Slide 1: Second-Quarter 2019 Investor Presentation
SECOND-QUARTER 2019 Investor Presentation July 31, 2019
Slide 2: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures Forward-looking statements in this presentation are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actu
Slide 3: Who We Are
Who We Are LEADING PROVIDER OF FINANCIAL, INSURANCE AND ADVISORY SERVICES TO PRIMARILY SMALL AND MIDSIZED BUSINESSES (SMB) IN THE U.S. A Top See Appendix 2
Slide 4: Key Financial Highlights
Key Financial Highlights TOTAL 2014 2018 CAGR GROWTH REVENUE (IN MILLIONS) $719.5 $922.0 28.1% 6.4% PRE-TAX INCOME (IN MILLIONS) $50.6 $79.8 57.9% 12.1% PRE-TAX MARGIN 7.0% 8.7% 170 bps GAAP EPS (FROM CONTINUING OPERATIONS) $0.59 $1.09 84.7% 16.6% 3
Slide 5: Revenue Profile
Revenue Profile Benefits and Insurance Services Employee Benefits Consulting Payroll / Human Capital Management Property & Casualty Financial Services Retirement Plan Services Accounting and Tax Government Health Care Consulting 31% Financial Advisory 2018 Transaction Advisory Revenu
Slide 6: Recurring Revenue
Recurring Revenue Recurring Revenue Project-based work Annual Tax Compliance Group Health Benefits Financial Consulting Government Health Care Valuation Consulting Compensation Studies Property & Casualty 80% Litigation Support 20% Payroll Transaction Advisory Retirement Plan S
Slide 7: Client Profile
Client Profile Target Clients SMB 50 to 2,000 $5M to $200M Employees in Revenue NATIONAL RESOURCES – PERSONAL SERVICE Total Business Client Retention 90,000+ 50,000+ 90% Clients Clients Rate 6
Slide 8: National Scale
National Scale 4,800 Team Members Boston Minneapolis New York 100+ Offices Salt Lake City Chicago Cleveland Philadelphia Mid-Atlantic Kansas City Denver St. Louis Phoenix/ Memphis 32 States Los Angeles Tucson San Diego Atlanta Tampa Bay 18 Major Markets South Florida OPPORTUNITY TO EXPAND INTO NEW A
Slide 9: Financial Services
Financial Services Business Advisory Services Accounting Provider Top 10 (1) Nationally 18% Tax 34% Government Health Leading Government Care Consultant 23% Health Care Consulting 25% Business Advisory Accounting Leading Consultant Revenue (in millions) $600.9 $540.3 $501.3 $465.1 $476.4 2014 2015 2
Slide 10: Benefits and Insurance Services
Benefits and Insurance Services Human Capital Individual Services Life Places to Work in Employee Best (1) Insurance 4% Benefits Payroll 15% Consulting 35% Top 20 Broker of U.S. Top 20 (2) Business Property & 20% Casualty 25% Retirement Plan Top 100 (3) Adviser Retirement Plan Services Revenue (in m
Slide 11: Focus on Growth
Focus on Growth REVENUE GROWTH COMPONENTS COMPOUNDED ANNUAL INTERNAL GROWTH RATE SINCE 2014 ORGANIC CROSS-SERVING 6.4% EXTERNAL ACQUISITIONS EARNINGS PER SHARE (from continuing operations) 16.6% 10
Slide 12: Growth by Cross-Serving
Growth by Cross-Serving Estimated First-Year Annualized Revenue (in millions) $40 $30 $33.7 $34.0 $32.4 $30.0 $28.1 $20 $10 $0 2014 2015 2016 2017 2018 Trust Co-location Training Recognition/ Reward 11
Slide 13: Growth by Acquisition
Growth by Acquisition ATTRIBUTES STRATEGY STRUCTURE • Successful local or • Focus on core services • Consideration based on regional company in specific geographic TTM EBITDA • Cultural fit markets • 50%+ paid up front • Strong leadership • Focus on high-growth • Balance paid on multi-year industrie
Slide 14: National Resource / Specialization
Competitive Advantage NATIONAL RESOURCES – PERSONAL SERVICE NATIONAL Strength PROVIDERS National Resource / Specialization CBIZ “We out-local the nationals and out-national the locals” LOCAL / REGIONAL Weakness Strength Proximity and Relationship 13
Slide 15: Financial Overview
Financial Overview CBIZ, Inc. 14
Slide 16: 2019 Highlights & 2019 Guidance
