Clarivate Plc · NYSE:CLVT
Clarivate — Investor Day (November 2020)
112 slides from Clarivate's investor day presentation, Nov 10, 2020
Slide 1: Clarivate Investor Day
Clarivate™ Investor Day Mark Donohue Vice President, Investor Relations November 10, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements These materials contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current belie
Slide 3: Agenda
Mark Donohue, Welcome Agenda Vice President, Investor Relations Jerre Stead, Company overview Chairman and Chief Executive Officer Digital transformation – Melanie Fitzpatrick, a new way of working Digital First Transformation Mukhtar Ahmed, Science Group update President, Science Group Jeff Roy, IP
Slide 4: Welcome to Investor Day: submitting questions
To submit a question for Q&A Open the Question Panel by clicking the icon at the bottom of your screen—type your question and press send We1lcome t,o !Investor D1 ay Please include your name and company information when submitting Nove mbe:r 10, 2020 Questions will be answered during a live session
Slide 5: Turning ideas into innovations
Clarivate™ Turning ideas into innovations Jerre Stead Chairman and Chief Executive Officer November 10, 2020
Slide 6: World-leading assets serving large and stable end-markets
We have 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 Global, diversified cu
Slide 7: Business model provides clear path to long-term profitable growth
Business model provides clear path to long-term profitable growth Recurring subscription revenue with high retention and revenue visibility Recurring revenue ‘Build once, sell many times’ creates significant + profitable operating leverage incremental growth Low capital requirements allow high cash
Slide 8: Where we were at the end of 2019
Where we were at the end of 2019 Adjusted revenue1 Adjusted EBITDA1 Adjusted EBITDA Margins1 Adjusted Free Cash Flow $919M $292M 32% $101M Colleagues Customers Market-cap 4,500 18k $5B 12019 Excludes the disposal of the Mark Monitor brand protection, antipiracy and antifraud productions on January 1
Slide 9: Where we are today
Where we are today Adjusted revenue1 Adjusted EBITDA1,2 Adjusted EBITDA Margins1,2 Adjusted Free Cash Flow2 $1.717B 45% $617M $766M $919M $292M 32% $101M Colleagues Customers Market-cap 30k $20B 8,500 4,500 18k $5B 12019 Excludes the disposal of the Mark Monitor brand protection, antipiracy and anti
Slide 10: Clarivate's Purpose, Vision, Mission, Values
Clarivates Purpose We believe human ingenuity can transform the world and improve our future. Vision Mission Values We will improve We are a trusted, Aim for greatness the way the world indispensable partner to Value every voice creates, protects innovators everywhere and advances by delivering crit
Slide 11: Our four strategic goals
Our four strategic goals keep us focused and moving forward Continue to Further increase improve colleague customer delight score engagement score Goal 82+ Goal 80+ Sustainability DJSI-listed Focus on strong top- Provide superior world leader and bottom-line growth investor returns $1.5B revenue $40
Slide 12: Colleague engagement survey results
Our latest colleague engagement survey had a response rate of 90%, up 9 points from last year 2019 Strengths score 69 81 – feedback 2020 79 – communication Engagement – action taking score = 77 72 (benchmark is 74) Opportunities 69 – decision making 71 – growth 73 – belonging
Slide 13: Measuring customer delight
Measuring customer delight tells us where to focus our efforts 87 – quality of products and services 86 – information and insights 2019 57 – easy to do business with score 76 Overall Customer feedback: customer • Product and information quality make delight = 79 up over 70% of our positive comments
Slide 14: 2020 sustainability work and ESG goals
Highlights of our 2020 sustainability work; and our 2020 ESG goals Governance Social Environment 95% of colleagues 95% of colleagues Launched supply chain completed cyber security completed anti-bias ESG assessment and training; launched privacy training; launched global e-waste recycling center, ex
Slide 15: Strong top-and-bottom-line growth
We are delivering strong top-and-bottom-line growth through organic growth and revenue enhancing initiatives Insert footer
Slide 16: Acquisitions enhanced our portfolio: DRG
Acquisitions have enhanced our product portfolio: DRG Provide As one, Help Proven high-value data, we can deliver customers achieve track record analytics and insights greater value via commercial success of innovation and to pharma, biotech enhanced insights, in complex health customer focus and me
