Crawford & Company · NYSE:CRD.A
Crawford & — FY2021 Earnings Presentation
34 slides from Crawford &'s earnings presentation, Mar 14, 2022
Slide 1: Fourth Quarter and Full Year 2021 Earnings Conference Call
Crawford & Company Fourth Quarter and Full Year 2021 Earnings Conference Call CRD-A & CRD-B (NYSE)
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 expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative a
Slide 3: Financial Highlights Full Year 2021
(1) See appendix for non-GAAP explanation and reconciliation of non-GAAP measures Financial Highlights Full Year 2021 GAAP NON-GAAP¹ KEY METRICS¹ $1.1 BILLION Revenues before reimbursements $30.7 MILLION Net income $98.3 MILLION Adjusted EBITDA 8.9% EBITDA margin $62.5 MILLION Operating earnings $54
Slide 4: Our Long-Term Growth Strategy
Our Long-Term Growth Strategy 1Refer to 8-K filed on 2/11/22 CRD Share repurchase authorization 8-K Corporate Strategy Acquire adjacent services to bolster presence in property claim ecosystem Bolster technical capabilities by attracting top-tier technical adjusting talent globally Drive market shar
Slide 5: Corporate Strategy Overview
Corporate Strategy Overview
Slide 6: Realigned segments with geographic-centered reporting structure
We have realigned our segments to create better scale and synergies and have moved to a geographic-centered reporting structure¹ Operational Reorientation North America Loss Adjusting Broadspire (US-only) International Operations Platform Solutions (US-only) Comprised of the following service lines
Slide 7: Impact Across Our Global Service Lines Full Year Performance
7 Impact Across Our Global Service Lines (GSLs) Full Year Performance FY Revenues $398.0M FY revenue growth of nearly 9% over prior year Onboarded 86 specialist adjusters in 2021, progressing toward our three-year goal Aided by recovering economic activity in U.S. and impact from Hurricane Ida and W
Slide 8: Net Promoter Score
Net Promoter Score Increased overall score to 51, up three points from Q3 and six points from 2020 Referenced as part of our standard operations to further improve client service Added $103 million in new and enhanced business in 2021 New and Renewal Business Activity¹ Retained 94% of our US Broadsp
Slide 9: Environmental, Social and Governance Highlights
Environmental, Social and Governance Highlights Corporate Governance Committed to maintaining the trust of our investors and other stakeholders, including our employees, clients and vendors Inclusion and Diversity Established goal to measure ourselves against baselines of diversity and inclusion, an
Slide 10: Financial Overview
Financial Overview Crawford
Slide 11: Fourth Quarter 2021 Financial Summary
(1) See appendix for non-GAAP explanation and reconciliation of non-GAAP measures. 11 Fourth Quarter 2021 Financial Summary Quarter Ended December 31, December 31, ($ in millions, except per share amounts) 2021 2020 % Change Revenues $292.9 $257.4 14% Non-GAAP Revenues excluding foreign exchange flu
Slide 12: Crawford Loss Adjusting Q4 Highlights
Crawford Loss Adjusting Q4 Highlights Revenue growth of 11% over the prior year period Onboarded 24 specialist adjusters in Q4, marking progress on our three-year goal Aided by recovering economic activity in U.S. and impact from Hurricane Ida Operating Results (4Q 2021 v. 4Q 2020) Revenues of $123.
Slide 13: Crawford Platform Solutions Q4 Highlights
Crawford Platform Solutions Q4 Highlights Revenue growth of 41% over the prior year period driven by US CAT Improved flow through as the volume of transactions continued to increase over the year Expanding margins in Networks and the positive contribution from Praxis acquisition drove earnings impro
Slide 14: Crawford TPA Solutions Q4 Highlights
Crawford TPA Solutions Q4 Highlights Revenue growth of 4% compared to prior year Increase in Crawford Legal Services Weakness in Canadian and European operations Operating Results (4Q 2021 v. 4Q 2020) Revenues of $99.1 million versus $95.8 million Constant dollar revenues of $98.6 million Gross prof
Slide 15: Additional Financial Matters
Additional Financial Matters Unallocated Corporate and Shared Costs and Credits Unallocated corporate costs of $9.3 million in Q4 compared to $11.2 million in the prior year period Decrease primarily due to a decrease in self-insured expenses, lower pension expense, incentive compensation and other
Slide 16: Balance Sheet Highlights
(1) See Appendix for non-GAAP explanation and reconciliation Balance Sheet Highlights Unaudited ($ in thousands) December 31, 2021 December 31, 2019 December 31, 2020 December 31, 2018 Change Change Cash and cash equivalents $ 53,228 $ 44,656 $ 8,572 Accounts receivable, net 134,458 123,060 11,398 U
Slide 17: Net Debt and Pension Liability
17 Net Debt and Pension Liability $121.8 million $17.9 million Net debt at $121.8 million Pension liability at $17.9 million $171.2 million $121.7 million
Slide 18: Operating and Free Cash Flow
(1) See Appendix for non-GAAP explanation and reconciliation Operating And Free Cash Flow Unaudited ($ in thousands) 2021 2019 2020 2018 Change Change Net Income Attributable to Shareholders of Crawford & Company $ 30,692 $ 28,296 $ 2,396 Depreciation and Other Non-Cash Operating Items 47,533 44,625
Slide 19: Crawford & Company
Crawford & Company The world’s largest publicly listed independent provider of global claims management and outsourcing solutions. 9,000 50,000+ 70 $18B+ employees Field Resources countries claims managed annually Crawford rT
Slide 20: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information 20
Slide 21: 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 22: Appendix: Non-GAAP Financial Information (cont.)
