S&p Global Inc. · NYSE:SPGI
S&p Global — UBS Virtual Financial Services Conference 2020
35 slides from S&p Global's conference presentation, Aug 12, 2020
Slide 1: UBS Virtual Financial Services Conference
UBS Virtual John Berisford President, S&P Global Ratings Financial Services Chip Merritt SVP Investor Relations Conference August 12, 2020 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, including statements about COVID-19 and the scenarios we are using to proj
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: Revenue by business for the past 15 years
Revenue by business for the past 15 years ($ in millions) * Data for 2005–2015 include Capital IQ revenue on the lower bar and SNL revenue on the upper bar ** S&P Dow Jones Indices joint venture was established in June 2012 5
Slide 6: The Company faces significant risks today
The Company faces significant risks today Despite our resilience and financial strength, we are not immune to structural risks arising from COVID-19 which could impact our revenue from issuance, AUM, subscription renewals, and new product sales These risks include: Macro Economic Environment: Bond a
Slide 7: 1H 2020 results by segment
1H 2020 results by segment Adjusted segment operating Revenue: $3,729 million profit: $2,149 million $433 $241 Market $338 Intelligence $1,034 $355 $499 Ratings1 S&P Dow Jones Indices2 $1,216 $1,831 Platts ($ in millions) ($ in millions) Notes: Revenue chart excludes consolidating adjustments 1) Inc
Slide 8: 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 +14% $4,000 $3,729 $3,275 $3,000 $2,000 $1,000 $0 ($ in millions) 2015 2016 2017 2018 2019 1H 2019 1H 2020 8
Slide 9: Adjusted operating profit margin improvement continues
Adjusted operating profit margin improvement continues Adjusted Operating Profit Margin 60% 56.0% 53.6% 50% 48.8% 50.2% 49.4% 46.5% 39.7% 42.4% 40% 30% 20% 10% 0% 2015 2016 2017 2018 2019 1H19 TTM* 1H20 Notes: Beginning in 2016, the Company began excluding deal-related amortization from its non- GAA
Slide 10: 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 +35% $6.89 $6.13 $5.35 $5.00 $4.69 $4.54 $2.50 $0.00 2015 2016 2017 2018 2019 1H2019 1H 2020 Note: Beginning in 2016, the Company began excluding deal-related amortizati
Slide 11: 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 12: 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 repur
Slide 13: Consistent track record of returning cash to shareholders
Consistent track record of returning cash to shareholders RETURNED $9.7 Billion $2,163 SINCE START OF 2015 $1,800 $1,503 $1,422 $1,476 $1,337 Share Repurchases Dividends 2015 2016 2017 2018 2019 1H 2020 ($ in millions) Note: Shares repurchased are reported on a settlement-date basis 13
Slide 14: 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 $3,950 $3,564 $3,569 $3,662 $2,914 $2,791 $2,697 $2,400 $1,976 2016 2017 2018 2019 1H 2020 ($ in millions) Debt Cash, cash equivalents, restricted cash, and short-term investments 14
Slide 15: 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 16: 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 17: 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) 17
Slide 18: 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 19: 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 20: Ratings financial snapshot
Ratings financial snapshot Revenue Adjusted Operating Profit 3-year CAGR: 7% Margin** $3,106 66.4% $2,988 $2,883 63.1% 57.8% $2,535 56.8% 53.6% 56.2% +22% 49.6% $1,831 $1,497 ($ in millions) * 2Q 2019 trailing twelve months ** 2018 and 2019 results reflect the recast for the allocation methodology c
Slide 21: Pull forward in 1H 2020 consistent with recent years
"Pull forward" in 1H 2020 consistent with recent years Global Corporate Debt Maturities ($ in billions) 21
Slide 22: 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 22
Slide 23: 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 23
Slide 24: 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 Noticeable increase 120% in 1Q 2020 100% 80% 36.3% 60% 49.0% 40% 20% 0% Credit market instruments including bonds, commercial paper, and loans, excluding
Slide 25: S&P Dow Jones Indices financial snapshot
S&P Dow Jones Indices financial snapshot Adjusted Operating Revenue Profit Margin** 3-year CAGR: 13% 70.2% $918 69.5% $1,000 66.4% 69.8% 71.2% $837 65.6% 68.3% $800 $728 $638 +10% $600 $499 $452 $400 $200 $0 ($ in millions) * 2Q 2019 trailing twelve months ** 2018 and 2019 results reflect the recast
Slide 26: 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 27: Market Intelligence financial snapshot
Market Intelligence financial snapshot Revenue Adjusted Operating 3-year CAGR: 6% Profit Margin** $1,833 $1,959 32.1% 32.4% $1,661 $1,683 32.1% 31.7% 31.9% 32.6% 29.9% +7% $969 $1,034 ($ in millions) * 2Q 2019 trailing twelve months ** 2018 and 2019 results reflect the recast for the allocation meth
Slide 28: 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 29: 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 3-year CAGR: 6% Profit Margin 52.0% 55.6% 52.4% 54.2% $214 51.4% $844 47.1% $774 $815 41.2% $711 +3% $420 $433 ($ in millions) J. D. Power revenue Platts revenue
Slide 30: 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 31: S&P Global has a growing range of ESG solutions
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 • ESG Scores • ESG indic
Slide 32: 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 33: 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 34: ESG awards & recognition
ESG awards & recognition 3BL 100 NATIONAL ORGANIZATION ON DISABILITY PAL Cy § My United Nations Wes Global Compact Corporate Responsibility Prime rated by ISS-oekom> S&P Global Corporate Responsibility Magazine's XX 30% Club GROWTH THROUGH DIVERSITY ISS QualityScore INSTITUTIONAL SHAREHOLOER service
Slide 35: UBS Virtual Financial Services Conference
UBS Virtual John Berisford President, S&P Global Ratings Financial Services Chip Merritt SVP Investor Relations Conference August 12, 2020 Copyright © 2017 by S&P Global. All rights reserved.
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