Slide 1: 4Q2018 Earnings Presentation
4Q2018 Earnings Presentation February 19, 2019 © 2019 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures
4Q2018 Earnings Presentation Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures Forward-Looking Statements This release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainti
Slide 3: Business and Financial Highlights
4Q2018 Earnings Presentation Business and Financial Highlights • Normalizing for the revenue associated with exceptional storm activity in the prior year period, organic constant currency revenue grew 6.9% and organic constant currency adjusted EBITDA grew 7.3% • Solid growth in our Insurance and En
Slide 4: Financial Summary
4Q2018 Earnings Presentation Financial Summary (in $ millions, except per share Three months ended December 31st Subscription/Long-term Revenue amounts) 2018 2017 % change Revenue $ 614 $ 570 7.7% 80% 81% 2018 2017 Adjusted EBITDA 289 273 6.1% Net Income 146 205 (28.5)% Adjusted Net Income 174 223 (
Slide 5: Organic Constant Currency Growth and Adjusted EBITDA Margins
4Q2018 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins 4Q17 4Q18 2017 2018 Total Organic Revenue Adjusted EBITDA Norm. Revenue (1) 5.9% 6.9% 4.2% 7.2% Margin (2,3) Margin (3) Norm. Adj. EBITDA (1) 3.1% 7.3% 2.5% 7.7% 8.9% 8.2% 52% 7.4% 7.4% 7.4% 7.0% 7.0% 6.1% 6.3%
Slide 6: Segment Trends
4Q2018 Earnings Presentation Segment Trends Insurance Energy Financial Organic Constant Currency Revenue Growth Organic Constant Currency Adjusted EBITDA Growth 16.0% 10.2% 9.1% 7.2% 7.2% 7.8% 9.2% 6.5% 6.4% 7.2% 5.8% 4.9% 4.7% 5.1% 4.5% 4.6% 1.2% 1.9% 4.2% 1.4% -1.7% flat -0.1% -6.2% -1.8% -7.8% -2
Slide 7: Segments
Segments © 2019 2017 Verisk Analytics, Inc. All rights reserved. 7
Slide 8: Insurance
4Q2018 Earnings Presentation Insurance Industry-leading data analytics and insights Underwriting & Rating Solutions Claims Solutions Industry-standard insurance programs Integrated analytics solutions for improving Property-specific underwriting & rating info claims outcomes and fighting fraud at ev
Slide 9: Insurance Quarterly Performance
4Q2018 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights % change (in $ millions) Organic • UW & Rating growth driven by solid performance in 4Q18 4Q17 Reported Organic CC commercial lines, personal lines and catastrophe modeling UW & Rating $ 289.9 $ 269.8 7.4% 6.
Slide 10: Energy and Specialized Markets
4Q2018 Earnings Presentation Energy and Specialized Markets Unique insight on the world’s energy resources and intelligent compliance solutions Energy Specialized Markets Energy and natural resources solutions across Improving our understanding of the global Research & Analytics and Advisory Service
Slide 11: Energy & Specialized Markets Quarterly Performance
4Q2018 Earnings Presentation Energy & Specialized Markets Quarterly Performance Financials Business Highlights % change • Organic revenue growth driven by WoodMac consulting and (in $ millions) Organic 4Q18 4Q17 Reported Organic research as well as our environmental health & safety and CC weather &
Slide 12: Financial Services
4Q2018 Earnings Presentation Financial Services Powerful information, analytics, and data management solutions Portfolio Analytics, Regulatory Data Management, and Marketing Credit Risk Management, Fraud, and Abuse Solutions for financial institutions, including competitive benchmarking, decisioning
Slide 13: Financial Services Quarterly Performance
4Q2018 Earnings Presentation Financial Services Quarterly Performance Financials Business Highlights % change • Organic constant currency revenue declined 2.2% as growth (in $ millions) Organic in Portfolio Management solutions and Spend Informed 4Q18 4Q17 Reported Organic CC Revenue $ 47.5 $ 48.4 -
Slide 14: Cash Flow and Capital
Cash Flow and Capital © 2019 2017 Verisk Analytics, Inc. All rights reserved. 14
Slide 15: Cash Flow Utilization
4Q2018 Earnings Presentation Cash Flow Utilization (in $ millions) 2015 (1) 2016 (1,2) 2017 2018 4Q17 4Q18 Net cash provided by operating activities $ 591M $ 656M $ 744M $ 934M $152M $173M Capital expenditures (139) (146) (184) (231) (70) (76) Free cash flow (FCF) 452 510 560 703 82 97 Acquisitions,
Slide 16: Capital Structure
4Q2018 Earnings Presentation Capital Structure as of 12/31/2018 (in $ millions) Bonds $2,300 Revolver Drawn 415 Total Debt $2,715 Revolver due 1,085 May 2022 Debt/EBITDA (1) 2.3x Covenant level (2) 3.5x Investment Grade Ratings S&P: BBB (Jan-2019: upgraded from BBB-) Moody’s: Baa2 (May-2018: upgrade
Slide 17: Capital Management Philosophy
4Q2018 Earnings Presentation Capital Management Philosophy Focused on Value Creation and Improving ROIC • Understand and optimize operating capital generation • Identify internal and external investment opportunities • Compare estimated returns on invested capital relative to risk- weighted WACC • C
Slide 18: Appendix: Supplemental Slides and Non-GAAP Reconciliations
Appendix: Supplemental Slides and Non-GAAP Reconciliations © 2019 2017 Verisk Analytics, Inc. All rights reserved. 18
Slide 19: Segment Mapping
4Q2018 Earnings Presentation Segment Mapping Previous Segmentation New Segmentation Decision Risk Energy Financial Key Solutions Insurance Analytics Assessment & Spec. Mrkts. Services ISO Solutions A F Underwriting C B F Claims Analytics C G AIR Worldwide C F Xactware C G Geomni C G Sequel C F AER D
Slide 20: Non-GAAP Reconciliations
4Q2018 Earnings Presentation Non-GAAP Reconciliations Constant Currency Growth Our operating results reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which we transact change in value over time compared to the U.S. doll
Slide 21: Segment Results and EBITDA
4Q2018 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior Year Period Segment Results Summary and EBITDA Reconciliation 4Q18 4Q17 Change Organic Insurance revenues $430.4 $405.1 6.2% Organic Energy & Specialized Markets revenues 121.3 116.6 4.1% Organic Fin
Slide 22: Adjusted Net Income/EPS and Free Cash Flow
4Q2018 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior Year Period Adjusted Net Income and EPS 4Q18 4Q17 Change Net income 146.2 204.6 -28.5 plus: Amortization of intangible assets 32.3 28.1 less: Tax effect on amortization of intangible
Slide 23: Adjusted EBITDA and Free Cash Flow
4Q2018 Earnings Presentation Non-GAAP Reconciliations Adjusted EBITDA and Free Cash Flow | Historical Full Year Periods Adjusted EBITDA 2018 2017 2016 Income from continuing operations $598.7M $555.1M $451.5M Interest expense 129.7 119.4 120.0 Provision for income taxes 121.0 135.9 202.2 Depreciatio
Slide 24: © 2019 Verisk Analytics, Inc. All rights reserved.
© 2019 Verisk Analytics, Inc. All rights reserved. 24