Clarivate Plc · NYSE:CLVT
Clarivate — FY2022 Earnings Presentation
36 slides from Clarivate's earnings presentation, Mar 1, 2023
Slide 1: 2022 Year End Earnings Call
2022 Year End Earnings Call March 1, 2023
Slide 2: Safe Harbor Statement and Non-GAAP Financial Measures
Safe Harbor Statement and Non-GAAP Financial Measures Forward-Looking Statements This communication 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 business, events,
Slide 3: Agenda
Agenda Mark Donohue, Introduction Vice President, Investor Relations Jonathan Gear, Business Review Chief Executive Officer Jonathan Collins, Financial Review Chief Financial Officer Question & Answer 3
Slide 4: Business Review
Business Review Jonathan Gear Chief Executive Officer
Slide 5: 2022 Business Highlights
2022 Business Highlights FINANCIAL RESULTS KEY HIGHLIGHTS Revenue Adjusted EBITDA 1 Completed CEO Transition $2.66 billion $1.11 billion 2 Managed Portfolio via Divestiture ↑ $783M from prior year ↑ $312M from prior year 2.6% organic growth 41.8% margin 3 Pivoted Operating Model 4 Assessed Growth Po
Slide 6: Academia & Government Segment Highlights
2022 Selected by Singapore's National Library Board for nationwide digital transformation of all citizens' user experience and access to library resources Academia & Launched the next generation of Web of Science Government researcher profiles, unifying cross-Clarivate data to enable researchers to
Slide 7: Life Sciences & Healthcare Segment Highlights
2022 Delivered a custom data integration and analytics platform to a top 5 Pharma company to drive holistic patient journey and needs insights Life Sciences Expanded Specialty Pharmacy real world data coverage and analytics capabilities to support & Healthcare commercialization of growing field of b
Slide 8: Intellectual Property Segment Highlights
2022 Closed multi-million-dollar IP management software and services deals in Japan to support clients’ complex IP processes through IPfolio, our innovative cloud-based solution Intellectual Launched Brand Landscape Analyzer (BLA), a solution Property set to disrupt traditional TM search & watch by
Slide 9: 2023 Priorities
2023 Priorities 1 Accelerate organic growth above 2022 level 2 Complete integration cost synergies and pursue revenue synergies 3 Continue to drive efficiency to invest back into products while improving margins 4 Drive culture and elevate organization to enhance collaboration and innovation 5 Gener
Slide 10: Clarivate Investor Day March 9, 2023
Clarivate Investor Day March 9, 2023 Join us as we detail our plan to create shareholder value by leveraging our mission critical solutions and scale, created by interconnected end markets, Live video presentation designed to accelerate our starting at 9 am ET organic growth and fuel a path towards
Slide 11: Financial Review
Financial Review Jonathan Collins Chief Financial Officer
Slide 12: Q4 and FY 2022 Financial Results
Q4 and FY 2022 Financial Results Inorganic growth drove Changes from Prior Year revenue increase of 42% for full year with contribution $ in millions except EPS Q4 ‘22 Q4 ‘21 Change FY ‘22 FY ‘21 Change from organic growth Revenues, net $675 $561 $115 $2,660 $1,877 $783 Net Loss attributable to
Slide 13: FY 2022 Revenue and Adj. EBITDA vs. Prior Year
FY 2022 Revenue and Adj. EBITDA vs. Prior Year $ millions Organic growth of +2.6% was $832 $2,660 in-line with most recent expectations $97 Inorganic growth from PQ and Patient Connect, net of $48 MarkMonitor divestment, $1,877 contributed $832m with a +2.6% profit conversion of 30% on a pre-cos
Slide 14: Q4 and FY 2022 Cash Flow
Q4 and FY 2022 Cash Flow Interest expense increase due Changes from Prior Year to debt used to fund the ProQuest acquisition $ in millions Q4 ’22 Q4 ‘21 Change FY ’22 FY ’21 Change Higher capital spending Adj. EBITDA $304 $257 $47 $1,113 $800 $313 primarily from ProQuest acquisition One-Time Cos
Slide 15: FY 2023 Outlook
FY 2023 Outlook Organic growth expansion in Full Year Guidance Ranges 2023 from improvements expected in transactional vs. 2022 products and services ~3.25% Organic Growth 2.75% 3.75% +65bps Profit margin expansion as a result of remaining flow ~$2,680m through cost synergies from Revenues $2,63
Slide 16: FY 2023 Revenue and Adj. EBITDA Outlook vs. Prior Year
FY 2023 Revenue and Adj. EBITDA Outlook vs. Prior Year $ millions ~30% profit conversion on ~$85 ~$2,680 $2,660 ~3.25% organic growth reflects operating expense ~$65 +3.25% ~$0 investments to fuel product innovation Inorganic decline due to MarkMonitor divestiture Expect to recognize rest of P
Slide 17: FY 2023 Cash Flow Outlook
FY 2023 Cash Flow Outlook One-time cost reduction due Changes from Prior Year to completion of acquisition integrations $ in millions 2023 Outlook 2022 Actuals Change Higher cash interest expense Adj. EBITDA ~$1,130 $1,113 ~$20 on base rate increases Anticipate lower working One-Time Costs ~(4
Slide 18: Capital Structure
Capital Structure Expect to utilize majority of 10.0 Interest Coverage Total Debt / Net Leverage FCF to deleverage via TLB $ millions $ billions 8.0 $270 $5.6 and bring net leverage to <4x $252 $5.1 net this year 6.0 $3.5 $182 $1.7 Interest coverage expected 4.0 5.0x to remain >4x despite higher
Slide 19: Key Financial Metrics Trends
Key Financial Metrics Trends Organic growth pressure in ‘22 Revenue Adjusted EBITDA driven by continued softness $ billions $2.7 $2.7 $ millions in transactional sales and $1,113 $1,130 consulting services $1.9 $800 $1.3 $487 FCF expected to be up ~$200m $1.0 3.25% 42.6% 41.8% 42.25% as lower on
