Verisk Analytics, Inc. · NASDAQ:VRSK
Verisk Analytics — William Blair Growth Stock Conference 2024
35 slides from Verisk Analytics's conference presentation, Jun 4, 2024
Slide 1: Verisk Analytics William Blair Growth Stock Conference
Verisk Analytics William Blair Growth Stock Conference June 4, 2024 © Verisk Analytics, Inc. All rights reserved.
Slide 2: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures Forward-Looking Statements This release contains forward-looking statements about Verisk’s future performance, including those related to our financial guidance. These statements relate to future events or to future financial p
Slide 3: Agenda
Agenda I. A Predictable Growth Company II. Capitalizing on our Competitive Position III. Financial Overview IV. Appendix © Verisk Analytics, Inc. All rights reserved. 3
Slide 4: I: A Predictable Growth Company
I: A Predictable Growth Company ©Verisk © Verisk Analytics, Analytics, Inc. Inc. All All rights rights reserved. reserved.
Slide 5: A Strong and Profitable Platform
A Strong and Profitable Platform Revenue Profit Focus Retention Recurring $2.7B 53.5% 100% 95%+ 80% Adj. EBITDA Insurance Total Revenue Margin 2023 Revenue By Reporting Segment 2023 Revenue By Geography Claims Underwriting Domestic International Solutions $2.7B Solutions 83% $2.7B 17% 29% 71% © Veri
Slide 6: Consistent & Predictable Revenue Growth Last 15 Years
Consistent & Predictable Revenue Growth Last 15 Years Total Revenue Growth 8.3% CAGR 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Annual OCC% Revenue Growth; Average = 7.0% 8.7% 8.3% 7.6% 7.8% 7.9% 7.2% 7.2% 7.0% 6.9% 6.9% 6.7% 6.8% 6.5% 6.5% 6-8% 5.3% 5.3% Range 1
Slide 7: We Serve the Global Insurance Industry
We Serve the Global Insurance Industry Life & Annuity Property Property Auto Underwriting Estimating Forms, Rules, & Loss Costs Extreme Fraud Specialty Event Casualty Detection Marketing Business © Verisk Analytics, Inc. All rights reserved. 7
Slide 8: US Insurance: A Scaled Industry That Plays A Critical Role in the Economy
US Insurance: A Scaled Industry That Plays A Critical Role in the Economy Verisk Solutions are Mission-Critical A Scaled Industry but Small-Cost Item for the Industry $800B VRSK 2022 Revenue as % of US GWP US GWP 0.3% 3,700 $500B Number of Industry US P&C Carriers Expenditures VRSK 2022 Revenue as a
Slide 9: Advantaged Business Model Drives Strong Economic Value
Advantaged Business Model Drives Strong Economic Value Deliver top line growth, 1 2 Invest in new datasets, strong returns Advantaged Growing technology & products market position recurring revenue 5 3 Strong Operating balance leverage sheet 4 Attractive cash generation © Verisk Analytics, Inc. All
Slide 10: The New Verisk – Building on 50 Years in Insurance
The New Verisk – Building on 50 Years in Insurance Industry Utility > Data Infrastructure > Technology Innovator > Network • Centrality • Criticality • Growth • Multiplier • Scale • Defensibility • Industry • Efficiency • Stability • Evolution • Solutions • Operating leverage © Verisk Analytics, Inc
Slide 11: II: Capitalizing on our Competitive Position
II: Capitalizing on our Competitive Position ©Verisk © Verisk Analytics, Analytics, Inc. Inc. All All rights rights reserved. reserved.
Slide 12: Well-Positioned in Large and Growing Markets
Well-Positioned in Large and Growing Markets Underwriting & Rating Claims Growing +LSD% annually Growing +LSD% annually Total Total Addressable Market: Addressable Market: $15B $4.7B Current Current Share: Share: ~12% ~15% Business Lines: Business Lines: Forms, Rules, Loss Costs Life Solutions Prope
Slide 13: Clearly Defined Strategic Operating Goals
Clearly Defined Strategic Operating Goals Client Product Team Financial • Strengthen client • Enhance existing • Enhance results- • Revenue growth strategic dialogue solutions oriented culture • Margin expansion • Intensify industry • Accelerate growth • Focus on integration engagement opportunities
Slide 14: Three Key Priorities
Three Key Priorities Drive Consistent Deliver Margin Ensure Disciplined Growth Expansion Capital Allocation © Verisk Analytics, Inc. All rights reserved. 14
Slide 15: Drive Consistent and Predictable Growth by Extending Our Reach within Insurance
PRIORITY #1 Drive Consistent and Predictable Growth by Extending Our Reach within Insurance Faster Life Growth Insurance Marketing Specialty Business Solutions (International) Core Line Reimagine Claims Sustain and Initiative Solutions Resilience & Accelerate Supercharge Sustainability ecosystem Ext
Slide 16: Drive Consistent and Predictable Growth Through Cross Sell of Existing Solutions
PRIORITY #1 Drive Consistent and Predictable Growth Through Cross Sell of Existing Solutions Average Number of Products (Across 33 Product Categories) Top 1 - 10 Customers 11 - 25 Customers 26 - 100 Customers 101 - 500 Customers 16.9 15.3 15.4 14.2 13.3 12.0 9.8 9.0 8.1 4.3 3.1 3.6 2016 2018 2022 20
Slide 17: Drive Consistent and Predictable Growth Through Innovation
PRIORITY #1 Drive Consistent and Predictable Growth Through Innovation Sustainable Transformational Disruptive Efficiency Innovation Innovation Innovation Innovation Optimizing existing Streamlining existing Leading the industry with Inventing market products for existing processes and business new
Slide 18: Case Study: Core Lines Reimagine
PRIORITY #1 Case Study: Core Lines Reimagine Proprietary Content More Insights Rules Digital Delivery Forms Loss Costs Interactive Platform © Verisk Analytics, Inc. All rights reserved.
