Crawford & Company · NYSE:CRD.A
Crawford & — William Blair Baltimore conference 2013
31 slides from Crawford &'s conference presentation, Aug 26, 2013
Slide 1: Crawford & Company
Exhibit 99.1 Crawford & Company William Blair / Baltimore August 26, 2013
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 future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quant
Slide 3: Crawford & Company at a Glance
Crawford & Company at a Glance at August 8, 2013 Exchange/Tickers: NYSE: CRDA and CRDB Trailing52 weekHigh/Low: CRDA: $3.70-$6.89 CRDB: $3.66-$8.60 MarketCapitalization (8/8/13): $387.5 million AnnualDividend/Yield (8/8/13): CRDA: $0.20 or 3.0% CRDB: $0.16 or 2.1% AnalystCoverage: Adam Klauber, Will
Slide 4: A Business Services Leader since 1941
A Business Services Leader since 1941 The world’s largest independent provider of global claims management solutions Multiple globally recognized brand names: Crawford, Broadspire, GCG Clients include multinational insurance carriers, brokers and local insurance firms as well as 200 of the Fortune 5
Slide 5: Our Global Strength
OUR GLOBAL STRENGTH $1.2 Billion Revenue Company 70+ Countries 700 Locations 8,500 Employees Crawford & Company 5
Slide 6: Diversified Business and Clients
Diversified Business and Clients 2012 Revenues of approximately $1.2 Billion Broadspire EMEA/AP • Workers’ Compensation and Liability Claims Administration • Medical and Case Management 20.3% 31.2% • Property and Casualty Services • Long-Term Care Services • Global Technical • Integrated Disability
Slide 7: Catalysts/Drivers
Catalysts/Drivers Cyclical Positive Industry Claim Trends: Increased underwriting pressure creates a positive claim trend. Weather/Catastrophe Trends: Catastrophic events worldwide are increasing in severity and frequency. Crawford is uniquely positioned to serve these markets. Healthcare Reform: In
Slide 8: Crawford Provides More Than Claims Services
Crawford Provides More Than Claims Services P&C outsourced claims services provided about $575 million, or 49%, of total Crawford revenue in 2012 • Claims services is a mature business in most geographies • Revenues are driven by claims volume, which is affected by regional economies, economic growt
Slide 9: Crawford's Expertise
Crawford’s Expertise Claims Services: Thai Flooding Catastrophe Response Business Process Outsourcing: Deepwater Horizon Consulting: Medical Management
Slide 10: Catastrophe Response: Thai Flooding
Catastrophe Response: Thai Flooding Top ten historic insurance loss Crawford handling losses in excess of $4 billion Flooding affected an area the size of South Carolina Leveraged global capabilities through deployment of 160 staff including 50 support staff and 35 senior adjusters from other locati
Slide 11: Global Natural Catastrophe Update
Global Natural Catastrophe Update Naturalcatastrophes worldwide1980– 2012 Natural catastrophes per year more than doubled over period Crawford is uniquely positioned to respond on a global basis Number of Events 1 200 1 000 800 600 400 200 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Slide 12: High-Volume Claims Services: Deepwater Horizon
High-Volume Claims Services: Deepwater Horizon The Garden City Group (GCG) is the recognized leader in legal administration services for class action settlements and other claims administration, bankruptcy cases and legal noticing programs. Largest program is the combined GCCF/Deepwater Horizon sett
Slide 13: Garden City Group Ranks First Among Claims Administrators
Garden City Group Ranks First Among Claims Administrators Cases Handled: 100 Total Amount Settled: $50.5 billion BMC Group (4), $1.9 Others (21), $3.3 Rust Consulting (9), $3.8 Heffler Radetich & Garden City Group Saitta (7), $4.7 (37), $21.3 Gilardi & Co. (22), $15.5 Source: Securities Class Action
Slide 14: Consulting: Medical Management
Consulting: Medical Management Medical costs are currently 60% of workers compensation cost and are estimated to be over 70% by 2016, increasing the importance of effective medical cost containment. Case managers proactively manage medical treatment in the rehabilitation process, enabling our client
Slide 15: Financial Review and Operational Focus
Financial Review and Operational Focus
Slide 16: 2012 Business Summary
2012 Business Summary Record revenues of $1.177 billion Record consolidated operating earnings of $110.2 million Record operating cash flow of $92.9 million Including special payment, dividends of $0.20 per CRDA and per$0.16 CRDB Crawford & Company 16
