Clarivate Plc · NYSE:CLVT
Clarivate — Investor Day (March 2023)
92 slides from Clarivate's investor day presentation, Mar 9, 2023
Slide 1: Investor Day
(S Clarivate” Investor Day March 9, 2023 CLVT LISTED NYSE
Slide 2: Opening Remarks
Opening Remarks Mark Donohue VP Investor Relations 2
Slide 3: Safe Harbor Statement and Non-GAAP Financial Measures
Safe Harbor Statement and Non-GAAP Financial Measures Forward-Looking Statements This communication 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 business, events,
Slide 4: Agenda
Agenda 01. Our DNA Jonathan Gear Chief Executive Officer 02. Our Investment Thesis 03. Our Core Competencies 04. Our Operating Model 05. Our Segments Gordon Samson Chief Product Officer Academia & Government Panelists Life Sciences & Healthcare Intellectual Property 06. Our Strategy Jonathan Gear Ch
Slide 5: Life Sciences & Healthcare Video
Life Sciences & Healthcare Video 5
Slide 6: Jonathan Gear, Chief Executive Officer
Jonathan Gear Chief Executive Officer 6
Slide 7: Key takeaways from today's investor day presentation
Key takeaways from today’s investor day presentation 1 2 3 4 Providing indispensable, Leveraging scale created Operating the business Positioning to unlock mission-critical solutions by interconnected end differently to accelerate significant value for to our customers markets organic growth shareho
Slide 8: Undergoing operating transformation to prioritize reinvestment in product innovation
Undergoing operating transformation that will prioritize reinvestment in product innovation to accelerate growth NYSE Listing to Fall 2022 Last Six Months Next Three Years • Acquired businesses to build scale • Transitioning leadership team • Invest in product innovation to drive and end-to-end capa
Slide 9: Our DNA
01 Our DNA 1 Clarivate”
Slide 10: We are connected by a shared purpose, vision, mission and values
We are connected by a shared purpose, vision, mission and values Purpose Values Why we exist What’s important to us To elevate the ideas that will benefit We aim for greatness everyday life We challenge the status quo, pursuing continuous performance improvements and aiming for greatness Vision and
Slide 11: Committed to sustainability, diversity, equity, and inclusion
We are committed to sustainability, diversity, equity, and inclusion Impacting outcomes in partnership with our customers Promoting diversity and inclusion throughout our organization Patients supported through chronic Initiated Council for Inclusion and Diversity 80M+ diseases by improving understa
Slide 12: Global thought leaders across the innovation ecosystem
We are global thought leaders across the innovation ecosystem with 11,000+ colleagues in 40+ countries Identifying cutting edge innovation 3K+ Americas 3K+ EMEA Citation Laureates™ Identifying potential Nobel Prize winners of tomorrow 5K+ APAC Drugs to Watch™ Predicting blockbuster drugs which will
Slide 13: Our Investment Thesis
02 Our Investment Thesis 1 Clarivate”
Slide 14: Best of both worlds information services portfolio
Best of both worlds information services portfolio We serve three adjacent innovation-based industries that are driven by ever-increasing demand for insights Horizontal Info Services Vertical Info Services Companies Companies • Serve numerous industry • Serve one primary industry verticals vertical
Slide 15: Multiple reinforcing dynamics present a compelling growth opportunity
Multiple reinforcing dynamics combine, presenting a compelling opportunity to drive profitable and sustainable growth Secular Growth Markets Economically Insulated Mission Critical Solutions •Robust x Business Model Recurring information Our markets are Resilient markets which Industry gold standard
Slide 16: Secular Growth Markets
Secular Growth Markets | Our markets are expanding, driven by innovation with long runway for growth Academia & Government ~4%¹ Life Sciences & Healthcare ~10%¹ Intellectual Property ~6%¹ Growing research funding & Accelerating HC data proliferation Increasing increasingly multi-disciplinary fields
Slide 17: Economically Insulated
Economically Insulated | Resilient markets which have outperformed in periods of economic downturn Academia & Government ~48%¹ | Life Sciences & Healthcare ~17%¹ | Intellectual Property ~35%¹ Scientific & Technical US Pharmaceutical Global Patent GLOBAL GDP Journal Articles R&D Expenditure Grants Ba
