Transunion · NYSE:TRU
Transunion — Q3 2022 Earnings Presentation
27 slides from Transunion's earnings presentation, Oct 25, 2022
Slide 1: Third Quarter 2022 Earnings
Third Quarter 2022 Earnings Chris Cartwright, President and CEO Todd Cello, CFO October 25, 2022
Slide 2: Forward-Looking Statements and Non-GAAP Financial Information
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion’s management and are subject to significant risks and uncertai
Slide 3: Agenda
1 Market perspectives and financial highlights 2 Acquisitions integration progress 3 Third quarter 2022 financial results 4 Fourth quarter and full-year 2022 guidance © 2022 TransUnion LLC All Rights Reserved | 3
Slide 4: Market Perspectives
Market Perspectives Headwinds increase globally U.S. consumers remain Emerging markets resilient – high inflation, rising interest healthy with high employment with outsized growth in India, rates, supply chain constraints, and sound balance sheets. APAC and LatAm. Canada and geopolitical risks. Bus
Slide 5: Third Quarter 2022 Highlights
Third Quarter 2022 Highlights Adjusted EBITDA margin at high-end of 5% organic revenue growth range due to prudent cost management and excluding U.S. mortgage strong acquisition synergies Acquisitions performing Double-digit organic Attractive growth in well with revenue growth1 internationally, led
Slide 6: Bridge to Updated 2022 Revenue Guidance
Bridge to Updated 2022 Revenue Guidance +9.5% organic Q3 Q4 Update ex-mortgage ($7M) ($12M) ($4M) greater FX headwind; modestly ($7M) lower organic +7% growth; M&A ($33M) outperformed organic ex-mortgage No Change No Change $3,773M Tempered assumptions in Q4 across Financial Services and Emerging Ve
Slide 7: Neustar delivering on strategic and financial expectations
Neustar delivering on strategic and financial expectations Initiatives Progress • Combined Neustar and TransUnion marketing Neustar solutions growing double-digits YTD Drive revenue • New sales bookings tracking to expectations 1. 1 growth acceleration • Cross-sell pipeline building, including early
Slide 8: Strong performance from Sontiq and Argus
Strong performance from Sontiq and Argus Sontiq Argus • Mid-teens growth in Q3 • +4% growth in Q3 Expecting mid-teens growth for 2022E Expecting low-single-digits growth for 2022E • Adjusted EBITDA margin of ~31% in Q3 • Adjusted EBITDA margin of ~19% for Q3 Expecting ~30% margins for 2022E, o
Slide 9: Consolidated Q3 2022 Highlights
Consolidated Q3 2022 Highlights Reported Y/Y ($M) Change Revenue $938 26% ►Organic constant currency Constant Currency Revenue 29% growth, excluding mortgage, of +5% Organic Constant Currency Revenue 1% Adjusted EBITDA $341 13% ►Adjusted EBITDA margin of 36.3%; excluding Constant Currency Adjusted E
Slide 10: U.S. Markets Q3 2022 Highlights
U.S. Markets Q3 2022 Highlights ►U.S. Markets organic growth Organic (ex-mortgage) of +5% Reported Reported FX Inorganic Constant ($M) Y/Y Impact Impact Currency ►U.S. Financial Services organic growth (ex-mortgage) Revenue $621 38% — (40)% (2)% of +9% with good growth across Card & Banking, Financi
Slide 11: Consumer Interactive Q3 2022 Highlights
Consumer Interactive Q3 2022 Highlights ►Direct channel declined due Organic to reduced demand for paid Reported Reported FX Inorganic Constant credit monitoring products ($M) Y/Y Impact Impact Currency ►Sontiq (reported in inorganic growth) grew mid-teens Revenue $147 9% — (18)% (9)% ►Organic Adjus
Slide 12: International Q3 2022 Highlights
International Q3 2022 Highlights Organic Reported Reported FX Inorganic Constant ($M) Y/Y Impact Impact Currency ►India growth driven by Revenue $189 6% 10% — 16% strength across consumer, commercial and direct-to- Canada 32 6% 4% — 10% consumer Latin America 29 7% 6% — 13% U.K. 49 (11)% 15% — 4% ►U
Slide 13: Consistent Ability to De-Lever via Adjusted EBITDA Growth
TransUnion Has Shown a Consistent Ability to De-Lever via Adjusted EBITDA Growth Net Debt / Adjusted EBITDA Ratio 4.8x 4.2x 4.0x 3.9x 3.9x 3.9x ~3.8x 3.4x 3.5x 3.5x 3.1x 3.2x 2.8x 2015 IPO 2015 2016 2017 2018 2019 2020 2021 PF PF PF PF PF 2022E 2021 Q1 2022 Q2 2022 Q3 2022 • Roughly $5.9 billion of
