S&p Global Inc. · NYSE:SPGI
S&p Global — Q3 2016 Earnings Presentation
18 slides from S&p Global's earnings presentation, Nov 3, 2016
Slide 1: 3Q 2016 Earnings Call
11/3/2016 3Q 2016 Doug Peterson President and Chief Executive Officer Earnings Call Rob MacKay Interim Chief Financial Officer Chip Merritt Vice President, Investor Relations Copyright © 2016 by S&P Global. All rights reserved. November 3, 2016 Comparison of adjusted information to U.S. GAAP informa
Slide 2: Safe Harbor statement under the Private Securities Litigation Reform Act of 1995
11/3/2016 “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
Slide 3: 3Q marked by continued portfolio changes, growth and performance
11/3/2016 Doug Peterson President and Chief Executive Officer 5 3Q marked by continued portfolio changes, growth and performance • Concluded sales of J.D. Power, • Delivered organic revenue growth two pricing businesses, and in every segment Equity Research • Reduced average diluted shares • Acquire
Slide 4: Recent management appointments; revenue growth and productivity lead to margin improvement
11/3/2016 Recent management appointments Steve Kemps Martin Fraenkel Ewout Steenbergen Executive President, Executive Vice Vice President, S&P Global Platts President and General Counsel Chief Financial Officer (effective 11/14/16) 7 Revenue growth and productivity lead to margin improvement and EPS
Slide 5: Market Intelligence and Ratings lead adjusted operating margin gains
11/3/2016 Market Intelligence and Ratings lead adjusted operating margin gains 3Q 2016 vs. 3Q 2015 Ratings Market S&P Dow Platts Intelligence Jones Indices (includes J.D. Power for a portion of 3Q16) Revenue +9% +21%* +6% (8%)* Adjusted operating +17% +43% +1% (4%) profit Adjusted operating +330 +48
Slide 6: Ratings: Strong transaction revenue in global corporate and U.S. public finance markets
11/3/2016 Ratings: Strong transaction revenue in global corporate and U.S. public finance markets 3Q 2016 3Q 2015 Change Non-transaction $343 $343 ̶ Transaction $299 $244 +23% ($ in millions) 3Q 2016 HIGHLIGHTS: • Non-transaction revenue was unchanged with growth in surveillance fees offset by lower
Slide 7: Historical global issuance and forecast
11/3/2016 Historical global issuance and forecast ($, billions) 8000 Sovereigns International Public 7000 Finance U.S. Public Finance 6000 Structured Finance** 5000 Financial Services Nonfinancials 4000 3000 2000 1000 0 2012 2013 2014 2015 2016* 2017* *Full-year forecast. **Excludes transactions tha
Slide 8: Market Intelligence increased usage continues to drive improved revenue
11/3/2016 Market Intelligence increased usage continues to drive improved revenue Risk Research Financial Data & Analytics Services & Advisory Desktop & Enterprise SNL 3Q Revenue 3Q Revenue 3Q Revenue 3Q Revenue +6% +12%* +10% (8%) S&P Capital IQ U.S. FIG, RatingsXpress® had Decrease due to Desktop
Slide 9: S&P Dow Jones Indices: Revenue growth due to Asset-linked fees
11/3/2016 S&P Dow Jones Indices: Revenue growth due to Asset-linked fees Asset-Linked Fees (Primarily Exchange-Traded Funds): • Exchange-traded products industry recorded inflows of $126 billion in 3Q on pace for a record year • Average AUM associated with our indices increased 15% year-over-year; 1
Slide 10: Platts: Core subscription business led growth during the quarter
11/3/2016 Platts: Core subscription business led growth during the quarter • The core subscription business delivered mid-single digit revenue growth led by the Petroleum sector as additional customers added market data to their workflows • Global Trading Services’ double-digit revenue decrease was
Slide 11: Index and Ratings pursue ESG opportunities
11/3/2016 Index and Ratings pursue ESG opportunities Acquired Trucost Exploring new Green Bond Evaluation product This acquisition adds the gold Designed to provide an analysis standard carbon and natural and estimate of the environmental capital investment metrics to our impact of projects financed
Slide 12: Summary
11/3/2016 Summary • Completed sales of J.D. Power, two pricing businesses, and Equity Research • All segments delivered organic revenue growth • Bond issuance was robust in the third quarter despite the Brexit vote • Focus on growth and performance led to continued margin improvement • Integration o
Slide 13: 3Q 2016: Revenue growth, margin gains, and share repurchases drive EPS increase
11/3/2016 Financial highlights — key discussion points • Consolidated income statement results • Adjustments to 3Q earnings • Balance sheet, free cash flow, and return of capital results • Three-year $140 million productivity program completed • Financial impact of recent divestitures • 2016 guidanc
Slide 14: 3Q 2016: Non-GAAP adjustments to operating profit; Net debt snapshot
11/3/2016 3Q 2016: Non-GAAP adjustments to operating profit 3Q 2016 Gain on sale of J.D. Power +$722 Insurance recoveries, partially offset by +$17 legal settlements Net disposition/acquisition-related costs ($7) Total pre-tax gain excluded from adjusted results +$732 ($ in millions) 3Q 2016 Deal-re
Slide 15: Free cash flow ahead of plan
11/3/2016 Free cash flow ahead of plan 3Q 2016 3Q 2015 Cash provided by (used for) operating activities $1,171 ($356) Capital expenditures (67) (74) Dividends and other payments to noncontrolling (59) (67) interests Free cash flow $1,045 ($497) After-tax legal and regulatory settlements and 36 1,273
Slide 16: Recent divestitures will impact future results; 2016 EPS guidance increased
11/3/2016 Recent divestures’ will impact future results Recently Divested • J.D. Power • SPSE and CMA pricing businesses • Equity Research Combined Financial Impact • 2016 revenue: $310 million • 2016 pro forma adjusted EBITA: ~$108 million • 2016 pro forma adjusted diluted EPS contribution: ~$0.25
Slide 17: New reporting segment: Market and Commodities Intelligence
11/3/2016 In 4Q 2016, we will introduce a new reporting segment: Market and Commodities Intelligence • S&P Global Market Intelligence and S&P Global Platts will be included in the segment • 4Q results and full-year 2016 results of both businesses will be reported in this new segment • To facilitate
Slide 18: 3Q 2016 Earnings Call
11/3/2016 3Q 2016 Doug Peterson President and Chief Executive Officer Earnings Call Rob MacKay Interim Chief Financial Officer Chip Merritt Vice President, Investor Relations Copyright © 2016 by S&P Global. All rights reserved. November 3, 2016 REPLAY OPTIONS Internet: Replay available for one year