Appendix: Non-GAAP Financial Information (cont.) Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and loca
Slide 23: Crawford Loss Adjusting 2021 Highlights
Crawford Loss Adjusting 2021 Highlights Revenue growth of 8.5% over the prior year period Onboarded 86 specialist adjusters in 2021, marking progress on our three-year goal Aided by recovering economic activity in U.S. and impact from Hurricane Ida and Winter Storm Uri Operating Results (FY 2021 v.
Slide 24: Crawford Platform Solutions 2021 Highlights
Crawford Platform Solutions 2021 Highlights Revenue growth of 32.4% over the prior year period driven by US CAT Improved flow through as the business continued to scale over the year Expanding margins in Networks and the positive contribution from Praxis acquisition drove earnings improvements Opera
Slide 25: Crawford TPA Solutions 2021 Highlights
Crawford TPA Solutions 2021 Highlights Revenue growth of 7.2% over prior year period M&A contributed $18.9 million, or 5.1% of growth Benign claims environment and COVID pressures still being felt in Canada and international TPA Continued lag in medical management recovery in the U.S. Operating Resu
Slide 26: Total Revenues Before Reimbursements by Major Currency
Total Revenues Before Reimbursements by Major Currency The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Three Months Ended (in thousands) December 31, 2021 December 31, 2020 Geographic Area Curre
Slide 27: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Revenues, Costs of Services Provided, and Operating Earnings Quarter Ended Quarter Ended Quarter Ended Quarter Ended December 31, December 31, December 31, December 31, Unaudited ($ in thousands) 2021 2019 2020 2018 Revenues Before Reimbursements Total Revenues $ 302
Slide 28: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Revenues, Costs of Services Provided, and Operating Earnings Year Ended Quarter Ended Year Ended Quarter Ended December 31, December 31, December 31, December 31, Unaudited ($ in thousands) 2021 2019 2020 2018 Revenues Before Reimbursements Total Revenues $ 1,139,231
Slide 29: Reconciliation of Non-GAAP Items (cont.) Adjusted EBITDA
Reconciliation of Non-GAAP Items (cont.) Adjusted EBITDA ) Quarter Ended Quarter Ended December 31, December 31, December 31, December 31, Unaudited ($ in thousands) 2021 2019 2020 2018 Net income attributable to shareholders of Crawford & Company $ 1,653 $ 9,401 Add: Depreciation and amortization 9
Slide 30: Reconciliation of Non-GAAP Items (cont.) Net Debt
Reconciliation of Non-GAAP Items (cont.) Net Debt December 31, December 31, December 31, December 31, Unaudited ($ in thousands) 2021 2019 2020 2018 Net Debt Short-term borrowings $ 10,616 $ 1,570 Current installments of finance leases and other obligations 88 267 Long-term debt and finance leases,
Slide 31: Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit
Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit Three months ended Three months ended ($ in thousands) December 31, 2021 December 31, 2019 December 31, 2020 December 31, 2018 Segment gross profit: Crawford Loss Adjusting $ 25,789 $ 32,640 Crawford Platform Solutions 15,835 11,166 Crawf
Slide 32: Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit
Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit Year ended Three months ended ($ in thousands) December 31, 2021 December 31, 2019 December 31, 2020 December 31, 2018 Segment gross profit: Crawford Loss Adjusting $ 106,655 $ 118,854 Crawford Platform Solutions 57,461 43,619 Crawford TP
Slide 33: Reconciliation of Fourth Quarter Non-GAAP Results
Reconciliation of Fourth Quarter Non-GAAP Results Three Months Ended December 31, 2021 Unaudited ($ in thousands) Revenues Revenues Non-GAAP Operating Earnings Non-GAAP Operating Earnings Pretax Earnings Pretax (Loss) Earnings Net Income Attributable to Crawford & Company Net (Loss) Income Attributa
Slide 34: Reconciliation of Full-Year Non-GAAP Results
Reconciliation of Full-Year Non-GAAP Results Year Ended December 31, 2021 Unaudited ($ in thousands) Revenues Revenues Non-GAAP Operating Earnings Non-GAAP Operating Earnings Pretax Earnings Pretax (Loss) Earnings Net Income Attributable to Crawford & Company Net (Loss) Income Attributable to Crawfo