S&p Global Inc. · NYSE:SPGI
S&p Global — Barclays Americas Select Franchise Conference 2019
33 slides from S&p Global's conference presentation, May 15, 2019
Slide 1: Barclays Americas Select Franchise Conference
Barclays Americas Ewout Steenbergen CFO Select Franchise Chip Merritt SVP Investor Relations Conference May 15, 2019 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, which express management’s current views concerning future events, trends,
Slide 4: 360° view makes us vital to the global markets
360° view makes us vital to the global markets. We provide data and analytics, research and commentary, benchmarks and credit ratings through the collective strength of our divisions. 4
Slide 5: 1Q 2019 results by segment
1Q 2019 results by segment Adjusted segment operating Revenue: $1,571 million profit: $775 million $207 $98 Market Intelligence $482 $163 $217 $151 Ratings1 S&P Dow Jones Indices2 $696 $364 Platts ($ in millions) ($ in millions) Notes: Revenue chart excludes corporate revenue and consolidating adjus
Slide 6: Consistent revenue growth
Consistent revenue growth Revenue 3-year CAGR: 6% $7,000 $6,063 $6,258 $6,000 $5,661 $5,313 $5,000 $4,000 $3,000 $2,000 $1,567 $1,571 $1,000 $0 ($ in millions) 2015 2016 2017 2018 1Q 2018 1Q 2019 6
Slide 7: Adjusting operating profit margin improvement continues
Adjusting operating profit margin improvement continues Adjusted Operating Profit Margin 60% 50% 48.8% 47.3% 48.9% 46.5% 46.9% 42.4% 39.7% 40% 30% 20% 10% 0% 2015 2016 2017 2018 1Q 2018 1Q 2019 TTM* Notes: Beginning in 2016, the Company began excluding deal-related amortization from its non-GAAP res
Slide 8: Adjusted diluted earnings per share growth continues
Adjusted diluted earnings per share growth continues Adjusted Diluted Earnings Per Share 3-year CAGR: 22% $9.00 $8.50 $8.00 $6.89 $7.00 $6.00 $5.35 $5.00 $4.69 $4.00 $3.00 $2.00 $2.11 $2.00 $1.00 $0.00 2015 2016 2017 2018 1Q 2018 1Q 2019 Note: Beginning in 2016, the Company began excluding deal-rela
Slide 9: Revenue growth and productivity initiatives feed investments and shareholder returns
Revenue growth and productivity initiatives feed investments and shareholder returns Investments in new revenue Revenue growth opportunities and Expanding margins productivity and FCF Return ≥75% Productivity initiatives of FCF to shareholders 9
Slide 10: 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 11: Progress on new ~$100 million, 3-year cost reduction program
Progress on new ~$100 million, 3-year cost reduction program Target annual run‐rate savings 2018 to 2020 Run‐rate savings achieved in first year Productivity improvements across support functions $45‐55M and real estate Productivity improvements in technology & digital $55‐60M $45m across support in
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 46-year – Return capital to – Committed to track record of steady shareholders via share investment-grade annual dividend repu
Slide 13: Consistent track record of returning cash to shareholders
Consistent track record of RETURNED OVER returning cash to shareholders $7 Billion SINCE START OF 2015 $2,163 $1,503 $1,422 $1,337 $785 Share Repurchases Dividend 2015 2016 2017 2018 1Q 2019 ($ in millions) Note: Shares repurchased are reported on a settlement-date basis 13
Slide 14: 2019 areas of focus
2019 areas of focus • Bring additional transparency and independent analytics to Chinese capital markets with Ratings Global and Market Intelligence programs • Expand Platts capabilities in Asia • Continue S&P Global platform development − Ongoing CIQ client migration Customer Orientation − Begin ad
Slide 15: 2019 areas of focus
2019 areas of focus • Enable cloud-first strategy • Implement numerous Kensho projects Technology • Optimize management of data ingestion and data operations Operational • Leverage AI and machine-learning capabilities Excellence • Continue to improve cyber security • Raise technological acumen of al
Slide 16: 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) 16
Slide 17: 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 $3,611 $3,564 $3,569 $3,662 $3,663 $2,791 $2,400 $1,976 $1,487 $1,454 2015 2016 2017 2018 1Q 2019 ($ in millions) Debt Cash, cash equivalents, restricted cash, and short-term investments 17
