Verisk Analytics, Inc. · NASDAQ:VRSK
Verisk Analytics — William Blair 35th Annual Growth Stock Conference (June 2015)
25 slides from Verisk Analytics's conference presentation, Jun 9, 2015
Slide 1: Verisk Analytics
Verisk Analytics Mark Anquillare Group Executive, Risk Assessment EVP and Chief Financial Officer William Blair 35th Annual Growth Stock Conference June 9, 2015
Slide 2: Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures
Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures Forward-Looking Statements This presentation contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors th
Slide 3: Verisk: A Market Leading Provider of Vertical Data Analytics
Verisk: A Market Leading Provider of Vertical Data Analytics Multiple Thick Verticals, Enabled Data / Analytic Mindset 1. n+1 Data Set (proprietary) Financial Supply Insurance Energy Healthcare Services Chain 2. Analytic Differentiation 3. A Leader as a Development Partner 4. Excellence at ETL (Extr
Slide 4: Continuous Evolution and Value Creation via Excellent Execution and Strategic Acquisitions
Verisk: Continuous Evolution and Value Creation via Excellent Execution and Strategic Acquisitions 1971–1997 1998–2001 2002–2009 2010–2014 2015 & Beyond Founding Culture Expansion + Innovation The Verisk Way Change Inflection Not-for-profit Drive to operational Focus on Add new Aspire to b
Slide 5: Insurance: Industry-Leading Analytics Solutions
Insurance: Industry-Leading Analytics Solutions Primary Risk Assessment Competitive Advantage Competitors Industry-Standard Extensive time-series data and coverage language Internal in >200M policies Insurance Programs Comprehensive database of 3.7M commercial Property Information buildings & rating
Slide 6: Energy: WoodMac is a Verisk-Like Business
Energy: WoodMac is a Verisk-Like Business Verisk Distinctives Unique Data Assets & Decision-Making Models Deep Domain Expertise Data & Analytics First-Mover Advantage Embedded in Customer Workflows Company Specific Attributes Global Data-Rich Business Vertical Track Record of Growt
Slide 7: Energy: Industry Standard for Commercial Analysis and Solutions
Energy: Industry Standard for Commercial Analysis and Solutions WoodMac Analytics are Strategic Components of Customer Workflows… …Creating A Differentiated Value Proposition O&G Professionals/ Business Developer Proprietary Macro Data & Commercial Analytical M&A Analyst Solutions Customer Value Add
Slide 8: Energy: Analytics Enhance Existing Verisk Value Proposition
Energy: Analytics Enhance Existing Verisk Value Proposition Potential Near Term Opportunities n+1 Opportunities Insurance Supply Chain Climate CAT Modeling Business Political Risk Interruption Analysis Risk Energy Climate Workers Production Modeling Comp and Manufacturing New proprietary data and In
Slide 9: Healthcare: Addressing Our Clients' Challenges
Healthcare: Addressing Our Clients’ Challenges Increasingly Complex Greater Need for Cost Shift to Value-Based Regulatory Environment Containment Healthcare Our Solutions Revenue Payment Population Quality Solutions to align patient Solutions to ensure Analytics and reporting Solutions to drive risk
Slide 10: Financial Services: Leading Provider of Data Analytic Solutions for Banks and Their Regulators
Financial Services: Leading Provider of Data Analytic Solutions for Banks and Their Regulators At the foundation of our value-creating solutions… Strategy • Unique and Proprietary Advertising Regulation Consortia Datasets • Deep Domain Expertise in Analytics and Banking Argus • Big-Data Technology R
Slide 11: Financial Services: Providing Valuable and Differentiated Solutions Built on Unique Data Assets
Financial Services: Providing Valuable and Differentiated Solutions Built on Unique Data Assets Credit Payment Payment Description Argus* Bureaus Networks Processors Transaction POS & online transaction detail Data (merchant, location, amount, date) Account Credit card, deposits, checking, and Data
Slide 12: Diverse Revenue sources; high recurring revenue
Verisk: Diverse Revenue sources; high recurring revenue 1Q 2015 Revenue Distribution 1Q 2015 Subscription Base Specialized Healthcare 5% 16% Financial Services 8% Transaction Revenue 26% Risk Subscription Assessment Revenue 37% 74% Insurance 34% Decision Analytics 63% _______________________________