Slide 17: Acquisitions enhanced our portfolio: CPA Global
Acquisitions have enhanced our product portfolio: CPA Global CPA GLOBAL Lifecycle Global leader in management, Serving IP software and IP administration, 12,000+ law firm 3,000 colleagues, technology- research and corporate 29 offices globally enabled and analytics, customers daily services patent o
Slide 18: Realigned commercial infrastructure
We realigned our commercial infrastructure to serve customers more efficiently • Established three global business centers Built a strategic sales Belgrade, • Chandler, Serbia organization Arizona • Managing most customers through Inside sales to free up Field Penang, Sales time and optimize Malaysi
Slide 19: Technology is core to our success
Technology is core to our success at Clarivate Customer and company growth Creating Optimizing the Cultural evolution Customer value enterprise driving innovation with technology for growth convergence People Process Technology
Slide 20: Delivering on cost savings and efficiency initiatives
Delivering on cost savings and efficiency initiatives • Optimizing headcount • Rationalizing facilities Run-rate • Insourcing application development savings of $180 - $185M • Project Singularity • COVID response Exiting 2021 • Implementing a workforce of the future • Synergies with 2020 acquisition
Slide 21: The pandemic showed what's possible with our workforce
The pandemic helped us see what’s possible with our workforce Productivity and work fulfillment – New and more productive ways of working – Examining and improving every process and workflow Cost savings – Reduction of current office footprint – Relieve colleagues from location restrictions and trav
Slide 22: Reaffirming 2020 outlook and introducing 2021 guidance
Reaffirming 2020 outlook and introducing 2021 guidance ($M, except % and per share data) 2020 Pro forma Q4 CPA 2021 Adjusted revenue1 $1,280 - $1,295 $1,780 - $1,8402 % change YOY growth 31% - 33% 39% - 42% Adjusted EBITDA1 $480 - $495 $785 - $8252 Adjusted EBITDA margin %1 37% - 38% 44% - 45% Adjus
Slide 23: Our fundamental assets are unmatched
Our fundamental assets are unmatched • Business model with strong financial attributes Our • Critical levers to drive growth and profit industry-leading solutions enable companies • Embedded in customers’ critical core to bring life-changing workflows innovations to market, faster • Exceptional addr
Slide 24: Transforming our workplace
Clarivate™ Transforming our workplace Melanie Fitzpatrick November 10, 2020
Slide 25: The digital workplace is our catalyst
The digital workplace is our catalyst for a best-in-class organisation and culture, that will ensure we delight our customers and deliver returns to our investors ·f "ll.11 \ \I\ \\1 ll 11-11rt1 \ Ill l Insert footer
Slide 26: Our North Star
Our North Star A digital transformation of our culture and organization where every decision and every opportunity is approached with the assumption and mindset that the solution should be as digital as possible
Slide 27: Why now?
Why now? (Hint: the biggest risk is NOT doing it now) • COVID-19 started the surge • Cultural and operational barriers have been pushed aside • To ensure success, need to accelerate adoption of new culture, ways of working and technologies • History is littered with others that missed their opportun
Slide 28: Becoming a digital workplace is a journey
Becoming a digital workplace is a journey Then Now Next • Admin heavy, process • Years of advances in • Culture that empowers people based months • Grow business without scaling costs • Large office footprint • Everything under review • Access best talent where and when • Majority of people were fro
Slide 29: Data-driven, engagement-led approach to culture overhaul
We’re taking a data-driven and engagement-led approach to overhaul our culture and become a digital workplace Re-wiring how we think, feel and act • Structured program-led approach • Dedicated team of change specialists • Measuring to track and pivot when needed Changing where and how we work • Remo
Slide 30: Sustained benefits of workplace transformation
Sustained benefits of our workplace transformation will support our company strategic goals Colleague Engagement Customer Delight • Happier colleagues @ ~ [§] • Faster customer analytics • Improved well-being • More responsive teams – • Faster feedback easier to do business with Sustainability • Enh
Slide 31: Workplace rationalisation will deliver $23M+ savings
Workplace rationalisation will deliver $23M+ (50%) savings by end of FY21 through the exit or ‘right sizing’ of offices Retained smaller portfolio of workplaces resulting in 50%+ reduction in footprint • Future-state office designs across the globe – Operational hubs – Collaboration hubs • Implement
