Clarivate Plc · NYSE:CLVT
Clarivate — Clarivate Analytics — Investor Presentation (November 2019)
32 slides from Clarivate's investor presentation, Nov 12, 2019
Slide 1: Focus, simplify, execute: The Clarivate way
Focus, simplify, execute The Clarivate way Jerre Stead CEO November 12, 2019
Slide 2: Forward-Looking Statements
Forward - Looking Statements The accompanying materials contain certain forward - looking statements regarding Clarivate Analytics Plc (the “Company” or “Clarivate”), its financial condition and its results of operations, anticipated synergies and other future expectations . Forward - looking statem
Slide 3: Clarivate has world-leading assets serving large and stable end-markets
Clarivate has world - leading assets serving large and stable end - markets • Leading provider of intellectual property and scientific information , analytical tools & services • Products support customers’ critical decisions in discovery, protection and commercialization of ideas and brands • Globa
Slide 4: Business model provides clear path to long-term profitable growth
Business model provides clear path to long - term profitable growth Highly - recurring subscription revenue with high retention and revenue visibility Significant operating leverage from ‘build once, sell many times’ Low capital requirements allow high cash flow conversion and strong reinvestment ca
Slide 5: Time-tested assets built on a legacy of more than 150 years
Our group of time - tested assets has been built on a legacy that goes back more than 150 years Oct 2016 Separate from Thomson Reuters Zoological Records founded by Zoological Society of London and British Museum 1864 1955 1957 2011 - 2012 1963 1980s 1990s Dr. Eugene Garfield invents citation indexi
Slide 6: What has happened since we set a goal in 2019
Here’s what’s happened since we set a goal in 2019 to acquire a great information services company Churchill Capital IPO (NYSE:CCC) Churchill and Clarivate merger announced Merger closes; Clarivate becomes public company (CCC) Jerre Stead becomes Chair and CEO Investor day Clarivate third anniversar
Slide 7: Building on a legacy of storied assets
Building on a legacy of storied assets
Slide 8: Separation from TR allowed us to focus on strengthening our foundation
…focus on strengthening our foundation • Implemented shared services model • Built independent operating functions • Completed ~100 technology separation workstreams • Branded as Clarivate • Began portfolio optimization with 1 divestiture and 4 tuck - in acquisitions Separation from TR allowed us to
Slide 9: What's working well
What’s working well • Well - established info services business • Leading market position • Assets vital to customers • Long - term customer relationships with most important organizations in industry • Separation from TR complete • Foundational infrastructure in place My perspective after being in
Slide 10: My perspective after 2 quarters: What we are doing differently
• Optimize infrastructure systems • Lean organizational structure • Sales structure and incentives to drive cross - and up - sell • Modernized product platforms • Advanced analytics • Pricing model • Capital allocation / portfolio evaluation • Sense of urgency • Build vibrant culture My perspective
Slide 11: Culture matters and is a priority at Clarivate
Culture matters and is a priority at Clarivate Glassdoor culture survey, July 2019 of employees stay because of culture Culture matters more than salary for Millennials consider mission and purpose when applying for a job believe it’s important to have a clear mission and purpose 65% 79% 89%
Slide 12: Clarivate's purpose
Clarivate’s purpose We believe human ingenuity can transform the world and improve our future.
Slide 13: Clarivate's vision
Clarivate’s vision We will improve the way the world creates, protects and advances innovation.
Slide 14: Clarivate's mission
Clarivate’s mission We are a trusted, indispensable partner to innovators everywhere by delivering critical data, information, workflow solutions and deep domain expertise.