2019 Highlights & 2019 Guidance YTD YTD ORGANIC TOTAL SEGMENT 2019 REVENUE REVENUE GUIDANCE(1) GROWTH GROWTH FINANCIAL SERVICES 2.4% 2.2% - BENEFITS AND INSURANCE SERVICES -2.4% -1.1% - NATIONAL PRACTICES 7.9% 7.9% - REVENUE 1.2% 1.4% 3% to 4% GAAP EPS (FROM CONTINUING OPERATIONS) 11.5% 10% to 12% T
Slide 17: Revenue
Revenue YTD Revenue (in millions) $1,000 $949.7 - $922.0 $958.9 $800 $855.3 $799.8 $750.4 $719.5 $600 $498.7 $505.5 $400 $200 $0 2014 2015 2016 2017 2018 2019 (1) (1) Reflects guidance reiterated by the Company on July 31, 2019. This guidance speaks only as of this date and this presentation does no
Slide 18: Diluted Earnings per Share
Diluted Earnings per Share (from continuing operations) YTD Diluted EPS from continuing operations $1.20 $1.20 - $1.22 $1.00 $1.09 $0.97 $0.92 $0.80 $0.87 $0.76 $0.60 $0.66 $0.59 $0.40 $0.20 $0.00 2014 2015 2016 2017 2018 2019 (1) (1) Reflects guidance reiterated by the Company on July 31, 2019. Thi
Slide 19: Adjusted EBITDA
Adjusted EBITDA See Appendix for GAAP Reconciliation Adjusted EBITDA (in millions) $125 $109.1 $100 $104.0 $94.8 $87.0 $75 $82.2 $50 $25 $0 2014 2015 2016 2017 2018 Adjusted EBITDA Margin 11.4% 11.6% 11.9% 12.2% 11.8% 18
Slide 20: Capital Structure
Capital Structure STRATEGIC SHARE DEBT CAPEX ACQUISITIONS REPURCHASES LEVERAGE • Focused on high- • Opportunistic approach • Facility • Strong cash flow growth opportunities • Neutralize impact of newly improvements from operations • Typically complete issued shares • Office equipment • $400M unsecu
Slide 21: Operating Leverage
Operating Leverage GOAL IS TO IMPROVE PRE-TAX INCOME MARGIN BY 20 TO 50 BPS PER YEAR 10.0% Pre-tax Margin 8.0% 8.7% 8.7% 8.4% 7.7% 7.0% 6.0% 4.0% 2.0% 0.0% 2014 2015 2016 2017 2018 Adjusted G&A Margin(1) 4.7% 4.3% 4.5% 3.8% 4.3% (1) See Appendix for GAAP reconciliation. 20
Slide 22: Financial Goals
Financial Goals 2019 Goals(1) 3% TO 4% 10% TO 12% CONTINUED REVENUE EPS STRONG GROWTH GROWTH CASH FLOW Long-Term Goals - Beyond 2019 (1) Reflects guidance reiterated by the Company on July 31, 2019. This guidance speaks only as of this date and this presentation does not constitute confirmation or u
Slide 23: Investment Highlights
Investment Highlights OPERATIONAL FINANCIAL RESULTS LEVERAGE STRENGTH • Established national • Strong balance sheet • Proven ability to grow platform • Strong and consistent earnings at a faster rate • Full integration of cash flow than revenue growth acquired businesses • Credit facility provides •
Slide 24: Appendix
Appendix CBIZ, Inc. 23
Slide 25: 2018 Workplace Awards
2018 Workplace Awards 2018 Workplace Awards By the Numbers Best Workplaces for Consulting and Professional Services 2018 Workplace Excellence Seal of Approval 2018 Best Workplaces for Millennials 2018 America’s Best Mid-Size Employers Best Places to Work in Insurance 2018 2018 Top Entry-Level Employ
Slide 26: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation GAAP RECONCILIATION Income from Continuing Operations to Non-GAAP Financial Measures (1) (In thousands) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2019 2018 2019 2018 Income from continuing operations $ 16,614 $ 13,121 $ 54,179 $ 48,931 Interest expense 1,58
Slide 27: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation GAAP RECONCILIATION Reconciliation of GAAP Income from Continuing Operations to Adjusted EBITDA (1) (In thousands) Year Ended December 31, 2018 2017 2016 2015 2014 Income from continuing operations……………………………….. $ 61,573 $ 51,032 $ 40,607 $ 35,003 $ 30,414 Interest exp
Slide 28: Adjusted G&A Margin Reconciliation
Adjusted G&A Margin Reconciliation GAAP RECONCILIATION Reconciliation of GAAP Corporate G&A Expenses to Corporate G&A Expenses Excluding Deferred Compensation Plan (1) (In thousands) Year Ended December 31, 2018 2017 2016 2015 2014 Corporate G&A expenses…………………………………………..……….….. $ 39,173 $ 33,295 $