Slide 32: Opportunity to increase colleague engagement and productivity
This is our opportunity to increase colleague engagement, productivity and expand talent pool \ I / Leadership Colleagues What it takes What it delivers, a workplace that is: 1. Leading with hearts and minds 1. Human caring, flexible, transparent and 2. Connecting colleagues to our purpose connected
Slide 33: Science Group
Clarivate™ Science Group Investor Presentation Mukhtar Ahmed President, Science Group November 10, 2020
Slide 34: Quote: Change is the law of life
“Change is the law of life and those who look only to the past or present are certain to miss the future.” John F. Kennedy 0 Clarivate™
Slide 35: Our vision: improve human lives with integrated solutions
Our vision is to improve human lives with comprehensive and integrated solutions, that accelerate innovation from ideation to outcome across industries and research disciplines 0 Clarivate™
Slide 36: Socio-economic forces creating significant opportunities
Socio-economic forces creating significant opportunities Significant healthcare, scientific Insights Digitization Research sectors continue to be research and regulatory reforms disrupted by application of post Covid-19 with a greater Artificial Intelligence to appreciation and demand for expediate
Slide 37: Accelerating innovation from ideation to outcome
Accelerating innovation from ideation to outcome – we provide leading solutions for multi-industry, multi-disciplinary research OClarivate Cortellis.. Billions of OClarivate tJRG Web of Science.. Part of Clarivate data points Artificial intelligence from 1000s of harmonized Research Intelligence Clo
Slide 38: Investments centered around strategic goals
Our investments are centered around our strategic goals Organic and Maximize adoption Grow alliances Be a acquisitional growth of end-to-end and channels customer-focused into core and Research world-class adjacent markets Intelligence Cloud organization
Slide 39: Organic and acquisitional growth: DRG integration
Organic and acquisitional growth into our core and adjacent markets DRG acquisition and integration + Expanded presence into core markets (Commercial and Market Access, Medical Device) Enhanced content, product and services (Post-Approval products and services, RWD) ~IO~C:..•• Market Overview CJR G
Slide 40: Maximize adoption of Research Intelligence Cloud
Maximize adoption of our end-to-end Research Intelligence Cloud Expanding Life Sciences and Web of Science platforms Intelligence: Data, analytics and insights offerings • Generics • Drug discovery • Clinical trials CVID (Coronavirus, Virology, and Infectious Disease) Data Lake 1 Clarivate Web of Sc
Slide 41: Grow alliances and channels
Grow alliances and channels Innovation Exchange, Agent Network Innovation Exchange 0 -.i, ACCENCICT -- Access to 22 innovative software and data offerings * Curated system of trusted and approved partners @ blueprint' Certified applications delivered via Research Intelligence Cloud™ ONTOFORCE ~ Agen
Slide 42: Be a customer-focused, world-class organization
Be a customer-focused, world-class organization Customer Delight, Thought Leadership Creation of customer engagement function Focus on delighting our customers combining pre and post sales Creation of value function (development, “Pioneering innovations and providence are delivery, communications) d
Slide 43: Exceptional growth opportunity within core markets
Exceptional growth opportunity within our core markets Science Group core markets have grown from $4.9B to $20.4B 2017-19 CAGR 10.8% Academia and Pharma drug Commercial and Medical device and government research development market access data analytics 2017-19 CAGR 8% 2017-19 CAGR 10% 2017-19 CAGR 1
Slide 44: We have a compelling future
We have a compelling future Loyal customers, Mission-critical high retention rates offerings Clarivate™ Depth in Outstanding core markets growth potential Best -in-class Clarivate'" data assets
Slide 45: IP Group update
Clarivate™ IP Group update Jeff Roy President, IP Group November 10, 2020
Slide 46: Quote: Progress is not in enhancing what is
“Progress is not in enhancing what is, but in advancing toward what will be.” Khalil Gibran 0 Clarivate™
Slide 47: Delivering on our promises from 2019
Delivering on our promises from 2019 IP Group is well positioned to accelerate due to progress made against 2020 goals More analytics Content expansion and Partnerships and data new interfaces agreements Geographic shift Defend premium IP Cloud and Analytics & Integration and cross- Advisory team pr
