S&p Global Inc. · NYSE:SPGI
S&p Global — Raymond James 41st Annual Institutional Investors Conference 2020
34 slides from S&p Global's conference presentation, Mar 2, 2020
Slide 1: Raymond James 41st Annual Institutional Investors Conference
Raymond James Doug Peterson President and CEO 41st Annual Chip Merritt SVP Investor Relations Institutional March 2-3, 2020 Investors Conference Copyright © 2017 by S&P Global. All rights reserved.
Slide 2: Comparison of adjusted information to U.S. GAAP information
Comparison of adjusted information to U.S. GAAP information This presentation includes adjusted financial measures that are derived from the Company’s continuing operations. This non-GAAP information is provided in order to allow investors to make meaningful comparisons of the Company’s operating pe
Slide 3: 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 statements,” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future events, trends,
Slide 4: Data into insights. Essential intelligence for an ever-changing world.
Data into insights. Essential intelligence for an ever-changing world. We provide data & analytics, research & commentary, benchmarks, credit ratings and ESG solutions through the collective strength of our divisions. 4
Slide 5: 2019 results by segment
2019 results by segment Adjusted segment operating Revenue: $6,699 million profit: $3,505 million $844 $424 Market Intelligence $1,959 $670 $918 $635 Ratings1 S&P Dow Jones Indices2 $1,776 $3,106 Platts ($ in millions) ($ in millions) Notes: Revenue chart excludes consolidating adjustments 1) Includ
Slide 6: Consistent revenue growth
Consistent revenue growth Revenue 4-year CAGR: 6% $7,000 $6,699 $6,063 $6,258 $6,000 $5,661 $5,313 $5,000 $4,000 $3,000 $2,000 $1,000 $0 ($ in millions) 2015 2016 2017 2018 2019 6
Slide 7: Adjusted operating profit margin improvement continues
Adjusted operating profit margin improvement continues Adjusted Operating Profit Margin 60% 48.8% 50.2% 50% 46.5% 39.7% 42.4% 40% 30% 20% 10% 0% 2015 2016 2017 2018 2019 Notes: Beginning in 2016, the Company began excluding deal-related amortization from its non- GAAP results. The excluded figures w
Slide 8: Adjusted diluted earnings per share growth continues
Adjusted diluted earnings per share growth continues Adjusted Diluted Earnings Per Share 4-year CAGR: 19% $10.00 $9.53 $8.50 $7.50 $6.89 $5.35 $5.00 $4.69 $2.50 $0.00 2015 2016 2017 2018 2019 Note: Beginning in 2016, the Company began excluding deal-related amortization from its non- GAAP results. T
Slide 9: Secular market trends position S&P Global for sustained long-term growth
Secular market trends position S&P Global for sustained long-term growth Total corporate debt outstanding continues China capital markets reform to grow over time Investors searching for Assets continue to shift to unique data with ubiquitous index-related investments delivery ESG investing Trade fl
Slide 10: Well on track to meet ~$100 million, 3-year cost reduction program
Well on track to meet ~$100 million, 3-year cost reduction program Target annual run‐rate savings 2018 to 2020 Run‐rate savings achieved in first year Productivity improvements across support functions $45‐55M and real estate $85M achieved Productivity improvements in technology & digital $55‐60M $6
Slide 11: Our capital management philosophy
Our capital management philosophy Continued Prudent & Dividend Growth ≥ 75 % Flexible Balance Sheet FCF1 Return to Steady Growth Shareholders Financial Health – Continue our 47-year – Return capital to – Committed to track record of steady shareholders via share investment-grade annual dividend repu
Slide 12: Consistent track record of returning cash to shareholders
Consistent track record of returning cash to shareholders RETURNED $8.2 Billion $2,163 SINCE START OF 2015 $1,800 $1,503 $1,422 $1,337 Share Repurchases Dividends 2015 2016 2017 2018 2019 ($ in millions) Note: Shares repurchased are reported on a settlement-date basis 12
Slide 13: 2020 areas of focus
2020 areas of focus • Bring additional transparency and independent analytics to Chinese capital markets with Ratings and Market Intelligence Global • Expand Platts and Ratings capabilities in Asia • Continue MI platform development & client migration • Enable Ratings content distribution Customer O
Slide 14: 2020 areas of focus
2020 areas of focus • Complete cloud-first strategy • Implement numerous Kensho projects including the launch of Technology OmniSearch on the MI desktop • Utilize technology to improve our customers’ experience • Expand data ingestion, linking and processing success Operational • Continue to leverag
Slide 15: A growing ecosystem: recent investments in fintech and unique data sets
A growing ecosystem: recent investments in fintech and unique data sets To scale exposure to emerging technologies, S&P Global is a limited partner in two fintech-focused-funds: Green Visor (San Francisco) and Arbor (Hong Kong and Israel) 15
Slide 16: Kensho capabilities embedded throughout the Company with a robust pipeline of projects
Kensho capabilities embedded throughout the Company with a robust pipeline of projects Automation Reduced Time Enhanced to Market Capabilities ▪ Omnisearch – Access data on Market Intelligence platform via search and topical machine-learning ▪ Entity linking – Reduces cost and time to acquire, maint
Slide 17: In 2019, S&P Global officially launched its domestic credit-rating business in China
In 2019, S&P Global officially launched its domestic credit-rating business in China • First approval for a company wholly owned by an international CRA to rate domestic Chinese bonds • Authorized to rate issuers and issuances from: – Financial institutions – Corporates – Structured finance bonds –