Slide 18: Mission Critical Solutions
Mission Critical Solutions | Industry gold standard solutions embedded in customer workflows Academia & Government Life Sciences & Healthcare Intellectual Property ProQuest One™ Web of Alma™ Cortellis™ Dialog™ HDS Derwent™ CompuMark™ IPfolio™ Academic Science™ citations in world’s largest longitudin
Slide 19: Robust Business Model
Robust Business Model | Recurring information services compounder poised to accelerate organic growth and financial returns ~80% >90% recurring revenue¹ renewal rates ~50% >40% FCF conversion profit margin² 1 Includes subscription and re-occurring revenue types. ² Adj. EBITDA. 19
Slide 20: Our Core Competencies
03 Our Core Competencies 1 Clarivate”
Slide 21: Built with four transformational acquisitions
Clarivate was built with four transformational acquisitions extending customer value across our core markets SCIENTIFIC Academia & Government Academia & Government Life Sciences & Healthcare Life Sciences & Healthcare Intellectual Property Intellectual Property 2016 2020 2020 2021 Acquired foundatio
Slide 22: An indispensable partner, deeply entrenched
Countries in which customers benefit from ~150+ our data, software and expert insight Of the world’s top 400 universities use our An indispensable ~99% solutions to accelerate research and partner, deeply enhance education¹ entrenched across the global Of the world’s top pharma, medtech and innovati
Slide 23: Best-in-class data powers our solutions and services
Our best-in-class data powers our solution and service capabilities across our segments Enriched Data Analytics & Insights Workflow Solutions Expert Services On demand predictive Automate workflow SaaS to Support business critical Provide comprehensive, analytics capabilities to enable decisions and
Slide 24: Market-leading assets serving diverse personas across the innovation lifecycle
Our capabilities are underpinned by market-leading assets serving a diverse range of personas across the innovation lifecycle Market Knowledge & Learning Discover & Research Protect & Publish Commercialization ProQuest One™ Academic Video Web of Summon™ Cortellis™ Esploro™ ScholarOne™ Consultancy In
Slide 25: Mission critical solutions power customers through the innovation lifecycle
Our mission critical solutions power our customers through the innovation lifecycle Knowledge & Learning Discover & Research Protect & Publish Commercial -ization ProQuest One Empowering universities to educate students and conduct research efficiently Renewal Rate¹ Enriched through the curated coll
Slide 26: Our Operating Model
04 Our Operating Model 1 Clarivate”
Slide 27: An operating structure that enables ownership and scale
Academia Life Sciences Intellectual & Government & Healthcare Property Growth, resource allocation Growth, resource allocation Growth, resource allocation An operating and financial return ownership and financial return ownership and financial return ownership structure that Product Management Produ
Slide 28: Achieving scale across core markets
Achieving scale across core markets by bringing together our assets, enabling segment specific use cases across the innovation cycle Data Fusion Market Specific Solutions Serving Use Cases Across the Innovation Cycle A&G Enriched Data Academia & Government Publications Learning | Research | Research
Slide 29: Shared Content
Shared Content | Integrated data powers our solutions, unlocking high value use cases across our end markets Data Sources Data Fusion End Markets A&G Solutions 2B+ citations 1.5M+ queries of Derwent patent data within WoS¹ A&G 245M+ journal articles Publications 100%+ increase in WoS sessions access
Slide 30: Shared Technology
Shared Technology | Enabling customer value creation through unified technology platforms Interconnected Data Insights and Analytics Scalable Solutions Next Gen Solutions Data Data Scalable Technology Driven Infrastructure Science & Interoperable Products Innovation Common data stores and data Organ
Slide 31: Shared Commercial Channels
Shared Commercial Channels | Unleashing the power of our full set of solutions to exceed market growth: Top 5 Pharma customer case study Improving patient outcomes through our solutions set Resulting in double digit growth in key customer accounts Academia & Government $15M Web of EndNote™ Ebook Cen
