S&p Global Inc. · NYSE:SPGI
S&p Global — Q3 2023 Earnings Presentation
33 slides from S&p Global's earnings presentation, Nov 2, 2023
Slide 1: S&P Global Quarterly Update 3Q 2023
3Q 2023 S&P Global Quarterly Update November 2, 2023 1
Slide 2: 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 Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in for
Slide 3: Comparison of adjusted information to U.S. GAAP information
Comparison of adjusted information to U.S. GAAP information This presentation includes Company financials on an as-reported basis, and on a pro forma basis as if The Company’s non-GAAP measures include adjustments that reflect how management views our the merger had closed on January 1, 2021, for pe
Slide 4: European regulations affecting investors in credit rating agencies
European regulations affecting investors in credit rating agencies European Union Regulation 1060/2009 (as amended) applies to credit rating agencies Any person obtaining direct or indirect ownership or control of 5% or more or 10% (CRAs) registered in the European Union (“EU”) and therefore to the
Slide 5: Quarterly Update Call Presenters
Quarterly Update Call Presenters Doug Ewout Mark Peterson Steenbergen Grant President and CEO Executive Vice Senior Vice President, President and CFO Investor Relations 5
Slide 6: Strategy, Vision, and Execution
Strategy, Vision, and Execution Doug Peterson President and CEO 6
Slide 7: Third quarter highlights
Third quarter highlights Financial highlights1 Additional highlights Adjusted revenue, excluding Engineering Solutions Multiple new product launches leveraging shared increased 11% year over year technology and differentiated data assets across divisions Revenue growth accelerated in every division
Slide 8: Customer at the Core, Grow & Innovate, Lead & Inspire
Customer at the Core Grow & Innovate Data & Technology Lead & Inspire Execute & Deliver 8
Slide 9: Customer focus drove accelerating growth
Customer at the Core Customer focus drove accelerating growth Commercial conditions Customer value Stable sales cycles, larger deals, S&P Global adds value in times of and strong competitive position uncertainty, evidenced by high across multiple divisions retention rates and strong customer wins in
Slide 10: Issuance growth driven by Bank Loans & High-Yield
Customer at the Core Issuance growth driven by Bank Loans & High-Yield Billed issuance up 21% Updates on market conditions ($ in billions) $570 Credit spreads tightened in Q3 $472 $211 Refinancing activity driving $218 majority of issuance $65 Investment Grade $28 Activity in Loans strengthened by H
Slide 11: Product investments drive outsized growth
Grow & Innovate Product investments drive outsized growth Vitality revenue Key contributors of Vitality revenue Vitality revenue, CARFAX Car Listings (Mobility) which is revenue from new or Energy Transition and Climate Products (CI) enhanced products, Pricing, Valuations and Reference Data (MI) gre
Slide 12: New products leverage cross-divisional assets and AI
Grow & Innovate New products leverage cross-divisional assets and AI Vehicle data on Marketplace1 Platts Connect2 Entity Insights3 Mobility is collaborating with Launched Platts Connect, a Launched Entity Insights, Market Intelligence to deliver web/mobile-based application combining Sustainable1 da
Slide 13: Customer-focused innovation drives acceleration in Sustainability and Energy Transition
Grow & Innovate Customer-focused innovation drives acceleration in Sustainability and Energy Transition Customer needs S&P Global innovation Shareholder value • High-quality raw data to support • Trucost climate data, and raw data on • Trucost revenue increased 55% y/y internal sustainability framew
Slide 14: Revenue growth across all five divisions
Execute & Deliver Revenue growth across all five divisions 1 3Q’23 Revenue TTM Adjusted TTM Adjusted Financial Performance Growth 2 Operating Margin 3 Operating Margin Y/Y 3 +8% 32.3% +140 bps +20% 55.4% (250) bps +11% 46.2% +240 bps +10% 39.0% (100) bps +6% 68.0% (80) bps Total S&P Global +8%4 45.2
Slide 15: 2023 economic factors facing the Company
2023 economic factors facing the Company Macroeconomic Environment: + Global supply chain alleviation – Economic slowdown and geopolitical risk +/– Uncertainty in banking end market Equity Markets: + Continued flows from active to passive +/– Sustained heightened volatility Difficult year-over-year
Slide 16: Billed issuance outlook stable into Q4
Billed issuance outlook stable into Q4 2023 S&P Global Ratings +5% +7% billed issuance assumption 2023 global market -2% +6% issuance forecast1 +2.6% Forecast S&P Global Ratings billed issuance includes Global market issuance forecast is a the impact of levered loans, and excludes product of the S&P
Slide 17: Financial Strategy and Guidance
Financial Strategy and Guidance Ewout Steenbergen Executive Vice President and CFO 17
Slide 18: Strong Enterprise financial results in Q3
Strong Enterprise financial results in Q3 Revenue 1, 2 Adjusted Operating Profit & Expense 1, 3 ($ in millions) ($ in millions) y/y y/y $3,084 $3,084 $2,862 $354 6% $2,862 $334 $379 10% $346 $1,450 10% $1,318 Indices $479 11% $432 Mobility 45.2% 41.2% Commodity Insights Adjusted Operating Profit 46.