Slide 14: Q4 2022 Guidance
Q4 2022 Guidance Reported Revenue: $896M to $916M +13% to +16% ► Revenue: Growth led by Assumed M&A contribution: ~19pt. benefit continued strength in International and U.S. Markets Assumed FX contribution: ~(3)pt. headwind (ex-mortgage) Organic Constant Currency Revenue: -3% to flat Assumed Mortgag
Slide 15: FY 2022 Revenue Guidance
FY 2022 Revenue Guidance Reported Revenue: $3.704B to $3.724B +25% to +26% ► U.S. Mortgage: Expect Assumed M&A contribution: ~24pt. benefit revenue declines of (30)% to (35)% in 2022 based on Assumed FX contribution: ~(2)pt. headwind inquiry declines of (40)% to Organic Constant Currency Revenue: ~
Slide 16: FY 2022 Adjusted EBITDA, Adjusted Diluted EPS and Other Guidance
FY 2022 Adjusted EBITDA, Adjusted Diluted EPS and Other Guidance ► Adjusted EBITDA: Adjusted EBITDA: $1.343B to $1.358B +16% to +17% Decreased due to lower Assumed FX contribution: ~(2)pt. headwind revenue expectations, offset Adjusted EBITDA Margin 36.3% to 36.5% by cost management actions and acqu
Slide 17: Considerations for 2023
Considerations for 2023 Assuming a soft macroeconomic environment, we expect to deliver solid organic growth, albeit likely below long-term targets • Mortgage: Inquiries expected to decline (<7% of total revenues) • Financial Services ex-Mortgage: Consumer remains healthy today, but conditions poi
Slide 18: Continuing to deliver relative outperformance in a recessionary environment
In a recessionary environment, we expect to continue delivering relative outperformance Diversified product and vertical portfolio to help offset credit-related pressures Expense discipline to manage expenditure as market conditions evolve Thought-leadership to support customers navigating challengi
Slide 19: 2025 Targets
$5+ billion Revenue 2025 $2+ billion Adjusted EBITDA Targets $6.00+ Adjusted Diluted EPS © 2022 TransUnion LLC All Rights Reserved | 19
Slide 20: Delivered healthy Q3 results
Delivered healthy Q3 Acquisitions integration Continue to expect a results with good growth on-track, with growing strong year, with ~7% from International and sales pipeline and organic growth excluding U.S. Financial Services, ahead-of-plan cost U.S. mortgage excluding mortgage, and savings strong
Slide 21: Q&A
Q&A © 2022 TransUnion LLC All Rights Reserved | 21
Slide 22: Appendices: Non-GAAP Reconciliations
Appendices: Non-GAAP Reconciliations © 2022 TransUnion LLC All Rights Reserved | 22
Slide 23: Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin Three Months Ended Nine Months Ended $ in millions September 30, September 30, As a result of displaying amounts in millions, rounding differences may exist in the tables above and footnotes below. 2022 2021 2022 2021 (1) Consisted of stock-based compensati
Slide 24: Adjusted Net Income and Adjusted EPS
Adjusted Net Income and Adjusted EPS Three Months Ended Nine Months Ended $ in millions, except per share data September 30, September 30, 2022 2021 2022 2021 As a result of displaying amounts in millions, rounding differences may exist in the table above and Reconciliation of net income attributabl
Slide 25: Adjusted Diluted EPS
Adjusted Diluted EPS Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Reconciliation of diluted earnings per share from net income attributable to TransUnion to Adjusted Diluted Earnings per Share: Net income attributable to TransUnion $ 0.41 $ 0.59 $ 1.15 $ 1.91
Slide 26: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate Three Months Ended Nine Months Ended $ in millions September 30, September 30, 2022 2021 2022 2021 Income from continuing operations before income taxes As a result of displaying amounts in millions, rounding differences may exist in the $ 110.8 $ 128.9 $ 316.1 $ 450.7 ta
Slide 27: Adjusted EBITDA and Adjusted EPS Guidance
Adjusted EBITDA and Adjusted EPS Guidance Three Months Ended Twelve Months Ended $ in millions, except per share data September 30, 2022 December 31, 2022 Low High Low High As a result of displaying amounts in millions, rounding differences may exist in the table above. (1) These adjustments include