Clarivate Plc · NYSE:CLVT
Clarivate — Investor Presentation (June 2020)
29 slides from Clarivate's investor presentation, Jun 1, 2020
Slide 1: Investor Presentation
NYSE: CCC Investor Presentation June 1, 2020
Slide 2: Legal Disclaimer and Confidentiality Notice
Legal Disclaimer and Confidentiality Notice This presentation and the information contained herein (including the verbal information and discussion related to these materials) is restricted and highly confidential and was prepared from information supplied by Clarivate Plc (formerly known as Clariva
Slide 3: Key Management Presenters
Key Management Presenters Jerre Stead Richard Hanks Mark Donohue Executive Chairman & Chief Financial Officer VP, Investor Relations Chief Executive Officer 3
Slide 4: Equity offering summary
Equity offering summary Summary terms Issuer (exchange / ticker) Clarivate Plc (NYSE: CCC) Offering size 40.0mm shares (14.0mm primary and 26.0mm secondary shares) or $916mm (based on current share price(1)) Greenshoe 6.0mm shares (15%) (100% Secondary) Onex and Baring Private Equity Asia (“BPEA”) t
Slide 5: Business Overview
Business Overview | 6a
Slide 6: Clarivate has world-leading assets serving large and stable end-markets
Clarivate has world-leading assets serving large and stable end-markets • Leading provider of intellectual property and scientific information, analytical tools & services • Products support customers’ critical decisions in discovery, protection and commercialization of ideas and brands • Global, di
Slide 7: Path to continued long-term profitable growth remains clear
Path to continued long-term profitable growth remains clear Highly recurring subscription revenue with Recurring revenue high retention and revenue visibility + profitable Significant operating leverage from ‘build incremental growth once, sell many times’ = strong cash flow Low capital requirements
Slide 8: High quality products embedded with customer workflows
High quality products embedded with customer workflows A professor planning a research program accesses Web of Science {"WOS"} to evaluate the current state of research in her discipline, identifying trends within highly regarded and relevant academic journals A university provost evaluating her uni
Slide 9: We have four strategic goals that will move us toward success
We have four strategic goals that will move us toward success Continue to Further increase improve colleague customer delight score engagement score Sustainability Provide superior Focus on investor returns strong top-and- bottom-line growth 9
Slide 10: Improving customer delight scorecard reflects our commitment on delivering high-value to our customers
Improving customer delight scorecard reflects our commitment on delivering high-value to our customers May ‘20 2019 Information & insights 90 85 Quality of products & services 85 86 Overall Easy to do business with 59 55 customer delight = 79 Overall customer delight 79 76 (Best Practice is 82) Cust
Slide 11: Our recent colleague engagement survey had a response rate of 91%
Our recent colleague engagement survey had a response rate of 91%, up 10% from 2019 Engagement score = 76 2019 = 69 (Benchmark Average is 72) 2020 goal: 74 Company’s response to COVID-19 scored 93% favorable 11
Slide 12: Technology has a very important role at Clarivate
Technology has a very important role at Clarivate Customer and company growth Optimizing Providing Enabling day-to-day Protecting solutions to product operations in a our systems, drive value for innovation cost-effective data and IP our customers way People Process Technology 12
Slide 13: Revenue is balanced by category, offering steady, long-term growth potential
Revenue is balanced by category, offering steady, long-term growth potential Last Twelve Months Ended March 31, 2020 Revenue by Category (1) By product group By type By geography Transactional and APAC Consulting Services 24% 18% Intellectual Property AmericasAmericas Product Group Science Product 4
Slide 14: Historical Annualized Contract Value (ACV)
Historical Annualized Contract Value (ACV)(1) • Q1 ’20 includes the acquisition of Decision Resources Group (“DRG”) completed on February 28, 2020 • All periods exclude divested MarkMonitor Brand Protection product lines at actual F/X; divested on January 1, 2020 ($ in millions) $820 +$104mm YoY +15
