Clarivate Plc · NYSE:CLVT
Clarivate — Q1 2020 Earnings Presentation
25 slides from Clarivate's earnings presentation, May 4, 2020
Slide 1: Q1 2020 Earnings Supplemental Materials
Q1 2020 Earnings Supplemental Materials May 4, 2020
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements 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 the future of our business, future plans and strategies, projections, outlook,
Slide 3: Q1 Highlights
Q1 Highlights Well-positioned business model to weather current environment • Completed acquisition of Decision Resources Group (“DRG”); initiated integration activities • Completed integration of Darts-ip within the CompuMark product suite Enhanced • Completed divestiture of brand protection, anti
Slide 4: 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 5: Q1 Financial Highlights
Q1 Financial Highlights… Solid topline growth and cost efficiencies drove double-digit Adjusted EBITDA growth and significant margin expansion March 31, % Excluding ($ in millions except per share data) 2020 2019 Organic(2) Commentary Change Divestitures Recent acquisitions, new business and price i
Slide 6: Q1 Financial Highlights Continued
…Q1 Financial Highlights Continued Significant resources including $308 million in cash and untapped $250 million revolver to continue to invest in strategic growth opportunities March 31, December 31, $ ($ in millions) Commentary on Change 2020 2019 Change Proceeds of $277.5 million received from t
Slide 7: Efficiently Managing Cost Structure and Freeing up Resources
Efficiently Managing Cost Structure and Freeing up Resources Approximately $110 million in permanent cost reductions ($ in millions) Total Savings Permanent Savings Timing NEW $30M $5 million Q1-Q4 2020 COVID related $45 million in 2020; $70-75 Cost savings 2019 $70-$75 million $70-$75 million milli
Slide 8: 2020 Outlook Assumptions
2020 Outlook Assumptions Business Model to Weather Current Environment • “Must-have” products and services focused on B2B markets with unique content • Sell into durable end markets including government, research institutions and life sciences • Solutions to clients on digital basis and Outlook Assu
Slide 9: Updated 2020 Outlook
Updated 2020 Outlook Potential revenue downside offset by tiered cost reduction approach leading to no change to Adjusted EBITDA, Adjusted EPS, Adjusted Free Cash Flow ($ in millions, except per share information) Prior Outlook Updated Outlook Low High Low High Adjusted Revenue $1,160 $1,190 $1,130
Slide 10: Historical Annualized Contract Value (ACV)
Historical Annualized Contract Value (ACV)(1) ($ in millions) • Q1 ’20 includes the acquisition of Decision Resources Group (“DRG”) completed on February 28, 2020 • All periods exclude divested products at actual F/X; divested on January 1, 2020 $820 + $104 mm YoY + 15% constant f/x Ongoing ACV +3%
Slide 11: Appendix
Appendix 11
Slide 12: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures This presentation contains financial measures which have not been calculated in accordance with GAAP, including Adjusted Revenues and Adjusted EBITDA, because they are a basis upon which our management assesses our performance and we believe they r
Slide 13: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures The use of Adjusted EBITDA instead of GAAP measures has limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results of operations and operating cash flows as
Slide 14: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Adjusted Net Income and Adjusted Diluted EPS We have begun to use Adjusted Net Income and Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS") in our analysis of the financial performance of the Company. We believe Adjusted Net Income and A
Slide 15: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Free Cash Flow and Adjusted Free Cash Flow We use free cash flow and adjusted free cash flow in our operational and financial decision-making and believe free cash flow and adjusted free cash is useful to investors because similar measures are freq
Slide 16: Quarterly Financial Summary
Quarterly Financial Summary ($ in millions) Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Revenues, net $243.3 $242.9 $245.2 $234.0 $242.3 $243.0 $255.0 $240.6 Deferred revenue adjustment $0.9 $0.5 $0.2 $0.2 $0.1 $0.1 $0.1 $1.9 IPM Product Line ($5.8) ($7.8) $- $- $- $- $- $- Adjus
Slide 17: Diluted Share Count
Diluted Share Count 9 @$20 @$21 @$22 @$23 @$24 @$25 Comments Enterprise Value Build (Forecasted as of and for the year ended Note: the analysis is not intended to replace the Treasury Stock December 31, 2020, $ in millions except for per Method as required under ASC 260, Earnings per Share share val
Slide 18: Thank You
\ S Clarivate Analytics Thank You
Slide 19: 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. Variance
Slide 20: 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 Revenue, Net $
Slide 21: 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 March 31, 2020 1. In 2020, this is related to a new transition services agreement and offset by the reverse transit
Slide 22: Reconciliation of Non-GAAP Financial Measures and Required Reported Data
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Reconciliation Descriptions ($ in millions, except per share amounts) March 31 Adjusted Net Income and Adjusted Diluted EPS adjustments QTD 2020 1. In 2020, this is related to a new transition services agreement and offset by t
Slide 23: Non GAAP Reconciliation – Operating Cash Flow to Free Cash Flow
Non GAAP Reconciliation – Net Cash Provided By (Used In) Operating Activities to Free Cash Flow and Adjusted Free Cash Flow Descriptions Reconciliation Three Months Ended March 31, Free Cash Flow and Adjusted Free Cash Flow Adjustments ($ in million) 1. Includes cash payments to Thomson Reuters unde
Slide 24: Non GAAP Reconciliation – Revenues, Net to Adjusted Revenues
Non GAAP Reconciliation – Revenues, Net to Adjusted Revenues Reconciliation Year Ending December 31, 2020 Descriptions (Forecasted) Adjusted Revenues, net Adjustments ($ in millions) Low High 1. The Company is evaluating the purchase accounting impact, including the deferred revenue adjustment, rela
Slide 25: Non GAAP Reconciliation – Net Loss Per Share to Adjusted Diluted EPS
Non GAAP Reconciliation – Net Loss Per Fully Diluted Weighted Shares Outstanding to Adjusted Diluted EPS Year Ending December 31, 2020 Descriptions Reconciliation (Forecasted) Adjusted Diluted EPS Adjustments (in millions, except per share amounts) Low High Per Share Per Share 1. Includes restructur