Transunion · NYSE:TRU

Transunion — Q4 2022 Earnings Presentation

29 slides from Transunion's earnings presentation, Feb 14, 2023

  1. Slide 1: Fourth Quarter 2022 Earnings

    Fourth Quarter 2022 Earnings Chris Cartwright, President and CEO Todd Cello, CFO February 14, 2023

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion’s management and are subject to significant risks and uncertai

  3. Slide 3: Agenda

    1 Economic perspectives and financial highlights 2 Acquisition integration and transformation progress 3 Fourth quarter 2022 financial results 4 First quarter and full-year 2023 guidance © 2023 TransUnion LLC All Rights Reserved | 3

  4. Slide 4: Economic conditions across TransUnion's markets

    Economic conditions across TransUnion’s markets International U.S. consumer emerging markets employment remains Lending customers stronger than Persistent inflation high; however, increasingly cautious developed; attractive and high interest spending moderating, given market pressures growth across

  5. Slide 5: Fourth quarter 2022 highlights

    Fourth quarter 2022 highlights Organic constant currency Adjusted 2% organic revenue growth EBITDA margin up ~110bps excluding U.S. mortgage and Neustar margin continuing to scale Double-digit International Acquisitions finished year Divestiture of G2, LCI and revenue growth, led by strongly, includ

  6. Slide 6: TransUnion delivered strong results despite a softening macro environment

    TransUnion delivered strong results despite a softening macro environment 2022 highlights: 7% organic revenue Strong organic Adjusted Prudent capital growth excluding EBITDA margins due to deployment: attractive mortgage impact with revenue flow-through and entry multiple for Argus double-digit grow

  7. Slide 7: Neustar enters 2023 with increasing momentum

    Neustar enters 2023 with increasing momentum • All three product lines contributed to Q4 revenue growth, Financial results including ~9% Marketing growth ► Q4 2022: 8% revenue – TransUnion and Neustar marketing solutions combined generated growth with Adjusted ~$300M revenues in 2022, up ~10% EBITDA

  8. Slide 8: Sontiq and Argus delivered good performance

    Sontiq and Argus delivered good performance Sontiq Argus • 8% revenue growth in Q4 and FY • -3% revenue decline in Q4; +2% for 2022 FY 2022  New wins and growing sales pipeline  In-line with expectations as Argus lapped support strong 2023 growth several one-time deals in Q4 2021 • Adjusted EBITDA

  9. Slide 9: Global enablement platform continuing to develop, facilitating acquisition integrations

    Global enablement platform continuing to develop, facilitating acquisition integrations Technology Operations Completed cloud foundation, migrated over Doubled Global Capability Center (GCC) 30 core applications and closed 8 data employees from ~1,800 to ~4,000 centers Rolled out sales and operation

  10. Slide 10: Consolidated fourth quarter 2022 highlights

    Consolidated fourth quarter 2022 highlights Reported Y/Y ($M) Change Revenue $902 14% ►Organic constant currency revenue growth, excluding Constant Currency Revenue 17% mortgage, of +2% Organic Constant Currency Revenue (2)% ►Adjusted EBITDA margin of Adjusted EBITDA $321 14% 35.6%; organic constant

  11. Slide 11: U.S. Markets fourth quarter 2022 highlights

    U.S. Markets fourth quarter 2022 highlights ►U.S. Markets organic revenue growth (ex- Organic mortgage) of +3% Reported Reported FX Inorganic Constant ($M) Y/Y Impact Impact Currency ►U.S. Financial Services organic revenue growth (ex- Revenue $593 23% — (28)% (4)% mortgage) of +2%, led by auto, wit

  12. Slide 12: Consumer Interactive fourth quarter 2022 highlights

    Consumer Interactive fourth quarter 2022 highlights ►Excluding impact from prior year one-time breach-related revenues, organic revenue Organic Reported Reported FX Inorganic declined -5% Constant ($M) Y/Y Impact Impact Currency ►Direct channel revenue declined due to reduced Revenue $141 (2)% — (11

  13. Slide 13: International fourth quarter 2022 highlights

    International fourth quarter 2022 highlights Reported Reported FX Inorganic Constant ($M) Y/Y Impact Impact Currency Revenue $188 2% 10% — 12% ►India revenue growth driven Canada 32 0% 8% — 8% by consumer, commercial, Latin America 28 5% 7% — 12% fraud and direct-to-consumer U.K. 48 (17)% 12% — (5)%

  14. Slide 14: Remain committed to deleveraging; now targeting <3x Leverage Ratio

    Remain committed to deleveraging; now targeting <3x Leverage Ratio over long-term Leverage Ratio1 4.3x 4.1x 3.9x 3.8x 3.4x 3.5x 3.5x <3.5x 3.1x 3.1x <3.0x 2015 IPO 2015 2016 2017 2018 2019 2020 2021 2022 2023F 2024F • Roughly $5.7 billion of debt and $585 million cash at quarter-end • $600M in debt