Slide 18: Balance sheet strength available for investments and return of capital
Balance sheet strength available for investments and return of capital Period-end debt and cash position $3,948 $3,611 $3,564 $3,569 $3,662 $2,914 $2,791 $2,400 $1,976 $1,487 2015 2016 2017 2018 2019 ($ in millions) Debt Cash, cash equivalents, restricted cash, and short-term investments 18
Slide 19: Ratings financial snapshot
Ratings financial snapshot Revenue Adjusted Operating Profit 4-year CAGR: 6% Margin $3,106 56.0% 57.2% $2,988 $2,883 53.6% 49.6% $2,428 $2,535 47.2% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 ($ in millions) 19
Slide 20: Global ratings by S&P Global Ratings reflect full breadth of ratings spectrum
Global ratings by S&P Global Ratings reflect full breadth of ratings spectrum Bond Ratings (Global Corporates) 2,500 2,081 Number of Issuers 2,000 1,859 1,500 1,413 1,317 1,000 2Q 500 322 216 1Q 8 0 AAA AA A BBB BB B CCC/C Outstanding Ratings as of 8/31/2019 20
Slide 21: Ratings help investors gauge the risk of default
Ratings help investors gauge the risk of default Global Corporates Cumulative Default Rates, 1981 - 2018 2Q 1Q 1Q Source: S&P Global Ratings, “Default, Transition, and Recovery: 2018 Annual Global Corporate Default Study and Rating Transitions,” April 9, 2019, Chart 4 21
Slide 22: S&P Global Ratings: Revenue 2000–2019
S&P Global Ratings: Revenue 2000–2019 Financial crisis had modest impact on Corporate & Government revenue $3,000 $2,500 CRISIL, Other* $2,000 $1,500 Structured $1,000 Corporates, $500 2008 7% decline in Corporates, Financials & Financials & Government revenue Government $0 (Revenue, $ in millions)
Slide 23: U.S. corporate debt as a share of U.S. GDP
U.S. corporate debt as a share of U.S. GDP (nominal) Financial Corporate Debt (Ex GSE) / U.S. GDP Non-Financial Corporate Debt (Ex GSE) / U.S. GDP 120% 100% 80% 60% 40% 20% 0% Credit market instruments including bonds, commercial paper, and loans, excluding agency and GSE-backed securities from fina
Slide 24: S&P Dow Jones Indices financial snapshot
S&P Dow Jones Indices financial snapshot Adjusted Operating Revenue Profit Margin 4-year CAGR: 11% $1,000 $918 $837 66.5% 65.6% 66.4% 68.0% 69.2% $800 $728 $638 $600 $597 $400 $200 $0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 ($ in millions) 24
Slide 25: S&P Dow Jones Indices revenue mix
S&P Dow Jones Indices revenue mix At the forefront of AREAS OF FOCUS: passive investing Continue index innovation (e.g. factors, smart beta, ESG) Data & Custom Expand local presence Subscriptions in emerging markets Asset-Linked Increase global indices Exchange- Fees 2019 awareness Traded Derivative
Slide 26: Market Intelligence financial snapshot
Market Intelligence financial snapshot Revenue Adjusted Operating 4-year CAGR: 9% Profit Margin $1,833 $1,959 34.1% 34.2% $1,661 $1,683 32.1% 29.9% $1,405 23.9% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 ($ in millions) 26
Slide 27: S&P Global Market Intelligence
S&P Global Market Intelligence AREAS OF FOCUS: Desktop Release production version of new Market Intelligence platform Data Management Solutions Transition Capital IQ users to the new platform Credit Risk Solutions Continue to add unique content and analytical tools RECENTLY ACQUIRED: 451 Research –
Slide 28: S&P Global Platts financial snapshot
S&P Global Platts financial snapshot (Comparisons impacted by the sale of J.D. Power in September 2016) Revenue Adjusted Operating Platts 4-year CAGR: 7% Profit Margin 50.2% $316 47.1% 49.1% $214 41.2% $815 $844 38.4% $774 $711 $655 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 ($ in millions) J
Slide 29: S&P Global Platts
S&P Global Platts Revenue generated from subscriptions and licensing for derivative trading AREAS OF FOCUS: Thousands of daily price Create world-class capability in assessments trade flow analytics Comprehensive coverage Pursue unique benchmarks in new across commodity markets regions and markets D
Slide 30: S&P Global has a growing range of ESG solutions linked to a centralized production of content
S&P Global has a growing range of ESG solutions linked to a centralized production of content ESG Solutions Ratings Market Intelligence Indices Platts Fixed Income, Equity, Any Entity Corporates, Equity, Fixed Income Equity & Fixed Income Passive Corporates • ESG Evaluations • Corp Environmental & •
Slide 31: ESG performance highlights
ESG performance highlights We see ESG as an essential component of sustainable company performance Environmental Social Governance Commitment to sustainable supply Ensuring a diverse & inclusive All directors (other than the CEO) chain through strong Vendor Code culture is set from the top through a
Slide 32: Key governance highlights
Key governance highlights Accountability Board Independence & Compensation & Risk Refreshment Management Annual elections for directors Independent Chairman of the Equity Ownership Board Requirements for directors and executive officers Majority voting in uncontested All directors except our CEO are
Slide 33: ESG awards & recognition
ESG awards & recognition 3BL Corporate Responsibility Magazine's CEO/ACTION| FOR MOTHER pale DIVERSITY & INCLUSION 100 aay BEST ea i mone ES S D 30% Club COMPANIES 2017 GROWTH THROUGH DIVER Uv Dave Thomas Foundation for Adoption. NATIONAL ORGANIZATION ON mg x, Stonew: all DISABILITY DISABILITY ISS Q
Slide 34: Raymond James 41st Annual Institutional Investors Conference
Raymond James Doug Peterson President and CEO 41st Annual Chip Merritt SVP Investor Relations Institutional March 2-3, 2020 Investors Conference Copyright © 2017 by S&P Global. All rights reserved.
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