Crawford & Company · NYSE:CRD.A
Crawford & — Q3 2020 Earnings Presentation
30 slides from Crawford &'s earnings presentation, Nov 2, 2020
Slide 1: Third Quarter 2020 Earnings Conference Call
Crawford & Company Third Quarter 2020 Earnings Conference Call CRD-A & CRD-B (NYSE)
Slide 2: Forward-Looking Statements and Additional Information
Introduction | External Factors | Claims Volume | 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, includin
Slide 3: Crawford & Company at a Glance
Introduction | External Factors | Claims Volume | 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+ 1.6
Slide 4: Financial Highlights
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 4 Financial Highlights Third Quarter 2020 GAAP NON-GAAP¹ KEY METRICS¹ $253.1 MILLION $255.2 MILLION $35.2 MILLION Revenues before Revenues before
Slide 5: Weather Indicators
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 5 Weather Indicators United States Q1 2020 Q2 2020 Q3 2020 Australia Q1 2020 Q2 2020 Q3 2020 Flood 2 2 3 Flood 9 5 3 Tropical cyclone 0 0 6 Tropic
Slide 6: Economic Indicators
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 6 Economic Indicators United States Q1 2020 Q2 2020 Q3 2020 US Unemployment rate, seasonally adjusted, Oct 2019 – Sept 2020 Unemployment rate 4.4%
Slide 7: Impact Across Our Global Service Lines (GSLs)
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 7 7 Impact Across Our Global Service Lines (GSLs) Third Quarter Performance Crawford • WeGoLook saw the highest ever claims volume Revenue Claims
Slide 8: Customer Excellence
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 8 8 Customer Excellence CCS added $9 million in revenues Contractor Connection won $3 million in revenues New and Renewal GTS closed $3.5 million
Slide 9: Our Capital Allocation Strategy
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 9 Our Capital Allocation Strategy Proactively manage capital allocation across the business and adapt to reflect the new economic reality increase
Slide 10: Latin American and Australian Expansion
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 10 Latin American and Australian Expansion Reinvigorated M&A Pipeline Crawford Carvallo • Acquired Crawford Carvallo, recognized as the market lea
Slide 11: Supporting Our Global Workforce
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 11 Supporting Our Global Workforce Continuing to demonstrate our resilience despite the significant challenges presented by COVID-19 Prioritizing
Slide 12: Third Quarter 2020 Financial Summary
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 12 12 Third Quarter 2020 Financial Summary Quarter Ended September 30, September 30, ($ in millions, except per share amounts) 2020 2019 % Change
Slide 13: Crawford Claims Solutions Segment
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 13 13 Crawford Claims Solutions Segment Three months ended 2020 (in thousands, September 30, September 30, Based on except percentages) 2020 2019
Slide 14: Crawford Specialty Solutions Segment
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 14 14 Crawford Specialty Solutions Segment Highlights Three months ended • Contractor Connection 2020 • Strong level of daily assignments in the (
Slide 15: Crawford TPA Solutions Segment
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 15 15 Crawford TPA Solutions Segment Three months ended (in thousands, 2020 Based except September 30, September 30, on 2019 percentages) 2020 201
Slide 16: Additional Financial Matters In The Third Quarter 2020
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 16 Additional Financial Matters In The Third Quarter 2020 • Unallocated corporate costs of $1.0 million Unallocated Corporate and • Decrease drive
Slide 17: Balance Sheet Highlights
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 17 17 Balance Sheet Highlights September 30, December 31, Unaudited ($ in thousands) 2020 2019 Change Cash and cash equivalents $ 48,739 $ 51,802
Slide 18: Net Debt and Pension Liability
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 18 18 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 $121.7 mill
Slide 19: Operating And Free Cash Flow
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 19 19 Operating And Free Cash Flow For the year to date periods ended September 30, Unaudited ($ in thousands) 2020 2019 Change Net Income Attribu
Slide 20: 2020 Priorities
Introduction | External Factors | Claims Volume | New Business Momentum | Disciplined Capital Allocation | Our Workforce | Financial Results | Conclusion 20 20 2020 Priorities Employee Customer Brands, Health & Safety Excellence Relationships & Future Growth Differentiation Protect our workforce Pro
Slide 21: Crawford & Company
21 Crawford & Company The world’s largest publicly listed independent provider of global claims management and outsourcing solutions. 9,000 50,000+ 70 $18B+ Employees Field Resources Countries Claims Managed Annually
Slide 22: Appendix: Non-GAAP Financial Information
22 Appendix: Non-GAAP Financial Information
Slide 23: Appendix: Non-GAAP Financial Information
23 Appendix: Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comp
Slide 24: Appendix: Non-GAAP Financial Information (cont.)
24 Appendix: Non-GAAP Financial Information (cont.) Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and l
Slide 25: Total Revenues Before Reimbursements by Major Currency
25 Total Revenues Before Reimbursements by Major Currency The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Three Months Ended Nine Months Ended September 30, September 30, September 30, September
Slide 26: Reconciliation of Non-GAAP Items
26 Reconciliation of Non-GAAP Items Revenues, Costs of Services Provided, and Operating Earnings Quarter Ended Quarter Ended September 30, September 30, Unaudited ($ in thousands) 2020 2019 Revenues Before Reimbursements Total Revenues $ 261,669 $ 265,842 Reimbursements (8,545) (11,165) Revenues Bef
Slide 27: Reconciliation of Non-GAAP Items (cont.)
27 Reconciliation of Non-GAAP Items (cont.) Adjusted EBITDA Quarter Ended September 30, September 30, Unaudited ($ in thousands) 2020 2019 Net income attributable to shareholders of Crawford & Company $ 24,397 $ 11,046 Add: Depreciation and amortization 10,700 10,236 Stock-based compensation 734 1,2
Slide 28: Reconciliation of Non-GAAP Items (cont.)
28 Reconciliation of Non-GAAP Items (cont.) Net Debt September 30, December 31, Unaudited ($ in thousands) 2020 2019 Net Debt Short-term borrowings $ 3,028 $ 28,531 Current installments of capital leases 49 15 Long-term debt and capital leases, less current installments 124,684 148,408 Total debt 12
Slide 29: Reconciliation of Non-GAAP Items (cont.)
29 Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit Three months ended September 30, September 30, ($ in thousands) 2020 2019 Segment gross profit: Crawford Claims Solutions $ 22,680 $ 19,752 Crawford Specialty Solutions 28,239 24,802 Crawford TPA Solutions 20,273 26,710 Segment gross p
Slide 30: Reconciliation of Third Quarter Non-GAAP Results
30 Reconciliation of Third Quarter Non-GAAP Results Three Months Ended September 30, 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 $ 253,124 $ 2