Slide 48: Global market trends support Clarivate strategy
Global market trends continue to support Clarivate strategy Innovation and brand activity continues despite 2020 macro conditions +5.2% +21.8% +15.5% +5.7% increase in increase in increase in increase in patent utility model trademarks industrial applications applications applications design applica
Slide 49: Global strategy with localized solutions
Global strategy with localized solutions • Focused investments in local markets to align with global trends (especially China) • Rest of world grows steadily, but China accelerated brand activity in 2020 surpassing U.S. patent filers for first time Source: US PTO data from Clarivate
Slide 50: Analytics and advisory as a high-growth engine
Analytics and advisory turn a commoditized service into a high-growth engine Data and Technology and Consultant insights Customer methodology domain specialists targeted toward value Hundreds of data analysis Horizon scanning Better products and ideas Mitigate risk frameworks and KPI benchmarking Mo
Slide 51: Freeing Clarivate data from heritage applications
Freeing Clarivate data from heritage applications is enabling access to new markets Client partnerships Product mix Converting relationships Shift to higher-margin with market leaders into subscription products partnerships Data providers Non-traditional buyers Creating a market with Data lake strat
Slide 52: Quote: If you want to go far, go together
“If you want to go fast, go alone. If you want to go far, go together.” African proverb Clarivate™
Slide 53: Making it easier to buy more
Making it easier to buy more — enabling customer access to multiple packages is a priority End to end IP lifecycle management Drafting and Operations and Opposition and Innovation Search Commercialization prosecution Renewals litigation Life Sciences Patentability Docketing Patent and Claims Healthc
Slide 54: What we were buying with the CPA acquisition
What we were buying with the CPA acquisition CPA GLOBAL Sector By Geography • 12,000 customers 90% recurring / subscription 19% • 35% 30% • Opportunity 31% 50% – Improved product mix, 4% 12% multiple customer touch 8% 11% points ■ Pharma & Healthcare ■ North America – Enhanced market presence ■ Elec
Slide 55: IP Group commercial organization aligned to investments
IP Group commercial organization aligns to capitalize on investments C Aligns renewals business Renewals Managed Advisory and Applications with other critical revenue Services Analytics and Platform stream Protect and Expand IP Expand IP Grow platform Creates opportunity to grow patent and Services
Slide 56: Track record of executing on our plan
Solid track record of successfully executing on our plan Continued focus on quality assets that enhance the customer experience Nov Sep Oct 2019 2020 2020 -p CPA GLOBAL incoPat~ ~ Techstreef 1Pa rt nf C la1riva . e + Global + IP Lifecycle and + Patent - Disposition Case Law Transaction Management In
Slide 57: Quote: Control your own destiny
“Control your own destiny or someone else will.” Jack Welch 0 Clarivate™
Slide 58: The IP market is evolving at an increasing pace
The IP market is evolving at an increasing pace Clarivate is the only company positioned for the future of IP Clarivate™
Slide 59: The IP market is evolving at an increasing pace
The IP market is evolving at an increasing pace Clarivate is the only company positioned for the future of IP Time-to-market Strategize Prepare Develop IP Clarivate™
Slide 60: The IP market is evolving at an increasing pace
The IP market is evolving at an increasing pace Clarivate is the only company positioned for the future of IP Time-to-market Strategize Prepare File Protect Rising volumes Develop Examine IP Oppose Clarivate™
Slide 61: The IP market is evolving at an increasing pace
The IP market is evolving at an increasing pace Clarivate is the only company positioned for the future of IP Time-to-market Strategize Prepare File Protect Rising volumes Develop Examine IP Answers vs. data Oppose Protect Optimize Clarivate™
Slide 62: The IP market is evolving at an increasing pace
The IP market is evolving at an increasing pace Clarivate is the only company positioned for the future of IP Time-to-market Strategize Prepare File Protect Rising volumes Develop Examine IP Answers vs. data Research Oppose Invest Optimize Digitized workflow Discover Protect Clarivate™
Slide 63: The future of IP management: Clarivate IP Workbench
