Crawford & Company · NYSE:CRD.A
Crawford & — Q4 2020 Earnings Presentation
34 slides from Crawford &'s earnings presentation, Mar 4, 2021
Slide 1: Fourth Quarter 2020 Earnings Conference Call
Crawford & Company Fourth Quarter 2020 Earnings Conference Call CRD-A & CRD-B (NYSE)
Slide 2: Forward-Looking Statements and Additional Information
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 2 Forward-Looking Statements and Additional Information Forward-Looking Statements This presentation contains forward-looking statements, inc
Slide 3: Crawford & Company at a Glance
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 3 Crawford & Company The world’s largest publicly listed independent provider of global claims management solutions AT A GLANCE $ 18 BILLION+
Slide 4: Financial Highlights Full Year 2020
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 4 Financial Highlights Full Year 2020 GAAP NON-GAAP¹ KEY METRICS¹ $982.5 MILLION $988.3 MILLION $105.6 MILLION Revenues before Revenues befor
Slide 5: Weather Indicators
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 5 Weather Indicators United States Q2 2020 Q3 2020 Q4 2020 Australia Q2 2020 Q3 2020 Q4 2020 Flood 2 3 1 Flood 5 3 3 Tropical cyclone 0 6 2 T
Slide 6: Economic Indicators
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 6 Economic Indicators United States Q2 2020 Q3 2020 Q4 2020 US Unemployment rate, seasonally adjusted, Unemployment rate 11.1% 7.9% 6.7% Jan
Slide 7: Impact Across Our Global Service Lines (GSLs)
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 7 7 Impact Across Our Global Service Lines (GSLs) Fourth Quarter and Full Year 2020 Performance Crawford Q4 Revenue Q4 OE¹ • Added $38 millio
Slide 8: Evolving Crawford's Strategy for Long-Term Growth
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 8 Evolving Crawford's Strategy for Long-Term Growth Description Customers Strategy • Adjust individual claims • Carriers of all • Benchmark i
Slide 9: Customer Excellence
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 9 9 Customer Excellence Maintained and exceeded pre-pandemic client service delivery levels Surveyed over 70% of top clients, with an overall
Slide 10: Our Capital Allocation Strategy
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 10 Our Capital Allocation Strategy Proactively manage capital allocation across the business and adapt to reflect the new economic reality in
Slide 11: Market Expansion
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 11 Market Expansion Crawford Carvallo • Acquired Crawford Carvallo in 2020, establishing Crawford as the largest loss adjusting company in La
Slide 12: Supporting Our Global Workforce
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 12 Supporting Our Global Workforce Continuing to demonstrate our resilience despite the significant challenges presented by COVID-19 Prioriti
Slide 13: Fourth Quarter 2020 Financial Summary
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 13 13 Fourth Quarter 2020 Financial Summary Quarter Ended December 31, December 31, ($ in millions, except per share amounts) 2020 2019 % Cha
Slide 14: Crawford Claims Solutions Segment
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 14 14 Crawford Claims Solutions Segment Three months ended 2020 (in thousands, December 31, December 31, Based on except percentages) 2020 20
Slide 15: Crawford Specialty Solutions Segment
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 15 15 Crawford Specialty Solutions Segment Three months ended Highlights 2020 (in thousands, December 31, December 31, Based on • Contractor
Slide 16: Crawford TPA Solutions Segment
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 16 16 Crawford TPA Solutions Segment Three months ended (in thousands, 2020 Based except December 31, December 31, on 2019 percentages) 2020
Slide 17: Additional Financial Matters
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 17 Additional Financial Matters Canada Emergency Wage • Realized a $4.8 million benefit to operating earnings during the 2020 Subsidy fourth
Slide 18: Balance Sheet Highlights
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 18 18 Balance Sheet Highlights December 31, December 31, Unaudited ($ in thousands) 2020 2019 Change Cash and cash equivalents $ 44,656 $ 51,
Slide 19: Net Debt and Pension Liability
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 19 19 Net Debt and Pension Liability Net Debt Pension Liability 200,000 $171.2 million 140,000 180,000 120,000 160,000 140,000 100,000 $121.7
Slide 20: Operating And Free Cash Flow
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 20 20 Operating And Free Cash Flow For the year to date periods ended December 31, Unaudited ($ in thousands) 2020 2019 Change Net Income Att
Slide 21: 2021 Priorities
Introduction | External Factors | Segment Highlights | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 21 21 2021 Priorities Employee Customer Brands, Health & Safety Excellence Relationships & Future Growth Differentiation Protect our workforc
Slide 22: Crawford & Company
22 22 Crawford & Company The world’s largest publicly listed independent provider of global claims management and outsourcing solutions. 9,000 employees 50K+ field resources 70 countries $18B+ Claims Managed Annually
Slide 23: Appendix: Non-GAAP Financial Information
23 Appendix: Non-GAAP Financial Information
Slide 24: Appendix: Non-GAAP Financial Information
24 Appendix: Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comp
Slide 25: Appendix: Non-GAAP Financial Information (cont.)
