S&p Global Inc. · NYSE:SPGI
S&p Global — Q1 2017 Earnings Presentation
21 slides from S&p Global's earnings presentation, Apr 25, 2017
Slide 1: 1Q 2017 Earnings Conference Call
1 1Q 2017 Earnings Conference Call Doug Peterson President and CEO Ewout Steenbergen Executive Vice President and CFO Chip Merritt Vice President, Investor Relations April 25, 2017 Comparison of adjusted information to U.S. GAAP information This presentation includes adjusted financial measures that
Slide 2: Safe Harbor statement under the Private Securities Litigation Reform Act of 1995
2 “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995 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 future events, trend
Slide 3: 1Q 2017 highlights
3 Doug Peterson President and Chief Executive Officer 1Q 2017 highlights • Attained strong organic revenue growth in every segment • Outstanding Ratings results were the highlight of the first quarter • Delivered 630 basis points of adjusted profit margin improvement and adjusted diluted EPS growth
Slide 4: Outstanding start to 2017
4 Outstanding start to 2017 1Q 2017 1Q 2016 Change Revenue $1,453 $1,341 +8% Adjusted operating profit $689 $550 +25% Adjusted operating margin 47.4% 41.1% +630 bps Average diluted shares outstanding 260.8 267.2 (6.4) shares Adjusted diluted EPS $1.62 $1.20 +35% ($ and shares in millions, except ear
Slide 5: Bank loan ratings providing another source of revenue growth
5 Bank loan ratings providing another source of revenue growth Bank Loan Ratings Revenue $300 $250 $200 $150 $100 $50 $0 2010 2011 2012 2013 2014 2015 2016 1Q 2017 9 Leveraged loan issuers increasingly secure a rating from S&P United States Europe $700 100% $120 100% $600 $100 80% 80% $500 $80 $400
Slide 6: Global high-yield issuance increased more than $100 billion vs. 1Q 2016
6 Global high-yield issuance increased more than $100 billion vs. 1Q 2016 United States* Europe* Asia* 604 526 590 410 396 422 466 479 482 354 407 380 338 333 271 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 2Q16 3Q16 4Q16 1Q17 23% increase year-over- 3% increase year-over-year 18% decreas
Slide 7: S&P 500: Celebrating 60 Years
7 S&P 500®: CELEBRATING 60 YEARS 13 S&P Dow Jones Indices continues to expand • Launched S&P Green Bond Select Index – Designed to track the global green bond market • Introduced S&P Global Revenue Exposure Indices – This index family measures the performance of companies dominating revenue streams
Slide 8: Platts price assessments utilized in new derivatives
8 Platts price assessments utilized in new derivatives • ICE to launch LNG derivative contracts These contracts will be cash-settled against the Platts LNG Gulf Coast Marker price assessment and use Platts-derived U.S. GCM LNG forward curves for daily settlement purposes • First Black Sea Wheat swap
Slide 9: Geopolitical risk and central bank actions may create second half market volatility
9 Geopolitical risk and central bank actions may create second half market volatility Opportunities Risks Stronger U.S. economy, European Central Bank Potential for Fed to Brexit and upcoming Promising European QE continues begin unwinding balance European elections GDP outlook sheet and to raise ra
Slide 10: 1Q 2017: Revenue growth, margin gains, lower taxes, and share repurchases drive EPS increase
10 Ewout Steenbergen Executive Vice President, Chief Financial Officer 19 1Q 2017: Revenue growth, margin gains, lower taxes, and share repurchases drive EPS increase Organic revenue increased 18% 1Q 2017 1Q 2016 Change Revenue $1,453 $1,341 +8% Adjusted total expense $764 $791 (3%) Adjusted operati
Slide 11: Impact of foreign exchange rates on 1Q 2017 results
11 Impact of foreign exchange rates on 1Q 2017 results Market and S&P Dow Favorable (Unfavorable) Ratings Commodities Jones Indices Intelligence Revenue ($6M) ($2M) – Adj. operating profit ($8M) – +$2m ($ in millions) Key factors mitigating impact of currency changes • Approximately ½ of internation