Slide 32: Scale: significant cost synergies
Scale | Leveraged our shared services to achieve significant cost synergies and scale Streamline and consolidation Realized cost synergies Content Operations ~$75M S CIENTIFIC • Cross segment AI enabled editorial operations and quality assurance ~$30M Technology Infrastructure ~$100M • Datacenter an
Slide 33: Accelerated compound returns driven by reinvestment
Accelerated compound returns driven by reinvestment into high-potential growth areas Secular Growth Markets Operating Model Driving Accountability and Leveraging Shared Scale ~80% >90% Shared Content Recurring Renewal Revenue Rates Disciplined Significant Shared Technology Capital Operating Allocati
Slide 34: Gordon Samson, Chief Product Officer
Gordon Samson Chief Product Officer 34
Slide 35: Our Segments
05 Our Segments 1 Clarivate”
Slide 36: Academia & Government
Dr. Nandita Quaderi Jim Holmes Editor-in-Chief Web of Science SVP Sales Academia & Government Advance research excellence and student success to accelerate real-world outcomes 36
Slide 37: Academia & Government: largest segment with considerable opportunity
Academia & Government | Our largest segment with considerable market opportunity ~48% ~99% ~$7B ~4% Of the world’s top 400 Pct. of Clarivate universities use our solutions Serviceable Market Growth³ Revenue¹ to accelerate research and Addressable Market³ enhance education² 1 FY22 revenue. ² Top 400
Slide 38: Customers face accelerating market trends
Our customers face accelerating market trends which our solution set can help address Growing research funding & increasingly multi-disciplinary fields Growing academic operating model complexity Complexity of managing research Increasing demand to Changing operating model for process is increasing
Slide 39: Diverse range of solutions for research excellence
We offer a diverse range of solutions across our customer segment advancing research excellence and student success Research Content Workflow Software and Analytics Aggregation Solutions Analyze and explore the academic Provide comprehensive content Software tools to manage academic research landsca
Slide 40: We help academic and government institutions advance knowledge
We help academic and government institutions advance knowledge to build a better world Drive research excellence Empower researchers to tackle Improve operational across institutions today's global challenges efficiency and effectiveness Customers 40
Slide 41: Opportunity to expand content in non-native English speaking world
Opportunity to expand our content and solutions throughout the non- native English speaking world 4141
Slide 42: Life Sciences & Healthcare
Dr. Rob Poolman Tom Halliday SVP Product SVP Sales Life Sciences & Healthcare Empowering life sciences and healthcare organizations to create a healthier tomorrow 42
Slide 43: Life Sciences & Healthcare: high growth market
Life Sciences & Healthcare | High growth market driven by research and development ~17% ~100% ~$12B ~10% Of the top pharma, Pct. of Clarivate medtech and biotech Serviceable Market Growth³ Revenue¹ rely on us to improve Addressable Market³ patient outcomes² 1 FY22 revenue.² Top 30 pharma companies (
Slide 44: Customers face accelerating market trends
Our customers face accelerating market trends which our solution set can help address Accelerating HC data proliferation and demand for real world evidence Increasing regulatory requirements Real world evidence drives the Value-based care models Growing burden to manage value chain as therapeutic ca
Slide 45: Portfolio spans drug and device lifecycle
Our portfolio spans across the drug and device lifecycle from R&D to commercialization Research and Regulatory Commercialization Development and Safety Develop new drugs and medical Efficiently monitor drug safety issues Effectively inform commercial and devices from discovery through to and adhere
Slide 46: We empower life sciences and healthcare organizations
We empower life sciences and healthcare organizations to create a healthier tomorrow Drive asset and Advance innovative Accelerate path Measure, protect and portfolio value candidates to patients grow position Customers 46
Slide 47: Opportunity to extend capabilities to workflow software
Opportunity to extend our capabilities beyond data and insights to include mission critical workflow software solutions 47
