Crawford & Company · NYSE:CRD.A
Crawford & — Investor Presentation (December 2008)
30 slides from Crawford &'s investor presentation, Dec 15, 2008
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation December 15-16, 2008 the STRENGTH of WORKING TOGETHER SM
Slide 2: Forward-looking Statements and Segment Operating Earnings
Forward-looking Statements and Segment Operating Earnings 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 q
Slide 3: Our Market-Leading Global Business
Crawford & Company OUR MARKET- LEADING GLOBAL BUSINESS • World’s largest fully-integrated independent provider of global claims management solutions. • Four reporting segments: – International Operations • Serves the global insurance industry and multi-national corporations – U.S. Property & Casualt
Slide 4: What we do... Our Global Products and Services
What we do…Our Global Products and Services The Crawford System of Claims Solutions Property Casualty Warranty Marine & Transport Class Actions Administration & Bankruptcy TPA Workers Compensation Medical and Case Management Contractor (Broadspire) Connection Motor & Auto CAT 4 The Strength of Worki
Slide 5: Where We Do It: Locations Across a Global Economy
Where We Do It: Locations Across a Global Economy More than 700 locations in 63 countries 5 The Strength of Working Together SM
Slide 6: Diversified Business Segments
Diversified Business Segments 2008 Revenues before Reimbursements of $786 Million Nine months ended September 30, 2008 Broadspire • Workers’ Compensation and Liability Claims Administration International • Medical and Case Management • Property and Casualty • Long-Term Care Services Services • Integ
Slide 7: Financial Review
Financial Review the STRENGTH of WORKING TOGETHER SM
Slide 8: Consolidated Revenue
Consolidated Revenue (Trailing 12 months) As of September 2008 12-Month Moving Total Revenue Average Annual Rate of Change - 12 Month Moving Total ($000s) 2008 Actual 2007 Actual 2006 Actual 2005 Actual 2008/2007 2007/2006 2006/2005 1st Quarter 987,046 861,524 789,255 748,046 As of September 30 8% 1
Slide 9: Consolidated Operating Earnings
Consolidated Operating Earnings (Trailing 12 months) As of September 2008 12-Month Moving Operating Earnings Average Annual Rate of Change - 12 Month Moving Total ($000s) 2008 Actual 2007 Actual 2006 Actual 2005 Actual 2008/2007 2007/2006 2006/2005 1st Quarter 49,540 29,399 30,221 32,473 As of Septe
Slide 10: Consolidated Operating Margin
Consolidated Operating Margin (Trailing 12 Months) As of September 2008 12-Month Moving Total Ratio Average Annual Rate of Change - 12 Month Moving Total ($000s) 2008 Actual 2007 Actual 2006 Actual 2005 Actual 2008/2007 2007/2006 2006/2005 1st Quarter 5.02% 3.42% 3.83% 4.34% As of September 30 2.74%
Slide 11: Year-to-Date September 30, 2008 Financials
Year-to-Date September 30, 2008 Financials CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited (In Thousands, Except Earnings Per Share and Percentages) Nine Months Ended September 30 2008 2007 % Change Revenues: Revenues Before Reimbursements $785,693 $729,919 8% Reimbursements
Slide 12: September 30, 2008 Balance Sheet
September 30, 2008 Balance Sheet Crawford & Company Consolidated Balance Sheet Highlights As of September 30, 2008 and December 31, 2007 In thousands, except percentages Unaudited September 30, December 31, 2008 2007 Change Cash and cash equivalents $56,819 $50,855 $5,964 Accounts receivable, net 17
Slide 13: Year-to-Date Free Cash Flow
Year-to-Date Free Cash Flow Crawford & Company Free Cash Flow (a non-GAAP measure) For the year-to-date periods ended September 30, 2008 and 2007 In thousands Unaudited September 30, September 30, 2008 2007 Variance Net Income $23,922 $12,812 $11,110 Depreciation and Non-Cash Items 22,737 22,146 591
Slide 14: Consolidated Operating Cash Flow
Consolidated Operating Cash Flow (Trailing 12 Months) As of September 2008 12-Month Moving Operating Cash Flow Average Annual Rate of Change - 12 Month Moving Total ($000s) 2008 Actual 2007 Actual 2006 Actual 2005 Actual 2008/2007 2007/2006 2006/2005 1st Quarter 51,372 11,989 61,066 32,526 As of Sep
Slide 15: Operating Segments
Operating Segments the STRENGTH of WORKING TOGETHER SM
Slide 16: Year-to-Date International Operations Results
Year-to-Date International Operations Results $ in millions Summary Results, International Operations $340 For the quarters ended September 30, 2008 and 2007 $320 in thousands except percentages Unaudited $300 $335.5 2008 2007 % Change $280 $260 Revenues $ 115,362 $ 96,735 19.3% $240 $269.3 $220 Tot
