Slide 1: Verisk Analytics
Verisk Analytics Mark Anquillare Executive Vice President and COO
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 is a Leading Vertical Data Analytics Provider
Verisk is a Leading Vertical Data Analytics Provider The Verisk Way – Distinctives Verticals We Serve Financial Natural Insurance Resources Services Unique Deep Domain Data Assets Expertise Analytics Digital Insight via Global IT/Data Proprietary/ Framework Platforms Center Infrastructure Unstructur
Slide 4: History of Growth and Innovation
History of Growth and Innovation 1971 1980–1996 1997 2002–2008 2009 Today For-profit Verisk Analytics Scalable data and Not-for-profit Significant AIR Worldwide corporation formed and IPO analytic solutions offered advisory and enhancement of and Xactware transition completed to vertical markets rat
Slide 5: Attractive Business Model
Attractive Business Model • Recurring revenue stream and high barriers to entry − 80%+ (1) of total revenue is subscription and long-term contracts − Extremely high customer retention − Majority of revenue is prepaid quarterly or annually − Long-standing and deep relationships with our customers − D
Slide 6: Diverse, High Recurring Revenue Sources
Diverse, High Recurring Revenue Sources 1Q2016 Revenue Distribution (1) 1Q2016 Subscription Base (1) Energy & Financial Specialized Services 23% 6% Transaction Revenue 18% Risk Assessment Subscription DA 36% Revenue Insurance 82% 35% Decision Analytics 64% Notes: 1. From continuing operations which
Slide 7: Verisk: Strong Track Record of Top-Line Growth
Verisk: Strong Track Record of Top-Line Growth 14% CAGR Revenue (1) ($ millions) $1,761 $1,431 $1,324 $1,185 2012 2013 2014 2015 Notes: 1. From continuing operations which excludes the divested Healthcare business. 7
Slide 8: Verisk's Differentiated Financial Model
Verisk’s Differentiated Financial Model Fiscal Year Strong, Stable Revenue Growth (1)… and Leading Margins Power EPS (1,2) ($ millions),(organic revenue growth) (% EBITDA/Revenue),($ Earnings per Share) 51.9% 55.0% 50.9% 2,000 1,761 19.0% 1,800 50.0% $4.10 1,431 1,600 17.0% 45.0% 1,400 $3.60 $2.87 1
Slide 9: Unique/Valuable Data Assets are the Foundation for Our Solutions
Unique/Valuable Data Assets are the Foundation for Our Solutions 19B+ More than 19 billion records in commercial and personal lines • More than 1,800 insurers provide data 100 Models covering natural hazards in 100 countries • Almost 3 billion records processed each year 35 35 years of VIN auto info
Slide 10: Global Platform
SERVE | ADD VALUE | INNOVATE Global Platform Edinburgh x Guildford BR London Minneapolis Uxbridge Copenhagen Montreal Dublin {Munich Seocuae Calgary /_ Chicago J é \ Boston San Francisco - Fleet Se New York Lehi Y/ Astana “_Vienna Beijing vA Seoul Kathmandu. 4 Tokyo Jersey City Tel Aviv Gurgaon \ ¢
Slide 11: The Verisk Formula
The Verisk Formula Steadily Growing Increasing Financial Newly Acquired Businesses Powered Capacity Businesses at by Innovation, with Reasonable Prices Expanding Margins with Similar and Low Capital Characteristics Intensity Stronger and Larger Company We can continue to drive leading organic growth
Slide 12: Discipline and Execution
Discipline and Execution 1. Discipline 2. Execution • Drive operating leverage and scale • Hear the voice of the in existing businesses customer • Embrace innovation and investment • Commit to quality and • Strategic fit continuous improvement • Long-term economic return • Rigorously monitor the • F
Slide 13: Verisk Strength Built on P&C foundation
Verisk Strength Built on P&C foundation • Unique data sets, enhanced over time, have enabled growth into more decision processes at our customers − Since 1971, our P&C business has served as the industry standard − Leveraging long-standing relationships with innovation and new solutions has enabled
Slide 14: 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 15: Wood Mackenzie: An Overview
Wood Mackenzie: An Overview What do we do? How do we win? How have we What will drive future grown? growth? Provide leading Differentiated Strong financial Large and diverse commercial value proposition record addressable market intelligence to built on proprietary the global information, Subscripti
Slide 16: 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 Strategy value-creating solutions… • Unique and Proprietary Advertising Regulation Consortia Datasets • Deep Domain Expertise in Analytics and Banking Argus • Big-Data Technology P
Slide 17: Multiple Paths to Growth
Multiple Paths to Growth • Strong Track Record of BOTH Organic Revenue Increases and Effective M&A − 8% Historical Organic Revenue Growth − 16% Average Acquisition Revenue Growth • Opportunities Remain Large and Growing − Working to Execute on Both Organic and Acquisitions to drive growth • Share Re
Slide 18: Strong Capital Structure to Support Growth
Strong Capital Structure to Support Growth as of 3/31/2016 Investment Grade Ratings ($ millions) S&P: BBB- Bonds $2,300 Moody’s: Baa3 Revolver Drawn 0,705 Fitch: BBB+ Total Debt $3,005 Revolver expanded to Debt/ EBITDA (1) 2.7x 1,045 $1,750M, due May 2020 Covenant level (2) 3.75x 900 705 450 350 350
Slide 19: Verisk: Disciplined Capital Allocation
Verisk: Disciplined Capital Allocation Acquisitions and earn-outs Share Repurchase ($ millions) 2012 2013 2014 2015 (1) 1Q2016 Share Repurchase 163 279 778 20 116 Acquisitions and earn-outs 808 1 35 2,856 0 Cumulative Capital Allocation, $ billions (2) $1.4B, $3.7B, 27% 73% Notes: 1. 2015 acquisitio
Slide 20: Conclusion
Conclusion The best benchmark for Verisk is Verisk. Average organic revenue growth over the past ten years has been high single-digits • Our business is even better now than it was before • We should be able to grow over time and on average in a way that is consistent with the past We have expanded
Slide 21: Verisk Analytics
Verisk Analytics Mark Anquillare Executive Vice President and COO Contact Investor Relations david.e.cohen@verisk.com
Slide 22: Appendix
Appendix © 2016 Verisk Analytics, Inc. All rights reserved.
Slide 23: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EBITDA (1) ($ millions) 2015 2014 Net Income 487 354 Depreciation and amortization of fixed assets and intangible assets 167 95 Interest expense 121 70 Provision for income taxes 197 209 Plus: Nonrecurring items related to the Wood Mackenzie acquisition -59 Adjusted
Slide 24: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted EPS (1) ($ millions) 2015 2014 Income from continuing operations 487 354 Plus: Amortization of intangibles 70 30 Less: Income tax effect on amortization of intangibles -19 -11 Plus: Nonrecurring items related to the Wood Mackenzie acquisition -45 -- Less: Income tax
Slide 25: Non-GAAP reconciliations
Non-GAAP reconciliations Free Cash Flow (1) ($ millions) 2015 2014 Net cash provided by operating activities 624 489 Capital expenditures 166 146 Free Cash Flow 458 343 Notes: 1. Figures may not sum due to rounding. 25