Slide 20: Appendix
Clarivate” APPENDIX
Slide 21: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures This presentation contains financial measures which have not been calculated in accordance with generally accepted accounting principles in the United States of America (“US GAAP“), including Organic/Inorganic Revenues, Adjusted EBITDA, Adjusted EB
Slide 22: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Adjusted EBITDA The use of Adjusted EBITDA instead of US GAAP has limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results of operations and operating cash
Slide 23: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Adjusted Net Income and Adjusted Diluted EPS We use Adjusted Net Income and Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS") in our analysis of the financial performance of the Company. We believe Adjusted Net Income and Adjusted Dilute
Slide 24: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Free Cash Flow and Adjusted Free Cash Flow We use Free Cash Flow and Adjusted Free Cash Flow in our operational and financial decision-making and believe Free Cash Flow and Adjusted Free Cash Flow is useful to investors because similar measures are
Slide 25: Reconciliation of Non-GAAP Financial Measures (QTD)
Reconciliation of Non-GAAP Financial Measures (QTD) The following tables present the amounts of our subscription, re-occurring, and transactional and other revenues, including as a percentage of our total revenues, for the periods indicated, as well as the drivers of the variances between periods. V
Slide 26: Reconciliation of Non-GAAP Financial Measures (YTD)
Reconciliation of Non-GAAP Financial Measures (YTD) The following tables present the amounts of our subscription, re-occurring, and transactional and other revenues, including as a percentage of our total revenues, for the periods indicated, as well as the drivers of the variances between periods. V
Slide 27: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures Net Income (Loss) to Adjusted EBITDA Three Months Ended Year Ended Descriptions December 31, December 30, Adjusted EBITDA adjustments (in millions); (unaudited) 2022 2021 2022 2021 1. Reflects the deferred revenues adjustment made as a result of purchase
Slide 28: Reconciliation of Net Loss to Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures Net Loss to Adjusted EBITDA Year Ended December 31, Descriptions (in millions); (unaudited) 2022 2021 2020 Net loss attributable to ordinary shares $ (4,035.6) $ (312.0) $ (350.6) Adjusted EBITDA adjustments Dividends on preferred shares 75.4 41.5 — 1. R
Slide 29: Reconciliation of Net Loss to Standalone Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures Net Loss to Standalone Adjusted EBITDA Twelve Months Ended December 31, 2022 Descriptions (in millions); (unaudited) Net loss attributable to ordinary shares $(4,035.6) Adjusted EBITDA and Standalone Adjusted EBITDA Adjustments Dividends on preferred sha
Slide 30: Reconciliation to Adjusted Net Income and Adjusted Diluted EPS (QTD)
Reconciliation of Non-GAAP Financial Measures (QTD) Net Loss and Net Loss Per Share to Adjusted Net Income and Adjusted Diluted EPS Three Months Ended December 31, Descriptions 2022 2021 Adjusted Net Income and Adjusted Diluted EPS adjustments (in millions, except per share amounts); (unaudited) Amo
Slide 31: Reconciliation to Adjusted Net Income and Adjusted Diluted EPS (YTD)
Reconciliation of Non-GAAP Financial Measures (YTD) Net Loss and Net Loss Per Share to Adjusted Net Income and Adjusted Diluted EPS Descriptions Year Ended December 31, Adjusted Net Income and Adjusted Diluted EPS adjustments 2022 2021 1. Reflects the deferred revenues adjustment made as a result of
Slide 32: Reconciliation to Adjusted Net Income and Adjusted Diluted EPS
Reconciliation of Non-GAAP Financial Measures Net Loss and Net Loss Per Share to Adjusted Net Income and Adjusted Diluted EPS Year Ended December 31, Year Ended December 31, Descriptions 2021 2020 Adjusted Net Income and Adjusted Diluted EPS adjustments (in millions, except per share amounts); (unau
Slide 33: Reconciliation to Free Cash Flow and Adjusted Free Cash Flow
Reconciliation of Non-GAAP Financial Measures Net Cash Provided By Operating Activities to Free Cash Flow and Adjusted Free Cash Flow Three Months Ended Year Ended December 31, December 31, (in millions); (unaudited) 2022 2021 2022 2021 2020 Net cash provided by operating activities $ 136.9 $ 18.3 $
Slide 34: Reconciliation of FY2023 Outlook Revenue and Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures The following table presents our calculation of Revenues, net for the FY2023 outlook: Revenues, net Variance Increase/(Decrease) Percentage of Factors Increase/(Decrease) Total Variance Total Variance Year Ending December 31, (Dollars) (Percentage) Acqui
Slide 35: Reconciliation of FY2023 Outlook Adjusted Diluted EPS
Reconciliation of Non-GAAP Financial Measures The following table presents our calculation of Adjusted Diluted EPS for the FY2023 outlook and reconciles this measure to our Net income (loss) per share for the same period: Net Income (Loss) Per Fully Diluted Weighted Shares Outstanding to Adjusted Di
Slide 36: Reconciliation of FY2023 Outlook Free Cash Flow
Reconciliation of Non-GAAP Financial Measures The following table presents our calculation of Free cash flow for the FY2023 outlook and reconciles this measure to our Net cash provided by operating activities for the same period: Net Cash Provided by Operating Activities to Free Cash Flow Year Endin