S&p Global Inc. · NYSE:SPGI
S&p Global — Goldman Sachs U.S. Financial Services Conference 2019
36 slides from S&p Global's conference presentation, Dec 10, 2019
Slide 1: Goldman Sachs U.S. Financial Services Conference
2019 Douglas L. Peterson President and CEO S&P Global Goldman Sachs Martin Fraenkel President U.S. Financial S&P Global Platts Services Conference December 10, 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: 3Q 2019 results by segment
3Q 2019 results by segment Adjusted segment operating Revenue: $1,689 million profit: $910 million $212 $107 Market $488 $167 Intelligence $232 $163 Ratings1 S&P Dow Jones Indices2 $789 $472 Platts ($ in millions) ($ in millions) Notes: Revenue chart excludes corporate revenue and consolidating adju
Slide 6: Consistent revenue growth
Consistent revenue growth Revenue 3-year CAGR: 6% $7,000 $6,258 $6,063 $5,661 $6,000 $5,313 $4,964 $5,000 $4,721 $4,000 $3,000 $2,000 $1,000 $0 2015 2016 2017 2018 3Q YTD 3Q YTD ($ in millions) 2018 2019 6
Slide 7: Adjusting operating profit margin improvement continues
Adjusting operating profit margin improvement continues Adjusted Operating Profit Margin 60% 48.8% 48.5% 50.1% 50.2% 50% 46.5% 42.4% 39.7% 40% 30% 20% 10% 0% 2015 2016 2017 2018 3Q YTD TTM* 3Q YTD 2018 2019 Notes: Beginning in 2016, the Company began excluding deal-related amortization from its non-
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% $10.00 $8.50 $7.50 $6.89 $7.00 $6.28 $5.35 $5.00 $4.69 $2.50 $0.00 2015 2016 2017 2018 3Q YTD 3Q YTD 2018 2019 Note: Beginning in 2016, the Company began excluding deal-related amortization from
Slide 9: 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 10: 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 11: 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 repur
Slide 12: Consistent track record of returning cash to shareholders
Consistent track record of returning cash to shareholders RETURNED $8 Billion $2,163 SINCE START OF 2015 $1,565 $1,503 $1,422 $1,337 Share Repurchases Dividends 2015 2016 2017 2018 3Q YTD ($ in millions) 2019 Note: Shares repurchased are reported on a settlement-date basis 12
Slide 13: 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 14: 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 15: 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) 15
Slide 16: Kensho capabilities integrated to enhance S&P Global product offerings
Kensho capabilities integrated to Enhance S&P Global product offerings Company-wide projects building capabilities across divisions to provide timely, high-quality, comprehensive, and relevant intelligence to clients Currently Implementing Data Ingestion ▪ Omnisearch – Revolutionize usage of the S&P
Slide 17: S&P Global launched domestic credit-rating business in China
On March 26, S&P Global officially launched our domestic credit-rating business in China • First approval for a company wholly owned by an international CRA to rate domestic Chinese bonds • Authorized to rate issuers and issuances from: – Financial institutions – Corporates – Structured finance bond
Slide 18: 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 $3,665 $2,791 $2,400 $1,976 $2,040 $1,487 2015 2016 2017 2018 3Q 2019 ($ in millions) Debt Cash, cash equivalents, restricted cash, and short-term investments 18
Slide 19: 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 20: Ratings financial snapshot
Ratings financial snapshot Revenue Adjusted Operating Profit 3-year CAGR: 6% Margin 56.0% 56.7% 56.1% 57.0% $2,988 $2,883 53.6% $2,428 $2,535 49.6% 47.2% $2,223 $2,286 2015 2016 2017 2018 3Q 3Q 2015 2016 2017 2018 3Q TTM* 3Q YTD YTD YTD YTD 2018 2019 2018 2019 ($ in millions) * 3Q 2019 trailing twel
Slide 21: Global ratings reflect full breadth of ratings spectrum
Global ratings by S&P Global Ratings reflect full breadth of ratings spectrum Bond Ratings (Global Corporates) 2,500 2,081 Number of Issuers 2,000 1,859 1,500 1,413 1,317 1,000 2Q 500 322 216 1Q 8 0 AAA AA A BBB BB B CCC/C 8/31/2019 21
Slide 22: Ratings help investors gauge the risk of default
Ratings help investors gauge the risk of default Global Corporates Cumulative Default Rates 2Q 1Q 1Q 22
Slide 23: 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 24: U.S. corporate debt as a share of U.S. GDP
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 25: S&P Dow Jones Indices financial snapshot
S&P Dow Jones Indices financial snapshot Adjusted Operating Revenue Profit Margin 3-year CAGR: 12% $837 68.0% 69.1% 66.5% 65.6% 66.4% 68.3% 69.7% $728 $684 $638 $621 $597 2015 2016 2017 2018 3Q 3Q 2015 2016 2017 2018 3Q TTM* 3Q YTD YTD YTD YTD 2018 2019 2018 2019 ($ in millions) * 3Q 2019 trailing t
Slide 26: 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 27: Market Intelligence financial snapshot
Market Intelligence financial snapshot Revenue Adjusted Operating Profit 3-year CAGR: 9% Margin $1,833 $1,661 $1,683 35.2% $1,457 34.1% 34.1% $1,405 $1,355 32.1% 32.6% 29.9% 23.9% 2015 2016 2017 2018 3Q 3Q 2015 2016 2017 2018 3Q TTM 3Q ($ in millions) YTD YTD YTD YTD 2018 2019 2018 2019 * 3Q 2019 tr
Slide 28: 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 29: 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 49.1% 49.6% 47.1% 49.4% 50.1% $316 $214 41.2% $774 $815 38.4% $604 $632 $711 $655 2015 2016 2017 2018 3Q 3Q 2015 2016 2017 2018 3Q T
Slide 30: S&P Global Platts
S&P Global Platts Revenue generated from subscriptions and licensing for derivative trading AREAS OF FOCUS: Thousands of daily price assessments Create world-class capability in trade flow analytics Comprehensive coverage across commodity markets Pursue unique benchmarks in new regions and markets D
Slide 31: ESG at S&P Global
ESG at S&P Global Ratings Indices (Fixed Income) (Equity / Passive) • ESG Evaluations • ESG indices • Green Bond Evaluations ESG Data Factory • Thematics/SDG Indices • Public and private • Green Bond Indices company data • Asset-level data Market Intelligence Platts (Corporates, Equity, Fixed Income
Slide 32: 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 33: 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 34: 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 35: ESG awards & recognition
ESG awards & recognition 3BL 100 NATIONAL ORGANIZATION ON DISABILITY PAL Cy § My United Nations Wes Global Compact Corporate Responsibility Prime rated by ISS-oekom> S&P Global Corporate Responsibility Magazine's XX 30% Club GROWTH THROUGH DIVERSITY ISS QualityScore INSTITUTIONAL SHAREHOLOER service
Slide 36: Goldman Sachs U.S. Financial Services Conference
2019 Douglas L. Peterson President and CEO S&P Global Goldman Sachs Martin Fraenkel President U.S. Financial S&P Global Platts Services Conference December 10, 2019 Copyright © 2017 by S&P Global. All rights reserved.
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