Clarivate Plc · NYSE:CLVT
Clarivate — Clarivate Analytics — Investor Presentation (September 2019)
34 slides from Clarivate's investor presentation, September 2019
Slide 1: Investor Presentation September 2019
NYSE: CCC Investor Presentation September 2019
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements The accompanying materials contain certain forward-looking statements regarding Clarivate Analytics Plc (the “Company” or “Clarivate”), its financial condition and its results of operations, anticipated synergies and other future expectations. Forward-looking statements sh
Slide 3: Key management presenters
Key management presenters Jerre Stead Richard Hanks Executive Chairman & Chief Financial Officer Chief Executive Officer |3
Slide 4: Summary investment highlights
Summary investment highlights 1 • Collection of high quality assets embedded in customer workflows • Highly recurring subscription revenue model and high retention rates 2 and subscription revenue mix 3 • Tailwinds in information services sector • Business model enables cycle of profitable growth an
Slide 5: Business overview
Business overview Business highlights • Leading global provider of comprehensive intellectual property and scientific information, analytical tools and services • Products support the critical decisions made by universities, businesses, governments and law firms in the discovery, protection and comm
Slide 6: Clarivate's purpose, vision, mission and values
Clarivate’s purpose, vision, mission and values Our purpose Our vision Our mission We believe human ingenuity can We will improve the way the world We are a trusted, indispensable transform the world and improve our creates, protects and advances partner to innovators everywhere by future. innovatio
Slide 7: Powerful assets vital to broad customer base
Powerful assets vital to broad customer base Science Group Intellectual Property Group (56% of LTM(1) Revenue) (44% of LTM(1) Revenue) Web of Science Cortellis Derwent CompuMark MarkMonitor Used to navigate Used by life sciences Used to search and Used to monitor Used to register and Product scienti
Slide 8: High quality products embedded with customer workflows
High quality products embedded with customer workflows A professor planning a research program accesses Web of Science (“WOS”) to evaluate the current state of research in her discipline, identifying trends within highly regarded and relevant academic journals A university provost evaluating her uni
Slide 9: Proving our value to customers
Proving our value to customers 2019 Customer Delight Survey(1) 2019 Customer Delight Scorecard • In order to better understand our Overall customer score 76 customers, Clarivate commissioned a customer delight survey conducted by a Information and insights 87 leading consulting firm Quality of produ
Slide 10: Tailwinds in information services sector
Tailwinds in information services sector Large and growing predictive analytics and data market(1) (2018E-2021E predictive analytics and data market revenue; $ in B) $219 $195 $174 $155 2018E 2019E 2020E 2021E Significant move up the value chain with smart Real Time data offerings High Risk Customiz
Slide 11: Business model enables cycle of profitable growth and reinvestment capacity
Business model enables cycle of profitable growth and reinvestment capacity Predictable and resilient recurring revenue streams through subscriptions with high renewal rates Recurring → 82% subscription revenue in 2018 sales model → 90%+ annual revenue renewal rates in 2018 (1) = investment + profit
Slide 12: Strong operating leverage and margin expansion opportunity
Strong operating leverage and margin expansion opportunity Core operating leverage plus synergies drive incrementally higher margin expansion while also allowing for investment. Estimated adjusted EBITDA margin expansion Favorable expense profile with sensitivity (bps)(1) potential upside • Low cost
Slide 13: Foundation set for attractive growth
Foundation set for attractive growth • Invested in best-in-class, cloud-based platforms for operational and business Powerful standalone workflow backbone platform post-separation • Built out independent operating functions including Accounting, Treasury, HR, Payroll and Technology Implementing • Op
Slide 14: Management quickly executing with proven playbook
Management quickly executing with proven playbook Proven playbook with multiple levers First progress report Accelerate revenue growth (Q2 2019 Earnings) 1 Q2 Revenue growth (0.4%) (1) Product and pricing enhancement strategies 2 Adjusted revenue growth (at constant currency) Increased pipeline of n
Slide 15: Recent progress on other initiatives
Recent progress on other initiatives Buyout of the Tax Receivable Agreement • Entered into an agreement to pay $200 million to terminate the Tax Receivable Agreement (“TRA”), previously established with the shareholders prior to our initial listing on the NYSE, including Onex and BPEA • Settling the
Slide 16: Financial highlights
Financial highlights (> Clarivate | ;, Analytics
Slide 17: Financial characteristics
Financial characteristics • Compelling strategies to drive continued Adjusted Revenue ($ in millions) profitable growth $935 $951 • Scalable business model with significant $181 $175 operational leverage • High level of subscription revenue providing a resilient business model $754 $776 • Strong vis
Slide 18: Q2 2019 performance highlights