Slide 19: Multiple Levers of Margin Expansion
PRIORITY #2 Multiple Levers of Margin Expansion Result Operating Leverage Cost Actions Portfolio Impacts Margin • Subscription revenues drive • Cost savings from • Mix shift from faster expansion high incremental margins technology transformation growing, lower margin businesses • Build once, sell m
Slide 20: Ensure Disciplined Capital Allocation
PRIORITY #3 Ensure Disciplined Capital Allocation 1 2 3 4 Organic Selective Strong Return Capital Investment M&A Balance Sheet to Shareholders © Verisk Analytics, Inc. All rights reserved. 20
Slide 21: III: Financial Overview
III: Financial Overview ©Verisk © Verisk Analytics, Analytics, Inc. Inc. All All rights rights reserved. reserved.
Slide 22: Delivers Solid and Consistent Growth
Delivers Solid and Consistent Growth Revenue Growth (1) Adjusted EBITDA Growth (1) 8.7% 6.8% OCC OCC 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Note 1: Numbers are pro forma for all dispositions. © Verisk Analytics, Inc. All rights reserved. 22
Slide 23: Capital Return
Capital Return Dividend per Share Share Repurchases 8.7% 8.0% $1.36 CAGR $1.24 5.3% $1.16 $2,800 $1.08 1.5% 1.3% $0.78 $1,663 0.6% $475 $349 $200 2020 2021 2022 2023 YTD 2024 Share repurchases ($M) Repurchases as % of Weighted Avg. Shares Out 2020 2021 2022 2023 YTD 2024 1 1. 2024 dividend per share
Slide 24: Maintain Investment Grade Rating and Strong Balance Sheet
Maintain Investment Grade Rating and Strong Balance Sheet Investment Grade Target FCF Working Capital Debt Issuer Leverage Generation Efficiency Continue Debt to 2023 Working Capital to EBITDA Target Maintain 2–3X +$800M Source of Cash © Verisk Analytics, Inc. All rights reserved. 24
Slide 25: Verisk 2023 Investor Day Targets
Verisk 2023 Investor Day Targets OCC Revenue OCC EBITDA Adjusted EBITDA Adjusted EPS Growth Growth Margin Expansion Growth 54-55% in 2024 6%-8% 7%-10% +Double Digit annually annually +25-75 bps in 2025 © Verisk Analytics, Inc. All rights reserved. 25
Slide 26: Driving Consistent and Predictable Growth
SUMMARY Driving Consistent and Predictable Growth Long track record of consistent and predictable growth Committed to deliver margin expansion Disciplined capital allocation Multiple factors set to drive accelerated earnings growth going forward © Verisk Analytics, Inc. All rights reserved. 26
Slide 27: Appendix: Guidance, Supplemental Slides and Non-GAAP Reconciliations
Appendix: Guidance, Supplemental Slides and Non-GAAP Reconciliations ©Verisk © Verisk Analytics, Analytics, Inc. Inc. All All rights rights reserved. reserved.
Slide 28: 2024 Outlook
2024 Outlook 2024 YoY Growth at Metric 2023 Guidance Midpoint Total Revenue $2.84 – $2.90B $2.68B 7.0% Adjusted EBITDA $1.54 – $1.60B $1.43B 9.5% Adjusted EBITDA margin 54.0% – 55.0% 53.5% 100 bps Diluted Adjusted EPS $6.30 – $6.60 $5.71 13.0% Tax rate 23% – 25% 25.2% (120) bps Capex $240 – $260M $2
Slide 29: 2023 Revenue Contribution: Underwriting and Claims
2023 Revenue Contribution Extreme Event Solutions 13% New Growth Vectors 1 9% Specialty Business Solutions 3% Property Estimating Solutions Underwriting Data Analytics 15% Solutions 14% $2.7B revenue Anti-Fraud Underwriting 9% Claims 71% Casualty 3% 29% Claims International Forms, Rules, and Loss Co
Slide 30: Non-GAAP Reconciliations
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 measures reported by other co
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and 1Q24 1Q23 Adjusted EBITDA Reconciliation Revenues $704.0M $651.6M Revenues from acquisitions and dispositions (7.8) (1.9) Organic revenues 696.2 649.7 EBITDA 380.0 355.3 Acquisition-relate
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and FY23 FY22 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $2,681.4M — — $2,437.0M $22.4M $37.6M Revenues from acquisitions and dispositions (42.9) — — (10.5) (2
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS FY23 FY22 1Q24 1Q23 Net income $614.4M $954.3M $219.4M $56.4M Income from discontinued operations, net of tax expense (154.0) (87.8) — 138.0 Income from continuing operatio
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2021 and 2022 Pro Forma Revenues and EBITDA 2023 2022 2021 1Q 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Revenues (Insurance) $652M $586M $610M $610M $630M $2,437M $536M $550M $558M $563M $2,207M Revenues from acquisitions 23 (20) (28) (28) (28) (105) (1) - (0) (2) (3) Organic revenues 6
Slide 35: © Verisk Analytics, Inc. All rights reserved.
© Verisk Analytics, Inc. All rights reserved.
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