Slide 18: Resilient business model
Resilient business model Our Revenue Comprises Recurring Components Proportion of revenue, 2017 Note: Continuous re-financing Relatively more needs (i.e., maturing outstanding recurring revenues debt) provide a stable base in Ratings’ Transaction revenues Non-Subscription revenues* Ratings’ Transact
Slide 19: Ratings financial snapshot
Ratings financial snapshot Revenue Adjusted Operating 3-year CAGR: 6% Profit Margin $2,988 56.0% $2,883 53.6% 54.7% 52.3% $2,535 49.6% $2,428 47.2% $748 $696 2015 2016 2017 2018 1Q 1Q 2015 2016 2017 2018 1Q 1Q 2018 2019 2018 2019 ($ in millions) 19
Slide 20: S&P Global Ratings: revenue 2000–2018
S&P Global Ratings: revenue 2000–2018 Financial crisis had modest impact on Corporate & Government revenue $3,000 $2,500 CRISIL, Other* $2,000 $1,500 Structured $1,000 Corporates, 2008 $500 7% decline in Corporates, Financials & Financials & Government revenue Government $0 (Revenue, $ in millions)
Slide 21: U.S. corporate debt as a share of U.S. GDP (nominal)
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 120% 100% 80% 60% 40% 20% 0% Credit market instruments including bonds, commercial paper, and loans, excluding agency and GSE-backed securities from fina
Slide 22: S&P Dow Jones Indices financial snapshot
S&P Dow Jones Indices financial snapshot Adjusted Operating Revenue Profit Margin 3-year CAGR: 12% $837 $728 66.5% 65.6% 66.4% 68.0% 70.5% 69.5% $638 $597 $212 $217 2015 2016 2017 2018 1Q 1Q 2015 2016 2017 2018 1Q 1Q 2018 2019 2018 2019 ($ in millions) 22
Slide 23: 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 2018 awareness Traded Derivative
Slide 24: Market Intelligence financial snapshot
Market Intelligence financial snapshot Revenue Adjusted Operating 3-year CAGR: 9% Profit Margin $1,833 $1,661 $1,683 $1,405 32.1% 34.1% 33.8% 29.9% 29.2% 23.9% $439 $482 2015 2016 2017 2018 1Q 2Q 2015 2016 2017 2018 1Q 1Q ($ in millions) 2018 2018 2018 2019 24
Slide 25: S&P Global Market Intelligence
S&P Global Market Intelligence AREAS OF FOCUS: Desktop Release production version of new Market Intelligence platform Transition Capital IQ users to the Data Management Solutions new platform Continue to add unique content and Credit Risk Solutions analytical tools RECENTLY ACQUIRED: Panjiva - Globa
Slide 26: 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: 8% Profit Margin $316 $214 47.1% 49.1% 48.0% 47.4% 41.2% $774 $815 38.4% $711 $655 $196 $207 2015 2016 2017 2018 1Q 1Q 2015 2016 2017 2018 1Q 1Q ($ i
Slide 27: S&P Global Platts
S&P Global Platts Revenue generated from AREAS OF FOCUS: subscriptions and licensing for derivative trading Create world-class capability in trade flow analytics Thousands of daily price assessments Pursue unique benchmarks in new regions and markets Comprehensive coverage Develop exchange relations
Slide 28: 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 29: 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 30: ESG product highlights
ESG product highlights In addition to our focus of increasing investments in ESG technologies & products, we have a strong portfolio of existing products that support global, long-term sustainability • Identifies how ESG performance can affect creditworthiness • Launched Ratings ESG Evaluation and G
Slide 31: ESG awards & recognition
ESG awards & recognition 3BL Corporate Responsibility Magazine's CEO/ACTION| FOR MOTHER pale DIVERSITY & INCLUSION 100 aay BEST ea i mone ES S D 30% Club COMPANIES 2017 GROWTH THROUGH DIVER Uv Dave Thomas Foundation for Adoption. NATIONAL ORGANIZATION ON mg x, Stonew: all DISABILITY DISABILITY ISS Q
Slide 32: Information Security Program & Capabilities
Information Security Program & Capabilities Governance Threat Intel, Monitoring, Policies, Standards, Guidelines Orchestration & Security Exceptions Security Operations Center (SOC) NIST Assessment Incident Response (IR) & Hunting Vendor Risk Management Network Vulnerability Assessment (NVA) Regulat
Slide 33: Barclays Americas Select Franchise Conference
Barclays Americas Ewout Steenbergen CFO Select Franchise Chip Merritt SVP Investor Relations Conference May 15, 2019 Copyright © 2017 by S&P Global. All rights reserved.
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