S&p Global Inc. · NYSE:SPGI
S&p Global — Q1 2018 Earnings Presentation
20 slides from S&p Global's earnings presentation, Apr 26, 2018
Slide 1: 1Q 2018 Earnings Conference Call
1Q 2018 Earnings Conference Call Doug Peterson President and CEO Ewout Steenbergen Executive Vice President and CFO Chip Merritt Vice President, Investor Relations April 26, 2018 Comparison of adjusted information to U.S. GAAP information This presentation includes adjusted financial measures that a
Slide 2: Safe Harbor statement under the Private Securities Litigation Reform Act of 1995
“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, trends,
Slide 3: 2018 off to a solid start – 1Q 2018 highlights
Doug Peterson President and Chief Executive Officer 2018 off to a solid start – 1Q 2018 highlights include • Added leading-edge technology and unique data sets with the acquisitions of Kensho and Panjiva • Exceptional results delivered by S&P Dow Jones Indices as market volatility fueled exchange-tr
Slide 4: Strong organic revenue growth and U.S. tax reform generated significant EPS gains
Strong organic revenue growth and U.S. tax reform generated significant EPS gains 1Q 2018 1Q 2017 Change Revenue $1,567 $1,453 +8% Organic revenue $1,565 $1,453 +8% Adjusted operating profit $735 $680 +8% Adjusted operating profit margin 46.9% 46.8% +10 bps Average diluted shares outstanding 254.4 2
Slide 5: Strong new CLO issuance despite uncertainty surrounding risk retention rules
Strong new CLO issuance despite uncertainty surrounding risk retention rules CLO Issuance $45 $40 • Based on court ruling U.S. CLO $35 risk retention rules have been $30 eliminated $25 $20 • CLOs launched in late-March $15 without retaining 5% slices $10 $5 $0 U.S. Europe Global 1Q 2017 1Q 2018 (iss
Slide 6: Average U.S. bond maturities little changed this decade
Average U.S. bond maturities little changed this decade Investment Grade Speculative Grade 12 10 8 (Average, years) 6 4 2 0 Source: S&P Global Fixed Income Research 11 S&P Dow Jones Indices continues to innovate • Entered into agreement with Bolsas y Mercados Argentinos – Strategic agreement to laun
Slide 7: Platts pursues new growth opportunities
Platts pursues new growth opportunities • Deployed blockchain solution for Fujairah oil inventory data This new system efficiently transfers proprietary data in a more secure environment • CME Launched Black Sea grain future These contracts will be cash-settled against the Platts price benchmark for
Slide 8: Panjiva adds unique data sets and technology to Market Intelligence
Panjiva adds unique data sets and technology to Market Intelligence Panjiva is a technology company that builds proprietary machine learning algorithms to transform messy shipment records into clean, useful data 15 Don’t forget to register 16
Slide 9: Solid operating results to start the year
Ewout Steenbergen Executive Vice President, Chief Financial Officer 17 Solid operating results to start the year 1Q 2018 1Q 2017 Change Revenue $1,567 $1,453 +8% Organic revenue $1,565 $1,453 +8% Unallocated expense $46 $36 +28% Adjusted total expense $832 $773 +8% Adjusted operating profit $735 $68
Slide 10: Stock-based compensation creates tax benefit
Stock-based compensation creates tax benefit 1Q 2Q 3Q 4Q 2018 EPS impact $0.04 FASB Accounting Standard requirement to record the tax effect related to share-based payments at settlement (or expiration) through the income statement results in lower reported tax expense 1st Quarter: In 1Q 2018, $0.04
Slide 11: Revenue gains in every business segment led by S&P Dow Jones Indices