Slide 13: Insurance Is a Strong Foundation for Growth
Verisk: Insurance Is a Strong Foundation for Growth Newer Verticals Are Making Important Contributions • Growth driven by a combination − New Customers − Deeper Penetration into Existing Customers − New Solutions • Majority of Revenue Is Prepaid Quarterly or Annually • Very high customer retention 2
Slide 14: Strong Track Record of Top-Line Growth
Verisk: Strong Track Record of Top-Line Growth 12.5% CAGR Revenue ($ millions) $1.5 B $1,747 $1,596 $1.0 B $1,408 $1,191 $992 $750 M $910 $830 $500 M $761 $679 $603 $540 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 ________________________________________________________________ Note: From
Slide 15: Differentiated Financial Model Generates Cash
Verisk: Differentiated Financial Model Generates Cash Strong, Stable Revenue Growth Leading EBITDA Margin ($M) (%) 15.2% CAGR $1,747 47.7% $1,596 46.3% 46.6% 46.7% 46.0% $1,408 $1,191 $992 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Low Capital Intensity Strong Free Cash Flow (CapEx as a % of
Slide 16: Disciplined Track Record on M&A Delivers Value
Verisk: Disciplined Track Record on M&A Delivers Value • Increase in Value at 10x Multiple: ~ $1.4 billion • Annualized Return1: ~ 20% 2002 83 2003 16 Predictive Analytics 2004 33 2005 93 2006 Annual Investment – 232 Buy and Multiple 2007 170 Acquisitions ($MM) Build Verticals 2008 101 But not witho
Slide 17: Disciplined Capital Allocation
Verisk: Disciplined Capital Allocation Cumulative $1,602 30% $3,787 70% Acquisitions and earn-outs Share Repurchase (in $ millions) 2011 2012 2013 2014 2015 Share Repurchase $382 $163 $279 $778 $0 Acquisitions and earn-outs $143 $808 $1 $35 $2,800 Acquisitions and earn-outs Share Repurchase ________
Slide 18: Debt Capital Structure Reflects Balanced Maturity Schedule
Verisk: Debt Capital Structure Reflects Balanced Maturity Schedule ($M) $1,750 (due May 2020) Bonds $2,300 Revolver 1,000 Total Drawn $3,300 $750 Debt/EBITDA(1) 3.4x Covenant levels 3.75x Paid make- whole on $85M of Private $1,000 Placement debt $900 $450 $350 $350 $250 2015-2018 2019 2020 2021 2022
Slide 19: Verisk and WoodMac: Track-Record of Successful Growth
Verisk and WoodMac: Track-Record of Successful Growth Verisk (1) WoodMac(2) ($ millions) (£ millions) $1,747 $410 $459 £227 £55 £60 $992 £128 Strong, Stable Revenue Growth 2010 2014 1Q'14 1Q'15 2010 2014 1Q'14 1Q'15 Consistently £107 £27 £30 $803 $216 Robust EBITDA $459 $183 £56 Margins (3) 46% 46%
Slide 20: Thank You
Thank You Contact Investor Relations: eva.huston@verisk.com david.e.cohen@verisk.com
Slide 21: Appendix
Appendix verisk | SERVE | ADD VALUE | INNOVATE Analytics
Slide 22: Reconciliations for Metrics from Continuing Operations
Reconciliations for Metrics from Continuing Operations Verisk: EBITDA reconciliation ($ Millions) Quarter Ended Year Ended December 31, March 31, 2010 2011 2012 2013 2014 1Q'14 1Q'15 Net income $243 $283 $329 $348 $400 $116 $99 Add: Depreciation and amortization from continuing operations 61 73 99 1
Slide 23: Reconciliations for Non-GAAP Metrics
Reconciliations for Non-GAAP Metrics Verisk: Unlevered Free Cash Flow Calculation ($ Millions) Year Ended December 31, 2010 2011 2012 2013 2014 EBITDA from Continuing Operations $459 $555 $671 $745 $803 Less: Depreciation and amortization from continuing operations (61) (73) (99) (130) (142) Operati
Slide 24: Reconciliations for Non-GAAP Metrics (Cont'd)
Reconciliations for Non-GAAP Metrics (Cont’d) WoodMac: EBITDA reconciliation (£ Millions) Quarter Ended Year Ended December 31, March 31, 2010 2011 2012 2013 2014 1Q'14 1Q'15 Net income (£17) (£0) (£17) (£41) (£46) (£3) (£21) Add: Depreciation and amortization 4 5 6 8 17 3 4 Add: Interest expense fr
Slide 25: Reconciliations for Non-GAAP Metrics (Cont'd)
Reconciliations for Non-GAAP Metrics (Cont'd) Verisk and WoodMac: Unlevered FCF Calculation and Conversion Rates (1) Verisk WoodMac Combined ($ millions) (£ millions) ($ millions) ($ millions) 2013 2014 2013 2014 2013 2014 2013 2014 Operating Profit $614 $660 £76 £83 $119 $137 $733 $797 Less: Tax (2
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