Slide 1: 3Q2022 Earnings Presentation
3Q2022 Earnings Presentation November 1, 2022 ©Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
3Q2022 Earnings Presentation Forward-Looking Statements, Safe Harbor, and 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, uncertai
Slide 3: Business and Financial Highlights
3Q2022 Earnings Presentation Business and Financial Highlights • Organic constant currency (OCC) revenue growth of 4.8%, or 5.3% when normalized for the impact of suspension of Russian operations, was driven by solid growth in insurance and modest contributions from energy. • OCC subscription revenu
Slide 4: Verisk Announces the Sale of Wood Mackenzie to Veritas Capital
3Q2022 Earnings Presentation Verisk Announces the Sale of Wood Mackenzie to Veritas Capital • Signed a definitive agreement to sell our Energy business, Wood Mackenzie, to Veritas Capital • $3.1 billion in cash consideration payable at closing plus future additional contingent consideration of up to
Slide 5: Financial Summary
3Q2022 Earnings Presentation Financial Summary Three months ended September 30 Subscription/Long-Term Revenue 2022 2021 % change Revenue $745M $759M -1.8% 81% 81% Net income 189 202 -6.1 3Q2022 3Q2021 Adjusted net income 230 234 -1.9 Adjusted EBITDA 384 379 1.2 International Revenue Adjusted EBITDA
Slide 6: Organic Constant Currency Growth and Adjusted EBITDA Margins
3Q2022 Earnings Presentation Organic Constant Currency Growth and Adjusted EBITDA Margins 3Q Financial Review OCC Revenue OCC Adjusted EBITDA Total Adjusted EBITDA Margin 51.5% 51.0% 9.8% 7.6% 49.9% 49.4% 49.0% 49.0% 5.3% 5.3% 6.0% 5.0% 5.1% 5.2% 3.3% 4.7% 4.8% 4.1% 4.4% 46.3% 2.1% FY20 FY21 3Q21 4Q
Slide 7: Subscription vs. Non-subscription Growth
3Q2022 Earnings Presentation Subscription vs. Non-subscription Growth Organic Constant Currency Subscription revenue Non-subscription revenue Total Revenue 1 OCC Growth 3Q22 Highlights Insurance E&SM Total Insurance E&SM Total Insurance E&SM Total Insurance 1Q21 7.1% -1.0% 5.4% 1.3% -4.4% 0.2% 6.0%
Slide 8: Segments
Segments ©Verisk Analytics, Inc. All rights reserved. 8
Slide 9: Insurance
3Q2022 Earnings Presentation Insurance Industry-leading data analytics and insights Underwriting & Rating Solutions Claims Solutions Industry-standard insurance programs, Integrated analytics solutions for improving Underwriting Claims property-specific underwriting & rating claim outcomes and fight
Slide 10: Insurance Quarterly Performance
3Q2022 Earnings Presentation Insurance Quarterly Performance Financials Business Highlights • Underwriting and rating revenue grew 6.5% on an OCC basis with solid growth % change across industry-standard programs, extreme events solutions, life insurance solutions, and specialty business solutions.
Slide 11: Energy and Specialized Markets
3Q2022 Earnings Presentation Energy and Specialized Markets Unique insight on the world’s energy resources and intelligent compliance solutions Energy Energy and natural resources solutions across Research & Analytics and Advisory Services. Providing engaging digital platforms and tools to support o
Slide 12: Energy and Specialized Markets Quarterly Performance
3Q2022 Earnings Presentation Energy and Specialized Markets Quarterly Performance Financials Business Highlights % change • OCC revenue increased 2.5%, reflecting growth in subscription revenues offset by decline in consulting. 3Q22 3Q21 Reported OCC1 – Normalizing for the impact of suspended operat
Slide 13: Cash Flow and Capital
Cash Flow and Capital ©Verisk Analytics, Inc. All rights reserved. 13
Slide 14: Cash Flow Utilization
3Q2022 Earnings Presentation Cash Flow Utilization (in $ millions) 2019 2020 2021 3Q21 3Q22 Net cash provided by operating activities $956M $1,068M $1,156M $285M $280M Capital expenditures (217)M (247)M (268)M (61)M (66)M Free cash flow (FCF) 740M 821M 887M 224M 214M Acquisitions (net of cash acquir
Slide 15: Capital Structure
3Q2022 Earnings Presentation Capital Structure as of (in $ millions) Sep. 2022 Revolver due for renewal August 2024 Bonds $2,350 60 Term Loan $125 940 900 Revolver Drawn $940 Total Debt 1 $3,415 600 Debt/EBITDA 2 2.15x 500 Covenant level 3 3.50x 350 Investment Grade Ratings S&P BBB 125 Moody’s Baa2
Slide 16: Capital Expenditures
3Q2022 Earnings Presentation Capital Expenditures Capex as a % of revenue to come down to mid-single-digit level over time $268M 231 247 217 183 146 138 115 105 Internally Developed Software 53 43 $23M 26 28 Hardware/Third-Party Software Non-IT 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 17: Capital Management Philosophy
3Q2022 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. •
Slide 18: Appendix: Supplemental Slides and/or Non-GAAP Reconciliations
Appendix: Supplemental Slides and/or Non-GAAP Reconciliations ©Verisk Analytics, Inc. All rights reserved. 18
Slide 19: Non-GAAP Reconciliations
3Q2022 Earnings Presentation Non-GAAP Reconciliations Specified Metrics We have provided certain non-GAAP financial information as supplemental information regarding our operating results. These measures are not in accordance with, or an alternative for, U.S. GAAP and may be different from non-GAAP
Slide 20: Segment Results and EBITDA
3Q2022 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 3Q22 3Q21 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $610.1M $135.2M — $557.9M $165.9M $35.2M Revenues from acquisitions and d
Slide 21: Segment Results and EBITDA
3Q2022 Earnings Presentation Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and FY21 FY20 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $2,206.9M $648.9M $142.8M $2,008.7M $619.2M $156.7M Revenues from acquisi
Slide 22: Adjusted Net Income/EPS and Free Cash Flow
3Q2022 Earnings Presentation Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS FY21 FY20 3Q22 3Q21 Net income $666.3M $712.7M $189.5M $204.9M plus: Amortization of intangibles 176.7 165.9 36.6 37.6 less: Income tax effect
Slide 23: Adjusted EBITDA
3Q2022 Earnings Presentation Non-GAAP Reconciliations Adjusted EBITDA | Historical Full-Year Periods Segment Adjusted EBITDA Reconciliation 2021 2020 2019 Insurance Segment – EBITDA $1,265.7M $1,131.0M $824.1M Insurance Segment – Acquisition-related costs (earn-outs) 0.1 2.1 32.1 Insurance Segment –
Slide 24: ©Verisk ©Verisk Analytics, Analytics, Inc.
©Verisk ©Verisk Analytics, Analytics, Inc. Inc. All All rights rights reserved. reserved. 24