The future of IP management Clarivate IP workbench for enabling customer access to functionality and data Clarivate IP Workbench Modular to drive customer configurability Platform to seamlessly Applications BI Tools Micro Services integrate new acquisitions for functionality Integration Layer Enable
Slide 64: What to expect in 2021
What to expect in 2021: Leveraging partnerships, unique data and smart integration to become ubiquitous in the market Accelerators Content Accessibility • Partnerships • New derived data products • Data lake strategy • Packaging and cross selling • Normalized content • Advisory overlays • Enhancing
Slide 65: IP Group positioned to accelerate
IP Group positioned to accelerate • Market dynamics continue to support growth rates • Incredibly resilient business Summary • Demonstrated ability to quickly integrate both heritage offerings and new acquisitions • Unique offerings and unmatched scale continues to expand our competitive moat
Slide 66: 5-minute break
S Clarivate’” 5-minute break
Slide 67: Optimizing and accelerating our growth
Clarivate™ Optimizing and accelerating our growth Mike Morhardt Executive Vice President, Commercial Performance and Operations November 10, 2020
Slide 68: Differentiating how we sell to and service customers
We are differentiating how we sell to and service our customers to drive growth and optimize cost Key Accounts Optimize operations and costs Field Improve ease of doing business Accounts Improve retention, new logo and cross sell & up sell performance Inside Sales Accounts (GBCs) Clarivate™
Slide 69: Cross sell and up sell definitions
Cross sell and up sell – What’s defined gets measured Up sell Selling higher-value product versions (e.g. $$ more features/content/access) to $ existing customers who already subscribe to the ■- ■-- product line Cross sell Selling additional product lines and $ $$ services to existing customers who
Slide 70: Global business center strategy and focus
Global business center strategy and focus Strategy/focus Customer High value Value capture New logo Cost-to-serve spend/potential consulting & Up-sell Cross-sell (price) acquisition efficiencies partnership Key Accounts Field Accounts Inside Sales Accounts (Global Business Centers) low focus 0 high
Slide 71: Actions to drive growth and optimize costs
These actions will help drive growth and optimize costs Drive operational Establish centralized Inside Allow Field Sales to Exploit cross-sell excellence and optimize Sales function: concentrate on high opportunities by cost through centralized • Help improve renewals, growth opportunities systemati
Slide 72: Managing most customers through inside sales
.. , Accounts Clarivate will manage most of its customers through the inside to free up Field Sales time and optimize cost-to-serve Target end state Benefits • Improve customer delight by ensuring regular touch 20% points with fragmented customer base • Enable our Field Sales team to focus on high F
Slide 73: Our Global Business Centers are up and running
Our Global Business Centers are up and running Locations Chandler, Arizona Belgrade, Serbia Penang, Malaysia Functions • Inside Sales • Customer Service • Back-office e.g.: ‒ Revenue ops ‒ Content ops People1 235 86 72 44 33 Total colleagues Customer Service Inside Sales Revenue Other incl. Content
Slide 74: Expanding and optimizing our GBC strategy
We are shifting our focus to expand and optimize on our GBC strategy Strengthen the core and incorporate integrations GBC 2.0 1 (Improve ramp times through onboarding & training) 2 Expand our functional footprint Leverage best-in-class technology and implement 3 proven best practices 4 Develop our c
Slide 75: Driving cross-sell across Clarivate
.. , Accounts Driving cross-sell across Clarivate Potential Approach Status Results to date Launched • +1.5k incremental referrals Team Selling Feb 2020 • +$20M incremental pipeline • Forecast 3x closed-won Sales-led performance vs. 2019 Current revenue: $370M Potential cross-sell revenue: $146M • P
Slide 76: Accelerating our organic growth
Accelerating our organic growth • Build and expand Global Business Centers – Improved Customer retention (inside and field accounts) – Allow field to focus on larger customers and opportunities – Improve new logo acquisition • Target our cross sell opportunity – Sales incentives to drive collaborati
Slide 77: Clarivate Technology Group
Clarivate™ Clarivate Technology Group Stefano Maestri Chief Technology Officer November 10, 2020
Slide 78: Seamless transition within our technology group
Seamless transition within our technology group
Slide 79: Cultural evolution
... • ltJ Cultural evolution
Slide 80: Driving innovation: People
Driving innovation — People • Passion for the company – Contingent worker reduction – Strong collaboration • Strategic development centers – At scale – ....50% of the technology workforce
Slide 81: Driving innovation: Processes
Driving innovation — Processes • React to customer needs – Leverage agile investment • Metric driven decision making – Continuous improvement • Strong customer focus – UX practice – Product telemetry
Slide 82: Optimizing the enterprise
• • • • • • • • • • • • • Optimizing the enterprise / /. / •
Slide 83: Preparing for growth: IT systems
Preparing for growth — IT systems • Best in class IT business systems: – Workday, Salesforce, Netsuite, docusign … • Progress on consolidation – CompuMark & MarkMonitor complete – DRG in flight • ITIL adoption – Incident, Problem and Change management implemented
Slide 84: Singularity is underpinning our growth
Singularity is underpinning our growth ELIMINATE duplication MODERNIZE ABSORB technology growth Data Science MAXIMIZE DELIGHT efficiencies customers 0 Clarivate™
Slide 85: Creating customer value
Creating customer value • - ======::....:::=•
Slide 86: Our data science capabilities are second to none
Our data science capabilities are second to none • Tangible investment made • Delivering production-ready solutions • Differentiates product content accuracy • Powers new innovations
Slide 87: Leverage the power of the cloud
Leverage the power of the cloud • Capitalize on cloud disposition – 80% hosting in cloud - ::::::::.:..------==rf,..,..- • Serverless applications – Microservices reuse • Segregate our data from our platforms
Slide 88: Financial overview
Clarivate™ Financial overview Richard Hanks, Chief Financial Officer November 10, 2020
Slide 89: Path to continued profitable growth is clear
Recurring revenue Path to continued + profitable long-term incremental growth profitable growth is clear even during times of significant market = strong cash flow uncertainty = capacity to reinvest --~~~ r ........ ~ -.... ~
Slide 90: Clarivate continues to deliver on its priorities
Clarivate continues to deliver on its priorities Strategic Continuous LTM Pro Forma Acquisitions Operational Highlights Improvement Clarivate™
Slide 91: Strategic acquisitions established market-leading businesses
Clarivate’s strategic acquisitions have established market-leading businesses in Science and IP Tuck-ins to add Complete the life sciences Complete IP value chain, product capabilities value chain transform our platform CPA GLOBAL uenceBAse 11s1on• incoPat~ C, USTOM - RS FI ST OW Part of Cl,arivate
Slide 92: Operational improvement driving margins
Our continuous operational improvement has driven margins to high 30%s with mid-40% in clear sight • $70-75M of identified cost efficiencies post- public offering in May 2019 • $30M of DRG cost savings are tracking to plan laid out at time of acquisition • $75M of run-rate cost savings relating to C
Slide 93: LTM pro forma highlights
LTM pro forma highlights High-Single- $1.7B Adjusted Revenue1 Digit Adjusted Organic Growth1 81% 45% Adjusted EBITDA Less Capex Adjusted EBITDA Margins1 Conversion1 Notes: Figures reflect LTM Jun20 pro forma results; Pro forma financials reflect the full year impact of acquisitions, including CPA Gl
Slide 94: Pro forma business revenue mix
Clarivate is the platform of choice, spanning the innovation life cycle in the Science and Intellectual Property markets Pro Forma Business Revenue Mix By Product Group By Type By Geography 17% 21% 44% 56% 56% 50% 27% 29% Subscription Re-Occurring ■ Science Group ■ ■ ■ Transactional ■ Americas ■ EME
Slide 95: Revenue growth accelerated by accretive M&A
Recent revenue growth has been accelerated by accretive M&A rounding out core offerings Adjusted Revenue ($M)1 $1,400 $1,280 - $1,295 $1,200 $975 $1,000 $935 $951 $800 $600 $400 $200 $0 2017 2018 2019 2020 Growth 0.7% 1.7% 2.5% Mid-point 32% Clarivate™ 1See the Appendix for a reconciliation of GAAP
Slide 96: Adjusted EBITDA and margin
Platform architecting and timely separation from Thomson Reuters enables growth and accretive M&A; on a path to additional growth Adjusted EBITDA ($M) and margin (%)1 $600 Platform scaled $480-495 $500 through Building out accretive Driving 38% $400 standalone platform M&A $320 infrastructure optimi
Slide 97: Looking ahead: driving growth and margins
Looking ahead, driving growth and margins, extending the platform
Slide 98: Outward focus on customers to drive organic growth
Outward focus on customers will allow us to drive organic revenue growth into high single digits exiting 2021 Sales force expansion Global Consulting Business Centers Pricing /Inside Improved equilibrium sales UI/UX drives 4-5% pa Make retention our data rate ubiquitous