Slide 17: Year to Date 2013 Business Summary
Year to Date 2013 Business Summary Revenues increased 4% to $585.2 million Consolidated operating earnings increased 26% to $48.4 million Improvement in Broadspire and Americas operating results Net income increased 62% to $26.7 million Diluted earnings per share of $0.49 for CRDA and $0.47 for CRDB
Slide 18: Year To Date 2013 Financials
Year To Date 2013 Financials Crawford & Company Income Statement Highlights Unaudited ($ in thousands, except per share amounts) Six months ended June 30, 2013 2012 % Change Revenues: $585,228 $561,600 4% Cost of Services Before Reimbursements 425,674 412,522 3% Selling, General, and Administrative
Slide 19: 2013 Operational Focus
2013 Operational Focus Sustain Operating Performance through Improved Profitability Americas improvement in U.S. Property & Casualty and Canada Continued progress in Broadspire EMEA/AP improvement in the United Kingdom Strengthen the Balance Sheet Manage debt levels and pension obligations Drive ope
Slide 20: 2013 Guidance
2013 Guidance On August 5, 2013, Crawford & Company affirmed and increased certain aspects of its full year 2013 guidance as follows: Consolidated revenues before reimbursements between $1.12 and $1.14 billion Consolidated operating earnings between $95.0 and $99.0 million Consolidated cash provided
Slide 21: Enhanced Return to Shareholders
Enhanced Return to Shareholders Dividends and Buyback: After the 2013 second quarter, Crawford declared a regular quarterly dividend of $0.05 on CRDA and $0.04 on CRDB, an increase of $0.01 per share Including a $0.06 per share special dividend, during 2012, Crawford paid dividends of $0.20 per shar
Slide 22: Crawford Capital Structure
Crawford Capital Structure Improving Balance Sheet Supports Return to Consolidated Debt/Cash ($ in millions) Shareholders $250 Debt reduced by $62 million, or 25% since 2010 $200 through 2012 $150 $100 Pension risk management program driving positive $50 results $0 2008 2009 2010 2011 2012 Material
Slide 23: Crawford Dynamic Investment Policy Glide Path
Crawford Dynamic Investment Policy Glide Path Road Map Desired 6/30/13 100% Return Plan Status Return Plan Status 90% Return Return Seeking Frozen Seeking Return Return Return Return Seeking Seeking 10% De-risk & Maintain 80% Seeking Seeking Seeking Seeking 18% 34% 26% 40% 40% 40% 40% Funded Status
Slide 24: Management Alignment with Shareholders
Management Alignment with Shareholders Balanced short and long term system focused on strategic priorities and aligned with shareholders Short-Term Incentive Compensation Plan Matrix: Stock Ownership Guidelines: Multiple of Metric: Weight: Officer: Base Salary: Revenues 30% President/CEO 3x Operatin
Slide 25: Capital Structure and Governance
Capital Structure and Governance Class A and B Shares: As of July 31, 2013, there were approximately 30.1 million shares of Class A Common Stock and24.7 millionsharesof ClassBCommonStockoutstanding. Thetwo classesare substantially identical, except with respect to the voting rights of the Class B sh
Slide 26: Crawford Is Positioned for Strong Returns
CRAWFORD IS POSITIONED FOR STRONG RETURNS Global Footprint Innovative Technology Platforms World’s largest independent provider of claims management solutions Analytics Diverse customer base Risk Tech Global catastrophe response Risk Sciences Group/Dmitri Claims Management System (CMS) Command Cente
Slide 27: Appendix
Crawford Crawford & Company Appendix
Slide 28: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily compara
Slide 29: Non-GAAP Financial Information
Non-GAAP Financial Information Reconciliation of Non-GAAP Items Unaudited ($ in thousands) YTD through YTD through 2008 2009 2010 2011 2012 June 30, 2013 June 30, 2012 Revenues Before Reimbursements Total Revenues $1,135,916 $1,046,202 $1,110,801 $1,211,362 $1,266,138 $ 633,254 $ 606,362 Reimburseme
Slide 30: Non-GAAP Financial Information, continued
Non-GAAP Financial Information, continued Reconciliation of Non-GAAP Items Unaudited ($ in thousands) December 31, 2012 Net Debt Short-term borrowings $ 13,275 Current installments of long-term debt and capital leases 838 Long-term debt and capital leases, less current installments 152,293 Total deb
Slide 31: Crawford & Company
Crawford Crawford & Company