Slide 19: Accelerating revenue growth in all three strategic investment areas
Accelerating revenue growth in all three strategic investment areas Sustainability & Private Market Vitality Energy Transition 1 Solutions 2 Revenue 3 ($ in millions) ($ in millions) ($ in millions) +36% +18% +22% $109 $369 $78 $93 $303 $58 Vitality 12.0% Index4 10.9% 3Q '22 3Q '23 3Q '22 3Q '23 3Q
Slide 20: Cost synergies near completion, revenue synergies on track
Cost synergies near completion, revenue synergies on track Cost Synergies Revenue Synergies ($ in millions) ($ in millions) Targeting $600 million Targeting $350 million run-rate in 2023 run-rate in 2026 $350 $588 $600 Targeting 85% achieved Targeting 45% achieved in 2023 in 2024 $112 Achievement th
Slide 21: Synergies and portfolio optimization offset the majority of expense growth
Synergies and portfolio optimization offset the majority of expense growth year over year Total Adjusted Expenses1 ($ in millions) 3Q2022 3Q2023 1. Refers to non-GAAP adjusted expenses in the current period and the year-ago period 21
Slide 22: S&P Global Market Intelligence
S&P Global Market Intelligence Revenue 1 Adjusted Operating Profit & Expense 1, 2 ($ in millions) ($ in millions) y/y y/y $1,099 $1,099 $1,017 $1,017 $366 6% $277 5% $264 $345 Desktop 33.9% 33.3% $343 9% Data & Advisory Solutions $315 Adjusted Operating Profit Enterprise Solutions Adjusted Expense $
Slide 23: S&P Global Ratings
S&P Global Ratings Revenue Adjusted Operating Profit & Expense3 ($ in millions) ($ in millions) y/y y/y $819 1 $819 5% $681 $121 $681 $55 13% $115 $104 34% 22% CRISIL, Other 2 $48 $464 Governments $78 $126 10% $381 Structured Finance $114 Adjusted Operating Profit 56.6% 55.9% Financials Adjusted Exp
Slide 24: S&P Global Commodity Insights
S&P Global Commodity Insights Revenue Adjusted Operating Profit & Expense 1 ($ in millions) ($ in millions) y/y y/y $479 $479 $432 $45 33% $432 Advisory and $34 $101 2% 17% Transactional Services $98 $198 $232 Upstream Data and Insights Adjusted Operating Profit 45.8% 48.4% Price Assessments $148 $1
Slide 25: S&P Global Mobility
S&P Global Mobility Revenue Adjusted Operating Profit & Expense 1 ($ in millions) ($ in millions) y/y y/y $379 $379 $346 $346 $66 9% $61 $160 10% $146 $88 4% $85 42.4% 42.2% Financials and Other Adjusted Operating Profit Manufacturing Adjusted Expense $219 10% $200 Dealer Adjusted Operating Margin $
Slide 26: S&P Dow Jones Indices
S&P Dow Jones Indices Revenue Adjusted Operating Profit & Expense 1 ($ in millions) ($ in millions) y/y y/y $354 $354 $334 $334 $71 2% $69 Data & Custom $55 $66 18% $246 5% Subscriptions $234 Exchange-Traded Adjusted Operating Profit 70.3% 69.4% Derivatives Adjusted Expense Asset-Linked Fees Adjuste
Slide 27: 2023 macroeconomic assumptions underlying guidance
2023 macroeconomic assumptions underlying guidance Real GDP United States Brent Crude 3 Global Market Growth 1 CPI 2 Debt Issuance 4 +3.1% +4.1% $84 +2.6% Global Average Per Barrel Range (-1.6% to 6.1%) United States +2.3% Eurozone +0.6% China +4.8% 1. S&P Global Ratings Economic Research - Global E
Slide 28: 2023 GAAP guidance
2023 GAAP guidance Previous Current Revenue Growth 10% - 12% 10% - 12% Operating Profit Margin 34.0% - 35.0% 34.5% - 35.5% Diluted EPS $8.65 - $8.85 $8.75 - $8.90 Indicates a change from prior guidance 28
Slide 29: 2023 adjusted guidance
2023 adjusted guidance Actual Contribution Previous Adjusted 1 Current Adjusted 1 from ES Revenue Growth 4.0% - 6.0% 4.5% - 5.5% $133 million Operating Profit Margin 45.5% - 46.5% 45.5% - 46.5% Diluted EPS2 $12.35 - $12.55 $12.50 - $12.60 Indicates a change from prior guidance 1. Expected growth com
Slide 30: Updated 2023 division revenue outlook
Updated 2023 division revenue outlook Previous 2023 Current 2023 Revenue Growth 1 Revenue Growth 1 6.0% - 8.0% 6.5% - 7.5% 5.0% - 7.0% 6.0% - 8.0% 7.5% - 9.5% 8.5% - 9.5% 8.5% - 10.5% 9.0% - 10.0% 2.0% - 4.0% 2.0% - 4.0% Indicates a change from prior guidance 1. For Market Intelligence, Commodity In
Slide 31: Updated 2023 division operating margin outlook
Updated 2023 division operating margin outlook Previous 2023 Adjusted Current 2023 Adjusted Operating Operating Profit Margin Outlook 1 Profit Margin Outlook 1 33.5% - 34.5% 33.5% - 34.5% 56.0% - 57.0% 56.0% - 57.0% 46.0% - 47.0% 46.0% - 47.0% 38.5% - 39.5% 38.5% - 39.5% 67.5% - 68.5% 68.0% - 69.0%
Slide 32: 3Q 2023 Earnings Call
3Q 2023 Earnings Call Doug Peterson Martina Cheung President and CEO President, S&P Global Ratings and Executive Lead, Sustainable1 Ewout Steenbergen Executive Vice President and CFO Mark Grant Senior Vice President, Investor Relations November 2, 2023 32
Slide 33: 3Q 2023 Earnings Call
3Q 2023 Earnings Call Doug Peterson REPLAY OPTIONS President and CEO Internet: Replay available for one year Ewout Steenbergen Go to http://investor.spglobal.com Executive Vice President and CFO Mark Grant Telephone: Replay available through December 2, 2023 Senior Vice President, Investor Relations