Slide 48: Intellectual Property
Jack White Irmina Stroud SVP Product SVP Sales Intellectual Property Empowering customers to unlock the full potential of IP 48
Slide 49: Intellectual Property: cornerstone of innovation
Intellectual Property | Cornerstone of innovation fueling commercialization and real-world outcomes ~35% ~96% ~$5B ~6% Of top 50 R&D Pct. of Clarivate companies work with us Serviceable Market Growth³ Revenue¹ to accelerate the pace of Addressable Market³ innovation² 1 FY22 revenue. ² Top 50 based o
Slide 50: Customers face accelerating market trends
Our customers face accelerating market trends which our solution set can help address Increasing R&D spend to drive competitive innovation Increasing patent/trademark filing Increasingly complex IP AI/ML and predictive Managing IP as a business network requiring better analytics are making inroads a
Slide 51: Partner of choice for IP management and decision support
We are a partner of choice for IP management and decision support needs of innovation-driven organizations and law firms Patent and Patent and Patent and Trademark Trademark Trademark Maintenance Intelligence Management Solutions Support mission critical decisions Create a structured environment for
Slide 52: We help customers establish, protect and manage IP
We help customers establish, protect and manage their intellectual property Enable critical IP decision- Enhance IP management Improve practice making throughout the efficiency and effectiveness profitability and enhance innovation and brand lifecycle customer services Customers 52
Slide 53: Opportunity to connect and lead the IP ecosystem
Unique opportunity to connect and lead the IP ecosystem by combining insights, domain expertise and new technologies to enhance productivity and collaboration across the IP process 53
Slide 54: Investor Day 2023 Break
(S Clarivate” Investor Day 2023 Break
Slide 55: Jonathan Gear, Chief Executive Officer
Jonathan Gear Chief Executive Officer 55
Slide 56: Our Strategy
06 Our Strategy 1 Clarivate”
Slide 57: Evolving from data centric provider to insights-driven partner
We are evolving from a …to an insights-driven data centric solutions strategic partner to provider… support the innovation lifecycle 57
Slide 58: Growth acceleration framework
Growth acceleration framework: Intelligence that you can trust to transform the world 1 2 3 4 5 Key Pillars Execute customer-centric Leverage interconnected Go beyond data delivering Enable business processes Serve as a trusted partner, go-to-market model data for customer personas insights & predic
Slide 59: Our Current Position
07 Our Current Position 1 Clarivate”
Slide 60: Opportunity to expand organic growth across three segments
Significant opportunity to expand organic growth across our three segments Segments FY20-22 Growth Rate² Market Growth Rate³ Growth Opportunity Academia & Government ~2% ~4% ~2% Life Sciences & Healthcare ~6% ~10% ~4% Intellectual Property ~3% ~6% ~3% $2.7B¹ ~3% ~6% ~3% 1 FY22 revenue. 60 ² Historic
Slide 61: Academia & Government: realizing growth opportunity
Academia & Government | Realizing our growth opportunity through content, analytics and use case expansion Historical Market Growth Realizing our growth Growth¹ Growth Opportunity opportunity in Academia & Government ~2% ~4% ~2% + Deliver unparalleled research insights Capability Breakdown Performan
Slide 62: Life Sciences & Healthcare: moving up the value chain
Life Sciences & Healthcare | Moving up the value chain through integrated platforms and enhanced content Historical Market Growth Realizing our growth Growth¹ Growth Opportunity opportunity in Life Sciences & Healthcare ~6% ~10% ~4% + Accelerate drug and device R&D through Capability Breakdown Perfo
Slide 63: Intellectual Property: driving improvement through connected intelligence
Intellectual Property | Driving improvement through connected intelligence and use case expansion Historical Market Growth Realizing our growth Growth¹ Growth Opportunity opportunity in Intellectual Property ~3% ~6% ~3% + Strengthen core search capabilities and Capability Breakdown Performance expan
Slide 64: Realizing revenue growth opportunity across three segments by FY25
Realizing our revenue growth opportunity across our three segments by FY25 Segments FY20-22 Growth Rate² Growth Improvement FY25 Growth Rate Academia & Government ~2% ~2% ~4% Life Sciences & Healthcare ~6% ~4% ~10% Intellectual Property ~3% ~3% ~6% $2.7B¹ ~3% ~3% ~6% 1 FY22 revenue. 64 ² Historical
Slide 65: Jonathan Collins, Chief Financial Officer
Jonathan Collins Chief Financial Officer 65
Slide 66: Our Growth Plan
08 Our Growth Plan 1 Clarivate”
Slide 67: Growth plan to achieve and exceed market growth rates
Our growth plan will enable us to achieve and exceed market growth rates Total Addressable Market (TAM) Size of the total innovation lifecycle management market >100B TAM³ Serviceable Addressable Market (SAM) 10% Growth Rate Size of the innovation lifecycle management market served by our current so
Slide 68: Utilizing growth levers to achieve and exceed market growth
Utilizing our growth levers to achieve and exceed market growth rates Strategic Growth Pillars 1 2 3 4 5 Customer-centric Interconnected Insights and Business processes Value-add go-to-market model data predictive analytics and decision support services Academia & Government Life Sciences & Healthca
Slide 69: Academia & Government: returning to growth in underperforming areas
Academia & Government | Returning to growth in Achieve Growth underperforming areas Improving performance through our customer- Returning to market growth rates in Research & centric go-to-market model and value-add services Analytics and Workflow Software Solutions Web of Science Enhanced Content G
Slide 70: Academia & Government: growth across high performing areas
Academia & Government | Actioning our growth Exceed Growth opportunity across high performing areas Accelerating the capture of Driving growth and expanding SAM in high market opportunities performing areas Innovation Commercialization Best-in-class Workflow Solutions Cross-sell IP lifecycle platfor
Slide 71: Academia & Government: Pillars in action
Academia & Government | Pillars in action Advising senior leadership team Providing country-wide access Implementing country-wide of a top-tier US research to bibliometric analytics and engagement and workflow university on fastest growing new content sets to European software suite to maximize rese
Slide 72: Life Sciences & Healthcare: returning to growth in underperforming areas
Life Sciences & Healthcare | Returning to growth in Achieve Growth underperforming areas Improving performance through Returning to market growth rates in value-add services commercialization Embedded Services Layer Integrated Solutions Further integrate services into wider product and Unite and opt
Slide 73: Life Sciences & Healthcare: growth across high performing areas
Life Sciences & Healthcare | Actioning our growth Exceed Growth opportunity across high performing areas Accelerating the capture of Driving growth and expanding SAM in high market opportunities performing areas Regulatory Workflow and Insights Next Gen Drug Safety and Pharmacovigilance Combining da
Slide 74: Life Sciences & Healthcare: Pillars in action
Life Sciences & Healthcare | Pillars in action Providing region specific disease Enabling a top 5 medtech Empowering digital landscape views for a top 10 company to drive investment transformation at a top 25 pharmaceutical company, through and performance decisions pharmaceutical company, across cl
Slide 75: Intellectual Property: returning to growth in underperforming areas
Intellectual Property | Returning to growth in Achieve Growth underperforming areas Returning to market growth rates in Improving performance through Patent & Trademark Intelligence and Patent & value-add services Trademark Maintenance solutions Service Automation Embedded Intelligence Leverage AI a
Slide 76: Intellectual Property: growth across high performing areas
Intellectual Property | Actioning our growth Exceed Growth opportunity across high performing areas Accelerating the capture of Driving growth and expanding SAM in high market opportunities performing areas Patent and Trademark Offices Best-in-class IP Management Strengthen our partnerships with the
Slide 77: Intellectual Property: Pillars in action
Intellectual Property| Pillars in action Partnering with an automotive Supporting a Japanese technology Bringing together our insights and manufacturer to inform R&D corporation to effectively manage tech-enabled services to support a investment strategy through our complex IP regulations through an