Slide 15: Outward focus on customers expected to drive organic revenue
Outward focus on customers expected to drive organic revenue Sales force expansion Inside Consulting sales and global business Pricing centers Retention rate Improve product UI and UX 15
Slide 16: Streamlining initiatives will help us to work smarter, scale quickly to achieve margin expansion
Streamlining initiatives will help us to work smarter, scale quickly to achieve margin expansion Headcount optimization Facilities rationalization Insource application development Re-platform with AI and machine learning Vendor rationalization renegotiation 16
Slide 17: Efficiently Managing Cost Structure and Freeing Up Resources
Efficiently Managing Cost Structure and Freeing Up Resources Approximately $110 million in expected permanent cost reductions ($ in millions) Total Savings Permanent Savings Timing New COVID Related $30 million $5 million Q1 – Q4 2020 $45 million in 2020; $70-75 million Costs Savings 2019(1) $70-$75
Slide 18: Clarivate philosophy – capital allocation and return
Clarivate philosophy – capital allocation and return • Investing in: – Business transformation – Ongoing product and platform enhancements • Cash allocated to reducing leverage • Cash allocated to accretive M&A – Tuck-in acquisitions focused on proprietary databases servicing global markets – Scaled
Slide 19: The Clarivate way
As we build on our solid foundation, there are very large opportunities ahead • Business model with strong financial attributes • Fundamental assets are unmatched anywhere • Embedded in customers’ critical core workflows The Clarivate way • Strong, purpose-based culture in place • Multiple initiativ
Slide 20: Financial & Strategic Highlights
Financial & Strategic Highlights
Slide 21: Q1 Highlights
Q1 Highlights Well-positioned business model to weather current environment • Completed acquisition of Decision Resources Group (“DRG”) in February 2020; initiated integration activities • Completed integration of Darts-ip within the CompuMark product suite Enhanced • Completed divestiture of brand
Slide 22: Q1 Results
Q1 Results Revenue growth driven by acquisitions, new business and pricing; excluding divestitures adjusted revenue increased 11%(1) Reported Revenue Adjusted Revenue(1) Adjusted EBITDA(1) +3% actual f/x +4% actual f/x Adjusted EBITDA +4% constant f/x +4% constant f/x Margin(2) 32.2% up 690 basis po
Slide 23: Business Model to Weather Current Environment
Business Model to Weather Current Environment • “Must-have” products and services focused on B2B markets with unique content • Sell into durable end markets including government, research institutions and life sciences • Solutions to clients on digital basis and consumed anywhere • Highly resilient
Slide 24: Appendix
Appendix 24
Slide 25: Presentation of certain non-GAAP financial measures
Presentation of certain non-GAAP financial measures This presentation contains financial measures which have not been calculated in accordance with GAAP, including Adjusted Revenues and Adjusted EBITDA, because they are a basis upon which our management assesses our performance and we believe they r
Slide 26: Presentation of certain non-GAAP financial measures (continued)
Presentation of certain non-GAAP financial measures (continued) Standalone Adjusted EBITDA We are required to report Standalone Adjusted EBITDA pursuant to the reporting covenants contained in the Credit Agreement and the Indenture. Standalone Adjusted EBITDA is substantially similar to Consolidated
Slide 27: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data • The following tables present the amounts of our subscription and transactional revenues, including as a percentage of our total revenues, for the periods indicated, as well the drivers of the variances between periods. Varian
Slide 28: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Reconciliation Descriptions ($ in millions) March 31 Adjusted Revenue and Adjusted EBITDA adjustments QTD 2020 QTD 2019 1. In 2020, this is related to a new transition services agreement and offset by the reverse transition ser
Slide 29: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Reconciliation Descriptions Adjusted revenue and Adjusted EBITDA adjustments ($ in millions) Last Twelve Months 1. In 2020, this is related to a new transition services agreement and offset by the reverse transition services ag