Slide 15: Clarivate's values
Clarivate’s values Aim for greatness Value every voice Own your actions
Slide 16: Four strategic goals that will move us toward success
We have four strategic goals that will move us toward success Continue to improve colleague engagement score Further increase customer delight score Focus on strong top - and - bottom - line growth Provide superior investor returns Sustainability
Slide 17: Colleague engagement survey results
Strengths 75 – feedback 65 – communication 63 – action taking Opportunities 56 – decision making 61 – growth 68 – customer focus Our recent colleague engagement survey had a response rate of 81%, up 10% from last year Engagement score = 69 (benchmark is 72) 2020 goal 74
Slide 18: Customer delight survey results
86 – quality of products & services 85 – information & insights 55 – easy to do business with Customer feedback tells us: • Insight into decision - making critical • Products highly valued • Offerings perceived as best - in - class • Big opportunity to enhance user experience Overall customer deligh
Slide 19: Sustainability goals: Environmental, Social and Governance
Sustainability goals: Environmental, Social and Governance factors will play a key role in our success Q2 2020 - Conduct assessment Exit 2020 - More ESG transparency Q2 2021 - Complete submissions to Dow Jones Sustainability Index and Carbon Disclosure Project YE 2024 - List on Dow Jones Sustainabil
Slide 20: Engaged BCG to benchmark performance
• Engaged BCG to benchmark performance • Identified opportunities to: – ‘Right - size’ corporate functions – Centralize resources to eliminate duplication – Move majority of contractors to full - time colleagues – Simplify and automate processes – Improve customer penetration – Rationalize real esta
Slide 21: Actions deliver $70-$75M annual run-rate cash savings exiting 2020
• Scale more easily / efficiently • Integrate future acquisitions more quickly • Be more agile and flexible • Innovate more rapidly • Focus on customers • Leverage existing assets • Create cost savings and margin expansion • Accelerate product roadmaps • Leverage best practices These actions allow u
Slide 22: Customer base analysis reveals significant opportunities
An analysis of our customer base and their buying histories reveals significant opportunities $918 $346 $123 $36 $4 $0 $250 $500 $750 $1,000 Largest 500 A B C D Avg spend per client $k Customers by average revenue; percent of total revenue 500 320 1.5k 4k 12k+ 47% 15% 5% 13% 20% # of customers
Slide 23: Building a strategic sales organization
• Deploying strategies to drive growth • Cross - selling • Optimizing prices to close gaps and inconsistencies • Increasing number of logos • Serving customers more efficiently – Centers of excellence – Inside sales – Strategic account management Building a strategic sales organization Delivering hi
Slide 24: Technology has a very important role at Clarivate
Technology has a very important role at Clarivate Customer and company growth Optimizing day - to - day operations in a cost - effective way Protecting our systems, data and IP Enabling product innovation Providing solutions to drive value for our customers People Process Technology
Slide 25: Reaffirming 2019 outlook and introducing 2020 guidance
Reaffirming 2019 outlook and introducing 2020 guidance 1 Adjusted Revenue adds back $0.5M, $0.5M, $0.1M in 2019, 2019 pro forma, and 2020, respectively, in deferred revenues purchase d a ccounting adjustment. 2 Pro forma the divestiture of the Mark Monitor brand protection, antipiracy, and antifraud
Slide 26: Very large opportunities ahead as we build on our solid foundation
• Business model with strong financial attributes • Fundamental assets are unmatched anywhere • Embedded in customers’ critical core workflows • Strong, purpose - based culture in place • Multiple initiatives enabling us to continue to focus, simplify and execute • Critical levers to drive growth an
Slide 27: Appendix – Non-GAAP reconciliations
Appendix – Non - GAAP reconciliations
Slide 28: Non-GAAP Reconciliation - Revenues, net to Adjusted revenues
Non GAAP Reconciliation - Revenues, net to Adjusted revenues (in millions) Low High Low High Low High Revenues, net $ 961.5 $ 994.5 $ 961.5 $ 995.5 $ 949.9 $ 969.9 Deferred revenues adjustment (2) 0.5 0.5 0.5 0.5 0.1 0.1 Revenue attributable to business sold n/a n/a (55.0) (56.0) n/a n/a Adjusted re
Slide 29: Non-GAAP Reconciliation - Net Income to Adjusted EBITDA
Non - GAAP Reconciliation - Net Income to Adjusted EBITDA Low High Low High Low High (in millions) Net (loss) income (2) $ (170.5) $ (158.5) $ (166.6) $ (154.6) $ 2.3 $ 16.3 Benefit for income taxes 12.4 12.4 12.4 12.4 14.7 14.7 Depreciation and amortization 189.0 191.0 189.0 191.0 193.0 194.0 Inter
Slide 30: Non-GAAP Reconciliation - Net Income to Adjusted EBITDA (continued)
Non - GAAP Reconciliation - Net Income to Adjusted EBITDA (continued) (9) Includes primarily the net impact of foreign exchange gains and losses related to the re-measurement of balances and other one-time adjustments. (7) Share-based comensation expense for the year ending December 31, 2019 include
Slide 31: Non-GAAP Reconciliation - Adjusted EBITDA Margin
Non - GAAP Reconciliation - Adjusted EBITDA Margin Low High Low High Low High Adjusted revenues $ 962.0 $ 995.0 $ 907.0 $ 940.0 $ 950.0 $ 970.0 Adjusted EBITDA $ 290.0 $ 310.0 $ 290.0 $ 310.0 $ 330.0 $ 350.0 Adjusted EBITDA Margin 30% 31% 32% 33% 35% 36% Year Ending December 31, 2019 (Forecasted) Ye
Slide 32: Non-GAAP Reconciliation - Adjusted Free Cash Flow
Non - GAAP Reconciliation - Adjusted Free Cash Flow Low High Low High Low High (in millions) Net cash provided by operating activities $ 80.3 $ 102.3 $ 80.3 $ 102.3 $ 203.8 $ 227.8 Capital expenditures (55.0)$ (60.0)$ (47.0)$ (52.0)$ (43.8)$ (53.8)$ Free Cash Flow 25.3$ 42.3$ 33.3$ 50.3$ 160.0$ 174.
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