Attached files
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| EX-99.1 - MEDIA RELEASE - IHS Markit Ltd. | exh991q317.htm |
| 8-K - 8-K - IHS Markit Ltd. | q3-17earningsrelease.htm |
Q3 17 Earnings
Supplemental Financials
September 26, 2017
Forward-looking statements
This presentation contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as
“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” “aim” and similar expressions, and variations or negatives of these words. Without limiting the generality of the foregoing,
forward-looking statements contained in this presentation may include the expectations of management regarding plans, strategies, objectives and anticipated financial and operating results of IHS Markit.
IHS Markit’s estimates and forward-looking statements are mainly based on its current expectations and estimates of future events and trends, which affect or may affect its businesses and operations.
Although IHS Markit believes that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of
information currently available to IHS Markit. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual
results to differ materially from those expressed in any forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to, those risks discussed in IHS Markit’s
filings with the US Securities and Exchange Commission (the “SEC”). IHS Markit’s SEC filings are available at www.sec.gov or on the investor relations section of its website, www.ihsmarkit.com. However,
those factors should not be considered to be a complete statement of all potential risks and uncertainties. Other factors may present significant additional obstacles to the realization of forward-looking
statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational
problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on IHS Markit’s consolidated financial condition, results of operations, credit rating or
liquidity. IHS Markit does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise,
should circumstances change, except as otherwise required by securities and other applicable laws. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as
of the date of this presentation. All forward-looking statements are qualified in their entirety by this cautionary statement.
Important Information
IHS Inc. was the accounting acquirer in the merger with Markit Ltd. IHS operated, and IHS Markit operates, under a fiscal year that ends on November 30th of each year, while Markit operated under a fiscal
year that ended on December 31st of each year. As a result, financial results for the fiscal year ended November 30, 2016 will include 12 months of results of IHS and results of Markit from and after the July
12, 2016 closing date of the merger in the new Financial Services segment that IHS Markit has created. Unless otherwise indicated, certain presented stand alone historical results of Markit (now reported as
the Financial Services segment of IHS Markit) have been adjusted to reflect a November 30th fiscal year end.
Non-GAAP measures
Non-GAAP financial information is presented only as a supplement to IHS Markit’s financial information based on GAAP. Non-GAAP financial information is provided to enhance the reader’s understanding of
the financial performance of IHS Markit, but none of these non-GAAP financial measures are recognized terms under GAAP and should not be considered in isolation from, or as a substitute for, financial
measures calculated in accordance with GAAP. Definitions of IHS Markit non-GAAP measures to the most directly comparable GAAP measures are provided with the schedules to the most recent IHS
Markit quarterly earnings release and are available on IHS Markit’s website (www.ihsmarkit.com). This presentation also includes certain forward looking non-GAAP financial measures. IHS Markit is unable
to present a reconciliation of this forward looking non-GAAP financial information because management cannot reliably predict all of the necessary components of such measures. Accordingly, investors are
cautioned not to place undue reliance on this information.
IHS Markit uses non-GAAP measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it regards to be a more reliable indicator
of the underlying operating performance of the business and its ability to generate cash flow from operations. As a result, internal management reports used during monthly operating reviews feature non-
GAAP measures. IHS Markit also believes that investors may find non-GAAP financial measures for IHS Markit useful for the same reasons, although investors are cautioned that non-GAAP financial
measures are not a substitute for GAAP disclosures.
Non-GAAP measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to IHS Markit, many of which present non-GAAP
measures when reporting their results. These measures can be useful in evaluating IHS Markit’s performance against its peer companies because it believes he measures provide users with valuable insight
into key components of GAAP financial disclosures. However, non-GAAP measures have limitations as an analytical tool. Non-GAAP measures are not necessarily comparable to similarly titled measures
used by other companies. They are not presentations made in accordance with GAAP, are not measures of financial condition or liquidity and should not be considered as an alternative to profit or loss for
the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. As a result, you should not consider such performance measures in isolation from, or as a
substitute analysis for, results of operations as determined in accordance with GAAP.
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© 2017 IHS Markit. All Rights Reserved.