Slide 17: International (excluding U.S.) Property & Casualty Insurance Market Opportunities
International (excluding U.S.) Property & Casualty Insurance Market Opportunities • Only 4.4% of dollars spent by rest of world (ROW) carriers on claims are outsourced to third party independent adjusters • Very few global claims providers • As ROW insurance carriers look to consolidate claims servi
Slide 18: Global Three-Tiered International Operations
Global Three-Tiered International Operations Significant opportunity for cross leverage & synergies Tier Area Market Regulatory/Compliance Business Culture U.K. 1 Canada Mature Sophisticated Robust Cohesive Australia Scandinavia Transition Holland Asia 2 select Europe Variable Emerging Diverse Trans
Slide 19: YTD U.S. Property & Casualty Results
YTD U.S. Property & Casualty Results Summary Results, U.S. Property & Casualty $ in millions For the quarters ended September 30, 2008 and 2007 $170 in thousands except percentages Unaudited $160 2008 2007 % Change $150 $156.9 Revenues $ 56,227 $ 49,983 12.5% $140 $148.7 Total Operating Expenses 49,
Slide 20: U.S. Insurance Market
U.S. Insurance Market • Approximately 14% of dollars spent by U.S. carriers on claims services are outsourced to third parties – High propensity to outsource non-core lines and/or non-core states • Outsourced claims service provider market is highly fragmented – Crawford is the market leader with ap
Slide 21: U.S. Property & Casualty Growth Opportunities
U.S. Property & Casualty Growth Opportunities • Strategic Growth – Target large insurers who are consolidating their vendor lists and ensure Crawford is named an approved vendor • Quality improvement • Efforts toward training and product development – Target markets • Small and mid-market carriers •
Slide 22: Year-to-Date Broadspire Results
Year-to-Date Broadspire Results Summary Results, Broadspire $ in millions For the quarters ended September 30, 2008 and 2007 in thousands except percentages $250 Unaudited 2008 2007 % Change $200 $236.3 $246.1 Revenues $ 76,911 $ 78,434 -1.9% $150 Total Operating Expenses 75,832 77,003 -1.5% $100 YT
Slide 23: Broadspire
Broadspire Fourth Largest TPA in Workers’ Compensation/Liability Market Products and Services: Workers’ Compensation Claims Services Auto and General Liability Claims Services Medical and Disability Management Services Long-Term Care Services Risk Management Information Systems (Risk Sciences Group)
Slide 24: U.S. TPA Market Opportunities
U.S. TPA Market Opportunities Self-Insureds, Large Accounts and Captives outsource most of their claim services Market stable in terms of claim counts Outsourced claim services are fragmented but consolidating Unallocated Loss Adjusting Expenses Outsourced Loss Adjusting Expenses $321 Million 10.0%
Slide 25: Legal Settlement Administration Results
Legal Settlement Administration Results Summary Results, Legal Settlement Administration $ in millions For the quarters ended September 30, 2008 and 2007 $70 in thousands except percentages $65 Unaudited $65.8 2008 2007 % Change $60 Revenues $ 18,416 $ 20,622 -10.7% $55 $57.0 Total Operating Expense
Slide 26: Products and Services
Products and Services • The Garden City Group, Inc. (GCG) provides these core services: – GCG Class Action Services provides technology-intensive administrative services for plaintiff and defense counsel and corporate defendants to expedite high-volume class action settlements. • GCG Class Action Se
Slide 27: Securities Class Action Cases
Securities Class Action Cases 35 30 33 25 26 20 15 10 11 5 4 4 4 0 AB Data, Berdon Complete Heffler Gilardi and Garden Ltd. LLP Claims Radetich & Co., LLC City Group Solutions, LLC Saitra LLP Source: RiskMetrics Group (SCAS Top 100 since 1995, September 30, 2008) GCG has handled one third of the top
Slide 28: Summary
Summary the STRENGTH of WORKING TOGETHER SM
Slide 29: Crawford is "Positioned for Growth"
Crawford is “Positioned for Growth” • Access to growing global markets • Increasing market share both domestic and internationally • Crawford expects to benefit from global consolidation of TPA vendors • Diverse, high quality customer base • High customer retention rates • Emphasis on quality and va
Slide 30: The Strength of Working Together
The Strength of Working Together “Crawford & Company will be known as a target driven corporation that meets its promises to clients and shareholders.” Jeffrey T. Bowman President and CEO 30 The Strength of Working Together SM