Slide 78: Investing across growth levers to achieve and exceed market growth
Investing across our growth levers to achieve and exceed market growth rates Growth Acceleration Framework >100B Customer-centric go-to-market model TAM³ 10% Growth Rate Leverage interconnected data ~$25B Insights and predictive analytics SAM³ 6% Growth Rate Business processes & decision support ~$2
Slide 79: Our Financial Outlook
09 Our Financial Outlook 1 Clarivate”
Slide 80: Financial objectives
Financial objectives 1 2 3 4 Accelerate organic Durable margin through Attractive cash flow Disciplined capital growth to market levels the investment cycle engine allocation We are going to We are going to invest We are going to We are going to deleverage progressively improve to catalyze growth in
Slide 81: Financial evolution
Financial evolution NYSE Listing Today Outlook FY19 FY22 FY25 Organic Growth 3% 3% ~6% +300 bps Revenue $1.0B $2.7B >2.5x ~$3.0B 3x 30% 42% +1200 ~43% Adj. EBITDA +$1B $0.3B $1.1B bps $1.3B Adj. Diluted EPS $0.53 $0.85 +30₵ ~$1.00 2x Free Cash Flow <$0.1B $0.3B >2x ~$0.7B >10x Net Leverage 5.4x 4.2x
Slide 82: Improvement trajectory
Improvement trajectory Revenue Revenue ($B) Adjusted EBITDA ($M) ~ $3.0 Expect organic growth acceleration $1,113 $1,130 to reach market growth levels by 2025. ~$3B revenue by 2025 as $2.7 $2.7 6.0% organic growth improves. USD 41.8% 42.3% 4.5% expected to remain at current + ~50 bps p.a. 3.25% leve
Slide 83: Accelerate organic growth to market levels
Key Achieving / exceeding market growth Close to market growth Accelerate organic growth to market levels Underperforming market growth Segment FY19-22 FY23 FY24 FY25 Academia & Government (Market Growth ~4%) Research and Analytics ~48%¹ Content Aggregation Workflow Software Solutions Life Sciences
Slide 84: Durable margin through the investment cycle
Durable margin through the investment cycle Investment in Margin Expansion Investment in Organic Growth 400 43% ~42% 45.0% 350 42% +150 bps 38% 40.0% 300 ~6% 35.0% 250 30% 30.0% 200 3% Average Organic Revenue Growth 150 (2019-22) ~3% 25.0% 100 20.0% 50 15.0% 0 10.0% 2019A 2020A 2021A 2022A 2023P 202
Slide 85: Attractive cash flow engine
Attractive cash flow engine One-Time Costs One Time Costs ($M) Interest and Taxes ($M) Expect minimal one-time costs in future as most of large M&A $215 integration is complete Interest and Taxes $252 $270 Expect interest costs to decline as $40 excess cash is used to de-lever. Cash $64 $70 taxes ex
Slide 86: Disciplined capital allocation
Disciplined capital allocation 1 2 3 4 Optimize capital Organic investments Retain option M&A structure to catalyze growth to repurchase shares Continue to prioritize Enhance strategic value $1bn repurchase Highly selective deleveraging in 2023 by prioritizing high ROI program authorized in investme
Slide 87: Continue to strengthen balance sheet and mitigate interest rate risk
Continue to strengthen balance sheet and mitigate interest rate risk Total Debt / Net Leverage ($B) 10.0 Interest Coverage ($M) Deleveraging 8.0 Anticipate <4x leverage by end of $5.1 $270 $4.7 6.0 $252 2023 by utilizing FCF to repay floating rate debt 4.0 4x 4x Expect leverage to be <3x by 2025 4x
Slide 88: Multiple reinforcing dynamics present a compelling growth opportunity
Multiple reinforcing dynamics combine, presenting a compelling opportunity to drive profitable and sustainable growth Secular Growth Markets Economically Insulated Mission Critical Solutions •Robust x Business Model Recurring information Our markets are Resilient markets which Industry gold standard
Slide 89: Q&A Session
10 Q&A Session 1 Clarivate”
Slide 90: Closing Remarks
Closing Remarks Jonathan Gear Chief Executive Officer 90
Slide 91: Accelerated compound returns driven by reinvestment
Accelerated compound returns driven by reinvestment into high-potential growth areas Secular Growth Markets Operating Model Driving Accountability and Leveraging Shared Scale ~80% >90% Shared Content Recurring Renewal Revenue Rates Disciplined Significant Shared Technology Capital Operating Allocati
Slide 92: Thank you
Thank you © 2023 2022 Clarivate. All rights reserved. Republication or redistributionof Clarivate content, including by framing or similar means, is prohibited without the prior written consent of Clarivate. Clarivate and its logo, as well as all other trademarks used herein are trademarks of their