We are [reaffirming] 2016 guidance $ in millions, except for per share
amounts
2017
IHS Markit Guidance
Low Mid High Additional Commentary
Revenue $3,490 $3,525 $3,560 • Trending at high end
Total organic growth % 2% 3% 4%
Adjusted EBITDA $1,375 $1,388 $1,400 • Trending at low to midpoint
Adjusted EPS $2.02 $2.05 $2.08 • Trending at midpoint
Additional items of the following:
• Depreciation expense of $155 - $165 million
• Amortization (acquisition related intangibles) expense of $325 - $340 million
• Interest expense, net of $145 - $150 million, trending toward high end
• Stock-based compensation expense of $240 - $250 million
• GAAP effective tax rate of negative 5%
• Adjusted effective tax rate of 20% - 21%
• Weighted average diluted shares between 413 - 417 million
We are reaffirming 2017 guidance
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© 2017 IHS Markit. All Rights Reserved.
Quarterly Revenue by Reported Segment
Quarterly Revenue SEGMENT View
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For the period ended: Feb May Aug Nov Nov Feb May Aug
Q1 16 Q2 16 Q3 16 Q4 16 FY 16 Q1 17 Q2 17 Q3 17
Resources 181 191 186 182 739 177 177 177
Transportation 148 155 157 161 621 161 167 174
CMS 114 116 114 114 458 112 114 115
Financial Services 91 165 255 168 173 173
Total Recurring Fixed Revenue 443 462 548 621 2,074 617 631 638
Recurring Variable - Financial Services 57 107 164 106 116 110
Total IHS Markit Recurring Revenue 443$ 462$ 605$ 729$ 2,238$ 724$ 747$ 748$
Resources 35 30 24 31 121 20 47 25
(2)
Transportation 51 76 70 75 271 64 75 83
(3)
CMS 19 20 16 19 74 15 17 24
(4)
Financial Services 9 20 29 22 20 24
Total IHS Markit Non-Recurring Revenue 105$ 126$ 120$ 145$ 496$ 121$ 160$ 157$
Resources 216 221 210 214 861 197 224 202
(2)
Transportation 200 231 227 235 893 225 242 257
(3)
CMS 133 136 130 133 532 126 131 139
(4)
Financial Services 157 292 449 296 309 307
Total IHS Markit Revenue 548$ 588$ 725$ 874$ 2,735$ 844$ 906$ 905$
(1) Reflects reported IHS Markit results including Financial Services from July 12, 2016 - November 30, 2016
(2) Resources revenue impacted by the shift in CERAWeek timing. The event was held in the second quarter of 2017 versus the first quarter of 2016.
(3) Transportation revenue impacted by the shift in TPM conference timing. The event was held in the first quarter of 2017 versus the second quarter of 2016.
(4) CMS revenue reflects biennial contribution from BPVC in the third quarter of 2017.
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© 2017 IHS Markit. All Rights Reserved.
Quarterly Organic Growth
Quarterly Organic Growth
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For the period ended: Feb May Aug Nov Nov Feb May Aug Feb May Aug
Q1 16 Q2 16 Q3 16 Q4 16 FY 16 Q1 17 Q2 17 Q3 17 Q1 17 Q2 17 Q3 17
Resources -7% -8% -10% -10% -9% -8% -6% -4%
Transportation 10% 10% 9% 9% 10% 9% 9% 11%
CMS 4% 3% 0% 1% 2% 1% 1% 1%
Financial Services 3% 2% 2% 2% 4% 3%
Total Recurring Fixed 1% 1% -1% 0% 0% 1% 2% 2%
Recurring Variable - Financial Services 3% 11% 8% 12% 14% 4%
Total Recurring Organic Growth % 1% 1% 0% 1% 1% 2% 3% 3%
Resources 28% (2) -36% (2) -21% -3% -12% -48% 54% 1% -13% 5%
Transportation 9% 19% 9% 14% 13% 18% 1% 19% 10% 6%
CMS 3% -1% -44% (4) -20% -19% -20% -13% 48% -4%
Financial Services 10% -15% -8% 30% 11% 28%
Total Non-Recurring Organic Growth % 14% -6% -12% -1% -3% -5% 12% 21% 4% 4% 14%
Resources -2% (3) -13% (3) -12% -9% -9% -14% 3% -4% -8% -4%
Transportation 10% 12% 9% 11% 10% 11% 6% 13% 9% 8%
CMS 4% 2% -9% (4) -3% -2% -2% -1% 7% 1%
Financial Services 3% 4% 4% 7% 8% 5%
Total Organic Growth % 3% -1% -2% 1% 0% 1% 5% 5% 2% 3% 4%
(1) Reflects reported IHS Markit results including Financial Services from July 12, 2016 - November 30, 2016
(2) Normalized for the Q1 / Q2 CERAWeek evenut timing shift, resources non-recurring organic growth was (23%) in Q1 16 and (5%) in Q2 16.
(3) Normalized for the Q1 / