Slide 1: 2Q2018 Earnings Presentation
2Q2018 Earnings Presentation July 31, 2018 © 2018 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures
2Q2018 Earnings Presentation Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures Forward-Looking Statements This release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainti
Slide 3: Business and Financial Highlights
2Q2018 Earnings Presentation Business and Financial Highlights • Organic constant currency revenue growth of 7.4% from Insurance strength and improvement in Energy & Specialized Markets and Financial Services • Organic constant currency EBITDA growth at 8.9%, demonstrating operating leverage • Organ
Slide 4: Financial Summary
2Q2018 Earnings Presentation Financial Summary (in $ millions, except per share Three months ended June 30th Subscription/Long-term Revenue amounts) 2018 2017 % change Revenue $ 601 $ 523 14.9% 80% 82% YTD18 YTD17 Adjusted EBITDA 291 254 14.4 Net Income 154 121 26.9 Adjusted Net Income 179 139 29.1
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
2Q2018 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins Total Organic Revenue Adjusted EBITDA margin margin 8.9% 8.2% 8.2% 52% 52% 7.2% 7.4% 7.4% 7.4% 7.0% 7.0% 6.3% 50% 50% 5.8% 5.3% 50% 50% 50% 50% 50% 5.2% 49% 4.8% 5.0% 49% 49% 49% 49% 48% 48% 4.1% 48% 2.5% 47% 1
Slide 6: Segment Trends
2Q2018 Earnings Presentation Segment Trends Insurance Energy Financial Organic Constant Currency Revenue Growth Organic Constant Currency Adjusted EBITDA Growth 10.2% 16.0% 8.5% 8.4% 6.5% 7.2% 6.4% 10.1% 10.5% 4.0% 5.0% 7.8% 7.2% 4.5% 4.8% 4.5% 1.4% 3.0% 0.6% 4.4% 1.2% flat 0.5% 0.9% -1.7% -2.5% -2.
Slide 7: Segments
Segments © 2018 2017 Verisk Analytics, Inc. All rights reserved. 7
Slide 8: Insurance
2Q2018 Earnings Presentation Insurance Industry-leading data analytics and insights Underwriting & Rating Solutions Claims Solutions Industry-standard insurance programs Integrated analytics solutions for improving Property-specific underwriting & rating info claims outcomes at every step of the pro
Slide 9: Insurance Quarterly Performance
2Q2018 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights % change (in $ millions) • Underwriting & rating organic growth across all businesses Organic 2Q18 2Q17 Reported Organic through cross-sell and sale of new solutions CC UW & Rating $ 288.9 $ 262.0 10.3% 6.2%
Slide 10: Energy and Specialized Markets
2Q2018 Earnings Presentation Energy and Specialized Markets Unique insight on the world’s energy resources and intelligent compliance solutions Solutions Research, consulting and data analytics for the Improving our understanding of global global energy, chemicals, and metals and mining environment
Slide 11: Energy & Specialized Markets Quarterly Performance
2Q2018 Earnings Presentation Energy & Specialized Markets Quarterly Performance Financials Business Highlights % change (in $ millions) Organic • Organic revenue growth driven by WoodMac research 2Q18 2Q17 Reported Organic growth and strong growth in consulting and 3E CC Revenue $ 129.9 $ 110.3 17.7
Slide 12: Financial Services
2Q2018 Earnings Presentation Financial Services Powerful information, analytics, and data management solutions Solutions Solutions for financial institutions including Systems and services to help retailers competitive benchmarking, decisioning prevent loss, manage risk, and ensure algorithms, custo
Slide 13: Financial Services Quarterly Performance
2Q2018 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights % change (in $ millions) Organic • Improved growth supported by modest growth in Portfolio 2Q18 2Q17 Reported Organic Management solutions and strong growth in Enterprise Data CC Revenue $ 42.0 $ 30.
Slide 14: Cash Flow and Capital
Cash Flow and Capital © 2018 2017 Verisk Analytics, Inc. All rights reserved. 14
Slide 15: Cash Flow Utilization
2Q2018 Earnings Presentation Cash Flow Utilization 2018 2017 2018 (in $ millions) 2015 2016 (1) 2017 2Q-YTD 2Q-QTD 2Q-QTD Net cash provided by operating activities $ 591M $ 656M $ 744M $ 534M $112 M $207 M Capital expenditures (139) (146) (184) (99) (41) (56) Free cash flow (FCF) 452 510 560 435 71
Slide 16: Capital Structure
2Q2018 Earnings Presentation Capital Structure as of 06/30/2018 (in $ millions) Bonds $2,300 Revolver Drawn 480 Total Debt $2,780 1,020 Debt/EBITDA (1) 2.4x Covenant level (2) 3.5x Investment Grade Ratings S&P: BBB- Moody’s: Baa2 (May-2018: upgraded from Baa3) Revolver due Fitch: BBB+ 480 May 2022 9
Slide 17: Capital Management Philosophy
2Q2018 Earnings Presentation Capital Management Philosophy Focused on Value Creation • Understand and optimize operating capital generation • Identify internal and external investment opportunities • Compare estimated returns on invested capital relative to risk- weighted WACC • Compare operating ca
Slide 18: Appendix: Supplemental Slides and Non-GAAP Reconciliations
Appendix: Supplemental Slides and Non-GAAP Reconciliations © 2018 2017 Verisk Analytics, Inc. All rights reserved. 18
Slide 19: Segment Mapping
2Q2018 Earnings Presentation Segment Mapping Previous Segmentation New Segmentation Decision Risk Energy Financial Key Solutions Insurance Analytics Assessment & Spec. Mrkts. Services ISO Solutions A F Underwriting C B F Claims Analytics C G AIR Worldwide C F Xactware C G Geomni C G Sequel C F AER D
Slide 20: Non-GAAP Reconciliations
2Q2018 Earnings Presentation Non-GAAP Reconciliations Constant Currency Growth Our operating results reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which we transact change in value over time compared to the U.S. doll
Slide 21: Segment Results Summary and EBITDA Reconciliation
2Q2018 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior Year Period Segment Results Summary and EBITDA Reconciliation 2Q18 2Q17 Change Organic Insurance revenues $413.9M $381.7M 8.4% Organic Energy & Specialized Markets revenues 119.3 109.7 8.7% Organic F
Slide 22: Adjusted Net Income/EPS and Free Cash Flow
2Q2018 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior Year Period Adjusted Net Income and EPS 2Q18 2Q17 Change Net income $153.5M $121.0M 26.9% plus: Amortization of intangible assets 32.0 23.9 less: tax effect on amortization of intangi
Slide 23: Adjusted EBITDA and Free Cash Flow
2Q2018 Earnings Presentation Non-GAAP Reconciliations Adjusted EBITDA and Free Cash Flow | Historical Full Year Periods Adjusted EBITDA 2017 2016 2015 Income from continuing operations $555.1M $451.5M $487.5M Interest expense 119.4 120.0 121.4 Provision for income taxes 135.9 202.2 196.6 Depreciatio
Slide 24: © 2018 Verisk Analytics, Inc. All rights reserved.
© 2018 Verisk Analytics, Inc. All rights reserved. 24