Slide 12: Ratings' performance delivers outsized gains with all segments generating strong organic growth
12 Ratings’ performance delivers outsized gains with all segments generating strong organic growth 1Q 2017 vs. 1Q 2016 Market and S&P Dow Ratings Commodities Jones Indices Intelligence Reported revenue +29% (10%) +14% Organic revenue +29% +7% +13% Adjusted operating profit +50% (3%) +14% 1Q 2017 adj
Slide 13: Ratings: Robust high-yield issuance results in stellar transaction revenue growth
13 Ratings: Robust high-yield issuance results in stellar transaction revenue growth 1Q 2017 1Q 2016 Change Non-transaction $341 $327 +4% Transaction $373 $225 +65% ($ in millions) 1Q 2017 HIGHLIGHTS: • Non-transaction revenue increased from growth in surveillance fees, entity fees, intersegment roy
Slide 14: Market and Commodities Intelligence: Delivered strong organic revenue growth
14 Market and Commodities Intelligence: Delivered strong organic revenue growth 1Q 2017 1Q 2016 Change Revenue $593 $661 (10%) Adjusted segment operating profit $223 $230 (3%) Adjusted segment operating margin 37.6% 34.9% +270 bps ($ in millions) 1Q 2017 HIGHLIGHTS: • Organic revenue increased 7% •
Slide 15: Market Intelligence: Organic growth across the businesses
15 Market Intelligence: Organic growth across the businesses $450 Revenue $407 $402 $400 $38 $350 $115 $104 +10% $300 Divested Businesses $250 +7% $73 $68 Risk Services $200 Enterprise Solutions $150 Desktop $100 $198 +8% $215 $50 $0 1Q 2016 1Q 2017 ($ in millions) Details may not sum to total due t
Slide 16: Platts: Organic revenue growth led by Petroleum
16 Platts: Organic revenue growth led by Petroleum Revenue $197 $191 $174 $11 $177 (7%) $13 $14 $9 $157 $9 +7% $137 +3% $32 $31 $117 Acquisitions $97 Metals & Ag Petrochemicals $77 +6% $126 Power & Gas $57 $119 Petroleum $37 $17 -$3 ($ in millions) 1Q 2016 1Q 2017 Details may not sum to total due to
Slide 17: S&P Dow Jones Indices: Surge in asset-linked fees lead revenue growth
17 S&P Dow Jones Indices: Surge in asset-linked fees lead revenue growth $180 Revenue $171 $160 $151 $31 $140 +3% $30 $120 $32 (8%) Subscriptions $100 $35 Exchange-Traded $80 Derivatives $60 +26% Asset Linked Fees $108 $40 $86 $20 $0 1Q 2016 1Q 2017 ($ in millions) Details may not sum to total due t
Slide 18: S&P Dow Jones Indices: Exchange-traded derivatives faced tough comparison to 1Q16
18 S&P Dow Jones Indices: Exchange-traded derivatives faced tough comparison to 1Q16 Transaction (exchange-traded Key Contracts derivatives): (Average Daily Volume) • Revenue declined due to a 10% 4,000 decrease in average daily volume of 3,500 S&P 500 products based on S&P DJI’s 3,000 Options indic
Slide 19: Free cash flow up substantially over 1Q 2016
19 Free cash flow up substantially over 1Q 2016 1Q 2017 1Q 2016 Cash provided by (used for) operating activities $353 $185 Capital expenditures (23) (16) Dividends and other payments to noncontrolling (24) (33) interests Free cash flow $306 $136 After-tax legal settlements 1 108 Free cash flow, excl
Slide 20: 2017 Adjusted guidance: diluted EPS increased
20 2017 Adjusted guidance: diluted EPS increased and other changes highlighted below Previous Adjusted New Adjusted Reported revenue N.A. N.A. Mid to high single-digit Organic revenue Mid single-digit increase increase Unallocated expense $145 - $150 million $130 - $140 million Deal-related amortiza
Slide 21: 1Q 2017 Earnings Conference Call
21 1Q 2017 Earnings Conference Call REPLAY OPTIONS Internet: Webcast replay available for one year Go to http://investor.spglobal.com Telephone: Replay available through May 25, 2017 Domestic: 866-485-0041 International: 203-369-1613 Doug Peterson President and CEO Ewout Steenbergen Executive Vice P