25 Appendix: Non-GAAP Financial Information (cont.) Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and l
Slide 26: Crawford Claims Solutions Segment
26 26 Crawford Claims Solutions Segment Year ended 2020 (in thousands, December 31, December 31, Based on except percentages) 2020 2019 Variance 2019 rates Variance Highlights Revenues $356,447 $339,837 4.9% $358,819 5.6% • $38 million of added revenue from top US carrier clients in 2020 Direct expe
Slide 27: Crawford Specialty Solutions Segment
27 27 Crawford Specialty Solutions Segment Year ended 2020 (in thousands, December 31, December 31, Based on except percentages) 2020 2019 Variance 2019 rates Variance Revenues $261,062 $272,109 (4.1%) $263,475 (3.2%) Highlights • Launched cutting-edge estimate review platform Direct expenses 164,44
Slide 28: Crawford TPA Solutions Segment
28 28 Crawford TPA Solutions Segment Year ended (in thousands, 2020 Based except December 31, December 31, on 2019 percentages) 2020 2019 Variance rates Variance Revenues $364,983 $393,856 (7.3%) $365,959 (7.1%) Highlights • Ongoing investment in new technologies and Direct expenses 277,308 294,172
Slide 29: Total Revenues Before Reimbursements by Major Currency
29 Total Revenues Before Reimbursements by Major Currency The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 3
Slide 30: Reconciliation of Non-GAAP Items
30 Reconciliation of Non-GAAP Items Revenues, Costs of Services Provided, and Operating Earnings Quarter Ended Quarter Ended December 31, December 31, Unaudited ($ in thousands) 2020 2019 Revenues Before Reimbursements Total Revenues $ 265,605 $ 257,562 Reimbursements (8,184) (10,376) Revenues Befor
Slide 31: Reconciliation of Non-GAAP Items (cont.)
31 Reconciliation of Non-GAAP Items (cont.) Adjusted EBITDA ) Quarter Ended December 31, December 31, Unaudited ($ in thousands) 2020 2019 Net income (loss) attributable to shareholders of Crawford & Company $ 9,400 $ (7,312) Add: Depreciation and amortization 9,961 10,427 Stock-based compensation 1
Slide 32: Reconciliation of Non-GAAP Items (cont.)
32 Reconciliation of Non-GAAP Items (cont.) Net Debt December 31, December 31, Unaudited ($ in thousands) 2020 2019 Net Debt Short-term borrowings $ 1,570 $ 28,531 Current installments of finance leases and other obligations 267 15 Long-term debt and finance leases, less current installments 111,758
Slide 33: Reconciliation of Non-GAAP Items (cont.)
33 Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit Three months ended December 31, December 31, ($ in thousands) 2020 2019 Segment gross profit: Crawford Claims Solutions $ 22,008 $ 20,339 Crawford Specialty Solutions 24,297 22,941 Crawford TPA Solutions 24,399 23,833 Segment gross pro
Slide 34: Reconciliation of Fourth Quarter Non-GAAP Results
34 Reconciliation of Fourth Quarter Non-GAAP Results Three Months Ended December 31, 2020 Net Income Non-GAAP Attributable to Diluted Diluted Operating Pretax Crawford & Earnings per Earnings per Unaudited ($ in thousands) Revenues Earnings Earnings Company CRD-A Share CRD-B Share GAAP $ 257,421 $ 1