.5% ＋14.9% ＋7.8% 21 20 $462.2 $380.4 21 20 $84.6 $105.7 ＋14.1% 21 20 $92.6 Adjusted operating income excludes intangible amortization expense and all mergers and acquisitions (M&A)-related expenses from operating income. Free cash fow
Slide 5: Q4 2021 Revenue Walk
Q4 2021 Revenue Walk *Organic revenue excludes revenue from acquisitions for a period of 12 months upon completion of the acquisition, and the efect of foreign currency translations. 21.5% Reported Revenue Growth Impact of Currency and M&A 21.4% 0.1% Contributors of Organic Revenue Growth License-Ba
Slide 6: Quarterly Revenue Growth Trend
Quarterly Revenue Growth Trend ($mil) Bars represent reported revenue. Percentages represent YOY organic revenue growth, which is a non-GAAP measure.
Slide 7: Q4 2021 Revenue Drivers: License-Based Revenue Growth
Q4 2021 Revenue Drivers: License-Based Revenue Growth ($mil) +18.3% Reported +18.5% Organic 21 20 License-Based Revenue Drivers: PitchBook (50.1%), Sustainalytics (45.1%), and Morningstar Data (12.0%) were the primary contributors to license-based organic revenue growth in Q4 2021. PitchBook had an
Slide 8: License-Based Quarterly Trends: PitchBook
License-Based Quarterly Trends PitchBook ($mil) 47.5% 53.0% 42.9% 40.2% 36.8% 32.6% 33.6% 36.0% 61.8% 61.4% 59.7% 67.5% 53.2% 48.3% 42.5% 38.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% $0.0 $15.0 $30.0 $45.0 $60.0 $75.0 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 PitchBook Revenue YO
Slide 9: License-Based Quarterly Trends: Advisor Workstation, Morningstar Data
License-Based Quarterly Trends Advisor Workstation ($mil) -4.3% -1.7% 3.2% -2.4% -1.3% -1.7% 3.2% 3.9% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Advisor Workstation Revenue YOY Organic Revenue Growth
Slide 10: Q4 2021 Revenue Drivers: Asset-Based Revenue Growth
Q4 2021 Revenue Drivers: Asset-Based Revenue Growth ($mil) Bars represent reported revenue. Organic revenue growth is a non-GAAP measure. Asset-Based Revenue Drivers: Morningstar Indexes (63.5%), Workplace Solutions (16.7%), and Investment Management (8.0%) all contributed to asset-based organic rev
Slide 11: Asset-Based Quarterly Trends: Investment Management
Asset-Based Quarterly Trends: Investment Management ($bil) Investment Management Q4 2021 AUM/A: Investment Management assets increased 11.8% year over year in aggregate, primarily driven by market performance in Morningstar Managed Portfolios. The drop from Q4 2019 to Q1 2020 in Managed Portfolios—N
Slide 12: Asset-Based Quarterly Trends: Workplace Solutions
Asset-Based Quarterly Trends: Workplace Solutions ($bil) Workplace Solutions Q4 2021 AUM/A: Workplace Solutions assets grew 18.1% year over year, driven by market performance and further adoption of Managed Accounts. *Managed Accounts includes Retirement Manager and Advisor Managed Accounts. **Fiduc
Slide 13: Q4 2021 Revenue Drivers: Transaction-Based Revenue Growth
Q4 2021 Revenue Drivers: Transaction-Based Revenue Growth ($mil) Bars represent reported revenue. Organic revenue growth is a non-GAAP measure. Transaction-Based Revenue Drivers: DBRS Morningstar’s 39.7% organic revenue growth stemmed primarily from robust commercial mortgage-backed securities issua
Slide 14: DBRS Morningstar Revenue Growth by Geography
Quarterly Transaction-Based Trends: DBRS Morningstar Revenue Growth by Geography ($mil) DBRS Morningstar Q4 2021 Revenue Drivers: DBRS Morningstar experienced strong growth in the U.S. and EMEA in constant currency terms. Revenue grew 6.4% in EMEA on strong RMBS issuance. Revenue declined 0.9% in Ca
Slide 15: DBRS Morningstar Revenue by Asset Class
Quarterly Transaction-Based Trends: DBRS Morningstar Revenue by Asset Class ($mil) DBRS Morningstar Q4 2021 Revenue Drivers: Category mix in Q4 2021 was 69% Structured Finance vs. 31% Fundamental Ratings. Momentum in Canadian corporate debt issuance slowed in Q4 2021 following record levels in 2020.
Slide 16: Q4 2021 Operating Margins
Q4 2021 Operating Margins Adjusted Operating Margin Operating Margin 21 20 ＋16.2% ＋19.8% 21 20 Adjusted operating margin is a non-GAAP fnancial measure. ＋17.1% ＋22.3% Operating Margin Drivers: Key contributors to operating expense growth included compensation, commission expense, and professional fe
Slide 17: Quarterly Operating Margin Trends
Quarterly Operating Margin Trends Adjusted operating margin is a non-GAAP fnancial measure.
Slide 18: YOY Cash Flow Comparison and Capital Allocation
YOY Cash Flow Comparison and Capital Allocation ($mil) ($mil) Capital Expenditures 101.8 Debt Repayment, Net 90.0 Dividends Paid 54.2 Equity Method Investments 29.8 M&A 24.8 Share Repurchases 1.3 21 20 $449.9 Operating Cash Flow Free Cash Flow Capital Allocation 21 20 $384.3 $348.1 $307.6
Slide 19: Appendix
Appendix
Slide 20: Reconciliation from Reported to Organic Revenue Growth
Reconciliation from Reported to Organic Revenue Growth
Slide 21: Reconciliation from Reported to Organic Revenue Growth
Reconciliation from Reported to Organic Revenue Growth
Slide 22: Reconciliation from Reported to Organic Revenue Growth: DBRS Morningstar EMEA and Canada
Reconciliation from Reported to Organic Revenue Growth DBRS Morningstar EMEA DBRS Morningstar Canada
Slide 23: Reconciliation from Operating to Adjusted Operating Margin
Reconciliation from Operating to Adjusted Operating Margin
Slide 24: Reconciliation from Cash Provided by Operating Activities to Free Cash Flow
Reconciliation from Cash Provided by Operating Activities to Free Cash Flow Q4 2021 Q4 2020 135.9 -30.2 105.7 114.6 -22.0 92.6 18.6% 37.3% 14.1% change (in millions) Cash provided by operating activities Capital expenditures Free cash fow
Slide 25: Morningstar
MORNINGSTAR