  15. Slide 15: Maintaining ~70%/30% fixed/floating rate exposure with new swap

    Maintaining ~70%/30% fixed/floating rate exposure with new swap; higher 2023 interest expense due to rising rates Debt Profile (12/31/22) 2023 Interest Expense Bridge Notional Expiry Rate ($B) ~($8M) Term Loan Tranche ~$20M Term Loan A-3 1.0 Dec’24 LIBOR + 1.75% Term Loan B-5 2.2 Nov’26 LIBOR + 1.75

  16. Slide 16: First quarter 2023 guidance

    First quarter 2023 guidance Reported Revenue: $908M to $917M (1)% to flat ► Revenue: Toughest YoY Assumed M&A contribution: ~2pt. benefit quarterly comparison Assumed FX contribution: ~(1)pt. headwind Organic Constant Currency Revenue: (2)% to (1)% Assumed mortgage impact: ~(2)pt. headwind Organic C

  17. Slide 17: Full-year 2023 revenue guidance

    Full-year 2023 revenue guidance Reported Revenue: $3.825B to $3.885B +3% to +5% Market Assumptions Assumed M&A contribution: ~1pt. benefit ► Current slower economic Assumed FX contribution: ~(1)pt. headwind conditions persist Organic Constant Currency Revenue: +3% to +5% ► U.S. mortgage: Expect Assu

  18. Slide 18: Full-year 2023 Adjusted EBITDA, Adjusted Diluted EPS and other guidance

    Full-year 2023 Adjusted EBITDA, Adjusted Diluted EPS and other guidance Adjusted EBITDA: $1.388B to $1.421B +3% to +6% Assumed FX contribution: ~(1)pt. headwind Adjusted EBITDA margin 36.3% to 36.6% Adjusted EBITDA margin bps change: Flat to +30bps ► Committed to deleveraging and using excess cash f

  19. Slide 19: Bridge to 2023 Adjusted EBITDA margin guidance

    Bridge to 2023 Adjusted EBITDA margin guidance ~(45)bps ~100bps ~(25)bps 36.6% 36.3% 2022 Adjusted EBITDA Impact of Argus Neustar revenue and Revenue flow-through 2023 Adjusted EBITDA margin inorganic contribution integration benefits offset by higher variable margin (High-End) in Q1 2023 compensati

  20. Slide 20: 2025 Targets

    $5+ billion Revenue 2025 $2+ billion Adjusted EBITDA Targets $6.00+ Adjusted Diluted EPS © 2023 TransUnion LLC All Rights Reserved | 20

  21. Slide 21: Q&A

    Q&A © 2023 TransUnion LLC All Rights Reserved | 21

  22. Slide 22: Appendices: Non-GAAP Reconciliations

    Appendices: Non-GAAP Reconciliations © 2023 TransUnion LLC All Rights Reserved | 22

  23. Slide 23: Adjusted EBITDA and Adjusted EBITDA Margin

    Adjusted EBITDA and Adjusted EBITDA Margin Three Months Ended Twelve Months Ended As a result of displaying amounts in millions, rounding differences may exist in the tables and footnotes. $ in millions December 31, December 31, 1. Consisted of stock-based compensation, including amounts which are c

  24. Slide 24: Adjusted Net Income and Adjusted EPS

    Adjusted Net Income and Adjusted EPS Three Months Ended Twelve Months Ended As a result of displaying amounts in millions, rounding differences may exist in the table and footnotes. $ in millions, except per share data December 31, December 31, 1. Consisted of stock-based compensation, including amo

  25. Slide 25: Adjusted Diluted EPS

    Adjusted Diluted EPS Three Months Ended Twelve Months Ended December 31, December 31, 2022 2021 2022 2021 Reconciliation of diluted earnings per share from net income attributable to TransUnion to Adjusted Diluted Earnings per Share: Diluted earnings per common share from: Net income attributable to

  26. Slide 26: Adjusted Effective Tax Rate

    Adjusted Effective Tax Rate Three Months Ended Twelve Months Ended As a result of displaying amounts in millions, rounding differences may exist in the $ in millions December 31, December 31, table. 2022 2021 2022 2021 1. Tax rates used to calculate the tax expense impact are based on the nature of

  27. Slide 27: Leverage Ratio

    Leverage Ratio Twelve Months Ended $ in millions December 31, June 30, 2022 2021 2020 2019 2018 2017 2016 2015 2015 Reconciliation of net income (loss) attributable to TransUnion to Adjusted EBITDA: Net income (loss) attributable to TransUnion $ 269.5 $1,387.1 $ 343.2 $ 346.9 $ 276.6 $ 441.2 $ 120.6

  28. Slide 28: Leverage Ratio (cont.)

    Leverage Ratio (cont.) As a result of displaying amounts in millions, rounding differences may exist in the table above. 1. Results prior to 2019 include our Healthcare business, which was divested in 2021. The results of the Healthcare business are classified as discontinued operations for 2019 thr

  29. Slide 29: Adjusted EBITDA and Adjusted EPS Guidance

    Adjusted EBITDA and Adjusted EPS Guidance Three Months Ended Twelve Months Ended $ in millions, except per share data March 31, 2023 December 31, 2023 As a result of displaying amounts in millions, rounding differences may exist in the table above. Low High Low High 1. These adjustments include the

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