1Q 2018: Non-GAAP adjustments to operating profit Pre-tax expense excluded from adjusted results 1Q 2018 Deal-related amortization ($24) ($ in millions) 21 Revenue gains in every business segment led by S&P Dow Jones Indices 1Q 2018 vs. 1Q 2017 S&P Dow Market Ratings Platts Jones Intelligence Indice
Slide 12: S&P Dow Jones Indices: Exceptional revenue and adjusted operating profit growth
S&P Dow Jones Indices: Exceptional revenue and adjusted operating profit growth 1Q 2018 1Q 2017 Change Revenue $214 $171 +25% Adjusted segment operating profit $149 $116 +28% SPGI share of Adj. Seg. Op. Profit* $109 $86 +27% Adjusted segment operating profit 69.5% 67.9% +160 bps margin Trailing four
Slide 13: S&P Dow Jones Indices: Strong YOY growth in ETF AUM
S&P Dow Jones Indices: Strong YOY growth in ETF AUM associated with our indices Asset-Linked Fees: • Exchange-traded products industry net inflows were $128 billion in 1Q • 1Q average ETF AUM associated with our indices increased 28% YOY • Quarter ending ETF AUM associated Quarter Ending ETF AUM wit
Slide 14: Ratings: Delivered revenue growth and adjusted profit margin expansion
Ratings: Delivered revenue growth and adjusted profit margin expansion 1Q 2018 1Q 2017 Change Revenue $748 $714 +5% Adjusted segment operating profit $408 $377 +8% Adjusted segment operating profit 54.7% 52.8% +190 bps margin Trailing four quarters adjusted 54.0% 51.3% +270 bps segment operating pro
Slide 15: Ratings: Structured finance delivers bulk of revenue growth in 1Q 2018
Ratings: Structured finance delivers bulk of revenue growth in 1Q 2018 $800 Revenue $748 $714 $700 +12% $88 $79 (12%) $49 $600 $57 $58 +30% $76 $500 CRISIL, Other* $110 +5% $116 Governments $400 Structured $300 Financials +2% $419 Corporates $200 $410 $100 $0 1Q 2017 1Q 2018 ($ in millions) *Other i
Slide 16: Market Intelligence: Business highlights
Market Intelligence: Business highlights • Historically all products, outside of desktop products, were sold as enterprise-wide commercial agreements • As we institute enterprise-wide commercial agreements in desktop products, approximately 70% of former Capital IQ desktop customers have been conver
Slide 17: Platts: Core subscription business growth muted by Global Trading Services
Platts: Core subscription business growth muted by Global Trading Services 1Q 2018 1Q 2017 Change Revenue $196 $191 +3% Adjusted segment operating profit $95 $98 (4%) Adjusted segment operating profit 48.0% 51.1% (310 bps) margin Trailing four quarters adjusted 46.3% 43.1% +320 bps segment operating
Slide 18: Capital position remains solid – cash balance reduced by $1 billion ASR
Capital position remains solid – cash balance reduced by $1 billion ASR 1Q 2018 4Q 2017 Cash and cash equivalents $1,756 $2,779 Short and long-term debt $3,570 $3,569 Adjusted gross leverage* $5,896 $5,893 Adjusted gross leverage 1.9x 1.9x to adjusted EBITDA ($ in millions) * Adjusted gross leverage
Slide 19: 2018 current GAAP guidance reflects Kensho acquisition
2018 current GAAP guidance reflects Kensho acquisition Initial GAAP Current GAAP Mid single-digit Mid single-digit Revenue increase increase Corporate unallocated(A) $160 – $170 million $190 – $205 million* Deal-related amortization N.A. N.A. Operating profit margin 47% - 48% 45% - 46% Interest expe
Slide 20: 1Q 2018 Earnings Conference Call – Replay options
1Q 2018 Earnings Conference Call Doug Peterson President and CEO Ewout Steenbergen Executive Vice President and CFO Chip Merritt Vice President, Investor Relations April 26, 2018 1Q 2018 Earnings Conference Call REPLAY OPTIONS Doug Peterson President and CEO Internet: Replay available for one year G