Q2 2019 performance highlights Q2 2019 earnings highlights Adjusted revenue by product group ($ in millions) +1.7% Actual Rates • Adjusted Revenue(1) growth of 2.5% YoY on a constant +2.5% Constant Currency currency basis $238 $242 % YoY Growth ‒ Science Group Revenue growth of 3.3% YoY on a +0.4% c
Slide 19: YTD 2019 performance highlights
YTD 2019 performance highlights YTD 2019 earnings highlights Adjusted revenue by product group ($ in millions) • Adjusted Revenue(1) growth of 2.4% YoY on +1.4% Actual Rates +2.4% Constant Currency a constant currency basis % YoY Growth $470 $477 -0.2% Actual Rates ‒ Science Group revenue growth of
Slide 20: High levels of contracted revenue
High levels of contracted revenue Historical annualized contract value (ACV)(1) ($ in millions) $782.6 +$27.5mm YoY $767.0 +3.6% constant $764.1 FX $759.4 $755.1 $731.2 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 (1) Annual Contract Value (“ACV”) is the annualized value for a 12-month period following
Slide 21: Clarivate transformation: the next phase
Clarivate transformation: the next phase Clarivate has the potential to achieve margin expansion and significantly reinvigorate revenue growth 1 Decreasing costs by simplifying organization structures and rationalizing G&A functions to enhance customer-centric focus 2 Using artificial intelligence a
Slide 22: Summary investment highlights
Summary investment highlights 1 • Collection of high quality assets embedded in customer workflows • Highly recurring subscription revenue model and high retention rates 2 and subscription revenue mix 3 • Tailwinds in information services sector • Business model enables cycle of profitable growth an
Slide 23: Appendix
Appendix (> Clarivate | 5; Analytics
Slide 24: Exceptional leadership team
Exceptional leadership team • Preeminent business operator IHS share price performance under Jerre Stead’s leadership(1) with demonstrated success in (Indexed Total Shareholder Return; Nov. ’05 IPO – ’17FYE) shareholder value creation • Previously served as Chairman and CEO at IHS, IHS-Markit(1), Ho
Slide 25: Product example: Web of Science
Product example: Web of Science Web of Science • 150mm records(1) • 1B+ citations(1) • 2.0mm+ unique monthly visitors(1) • 34,000+ journals • 3.5mm peer review indexed(1) records(1) Industry-leading data and analytics platform High stakes use cases • Objective, independent, balanced selection • Rese
Slide 26: Product example: Cortellis
Product example: Cortellis Life Sciences firms turn to Cortellis Clarivate for offerings across our portfolio – beyond just Cortellis Competitive Intelligence Clinical Trials Intelligence Regulatory Intelligence • Leading drug pipeline database • Broadest source of clinical trials • Most comprehensi
Slide 27: Product example: Derwent Innovation
Product example: Derwent Innovation Derwent Innovation • Ranked #1 comprehensive • Over 80mm patent publications patent research and analysis from 50 patent offices, which solution by Outsell represent 98% of all patents published globally(1) • Sold globally into over 50 countries(1) Search Propriet
Slide 28: Presentation of certain non-GAAP financial measures
Presentation of certain non-GAAP financial measures Adjusted Revenue, Standalone Adjusted EBITDA, and Standalone Adjusted EBITDA Margin, as presented, are examples of supplemental non-GAAP measures of Clarivate’s performance. Adjusted Revenue normalizes for the impact of purchase accounting adjustme
Slide 29: Presentation of certain non-GAAP financial measures (cont'd)
Presentation of certain non-GAAP financial measures (cont’d) We also monitor Standalone Adjusted EBITDA because Clarivate’s credit agreement governing its credit facilities and its indenture governing its senior unsecured notes contain certain covenants (including debt incurrence and the making of r
Slide 30: Reconciliation of non-GAAP financial measures and required reported data
Reconciliation of non-GAAP financial measures and required reported data Reconciliation Descriptions ($ in millions) Year Ended December 31 Adjusted EBITDA Adjustments 2017 2018 1. Deferred revenue fair value accounting adjustment arising from purchase price allocation in connection with the carve-o
Slide 31: Reconciliation of non-GAAP financial measures and required reported data
Reconciliation of non-GAAP financial measures and required reported data Reconciliation Descriptions ($ in millions) Three Months Ended June 30 Adjusted EBITDA Adjustments 2019 2018 LTM 2019 1. Deferred revenue fair value accounting adjustment arising from purchase price allocation in connection wit
Slide 32: Reconciliation of non-GAAP financial measures and required reported data
Reconciliation of non-GAAP financial measures and required reported data Reconciliation Descriptions ($ in millions) Six Months Ended June 30 Adjusted EBITDA Adjustments 2019 2018 LTM 2019 1. Deferred revenue fair value accounting adjustment arising from purchase price allocation in connection with
Slide 33: Historical quarterly financial summary
Historical quarterly financial summary ($ in millions) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Science Group $125.9 $132.5 $131.8 $137.9 $129.1 $136.1 Intellectual Property Group $105.9 $105.9 $103.9 $107.6 $105.1 $106.3 Adjusted Revenue(1) $231.8 $238.4 $235.7 $245.5 $234.2 $242.4 IPM Produ
Slide 34: Diluted share count
Diluted share count Stock Price at Enterprise Value Build 8/28/2019 @$18 @$19 @$20 Comments Note: the analysis is not intended to replace the Treasury Stock Method as required under ASC 260, (As of August 28, 2019, $ in millions except Earnings per Share per share values) 1. Inconsistent with the re
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