Slide 99: Streamlining initiatives driving margin expansion
Streamlining initiatives have enabled us to work smarter, scale quickly and drive margin expansion Headcount optimization Facilities rationalization Insource Completed for application prior acquisitions; development Replatform now focused on Portfolio with AI and CPA Global rationalization — machine
Slide 100: Status by savings program
Status by savings program Street Run-Rate Announcement Exiting 2021 ($M) $70-75 2019 Cost Optimization $75 (run-rate savings exiting Q1 2021) $30 DRG Synergies $30 (run-rate within 18 months of close) $5 COVID-related (permanent savings, $5 $30 in-year vs. 2020 plan) $75 CPA $75 (run-rate within 18
Slide 101: Capital allocation and return philosophy
Clarivate philosophy – capital allocation and return • Investing in: – Business transformation – Ongoing product and platform enhancements • Cash allocated to accretive M&A • Cash allocated to reducing leverage – Tuck-in acquisitions focused on proprietary databases servicing global markets – Scaled
Slide 102: Accomplished much in a short time: equity and debt structure
We’ve accomplished much in a short time Equity structure • Completed primary and secondary offerings – Increases public float to 283M shares, 74% of shares outstanding – Reduced private equity ownership from 71% to 26% (now 52% proforma CPA transaction) Debt structure • Lowered our average cost of d
Slide 103: Healthy balance sheet with solid credit ratings
Healthy balance sheet with solid credit ratings provides capital structure flexibility Balance sheet ($M) Q3 2020 Q4 2019 Cash $601 $76 Accounts receivable, net 239 334 Intangibles and goodwill 4,036 3,157 Total assets $5,150 $3,791 Deferred revenue 350 427 Accts payable & accrued expenses 273 186 D
Slide 104: Reaffirming 2020 outlook and introducing 2021 guidance
Reaffirming 2020 outlook and introducing 2021 guidance ($M, except % and per share data) 2020 Pro forma Q4 CPA 2021 Adjusted revenue1 $1,280 - $1,295 $1,780 - $1,8402 % change YOY growth 31% - 33% 39% - 42% Adjusted EBITDA1 $480 - $495 $785 - $8252 Adjusted EBITDA margin %1 37% - 38% 44% - 45% Adjus
Slide 105: Our purpose
Our purpose Recurring revenue + profitable We believe human ingenuity incremental growth can transform the world and improve our future. = strong cash flow = capacity to reinvest Clarivate™
Slide 106: Appendix
Appendix
Slide 107: Diluted Share Count and Enterprise Value Build
Diluted Share Count Enterprise Value Build @$28 @$32 @$36 (Forecasted as of and for the year ended December 31, 2021, $ in millions except for per share values) Comments Share Price Note: the analysis is not intended to replace the Treasury Stock Method as required under Ticker ASC 260, Earnings per
Slide 108: Non GAAP Reconciliation – Revenue to Adjusted Revenue
Non GAAP Reconciliation – Revenue to Adjusted Revenue Year Ended December 31, Year Ended December 31, Year Ended December 31, Descriptions 2017 2018 2019 Adjusted revenue and Adjusted EBITDA adjustments Actuals Actuals Actuals 1. Deferred revenue fair value accounting adjustment arising from Revenue
Slide 109: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures and Required Reported Data Descriptions Adjusted EBITDA adjustments Twelve Months Ended Twelve Months September 30, Ended December 31, 1. In 2020, this is related to a new transition services agreement and offset by the reverse transition services agreem
Slide 110: Non GAAP Reconciliation – Debt to Net debt
Non GAAP Reconciliation – Debt to Net debt September 30, December 31, (in millions) 2020 2019 Total debt outstanding $ 1,950.6 $ 1,665.0 Cash and cash equivalents 601.1 76.1 Total net debt outstanding $ 1,349.5 $ 1,588.9 Standalone adjusted EBITDA $ 458.3 $ 336.0 Debt / standalone adjusted EBITDA 4.
Slide 111: Non GAAP Reconciliation – Revenues, Net to Adjusted Revenues
Non GAAP Reconciliation – Revenues, Net to Adjusted Revenues Year Ending Year Ending Descriptions December 31, 2020 December 31, 2021 (Forecasted) (Forecasted) Adjusted Revenues, net Adjustments Low High Low High 1. The Company is evaluating the purchase accounting impact, including the deferred rev
Slide 112: Non GAAP Reconciliation – Net Loss Per Share to Adjusted Diluted EPS
Non GAAP Reconciliation – Net Loss Per Fully Diluted Weighted Shares Outstanding to Adjusted Diluted EPS Year Ending December 31, 2020 Reconciliation (Forecasted) Descriptions (in millions, except per share amounts) Low High Adjusted Diluted EPS Adjustments Per Share Per Share 1. Includes restructur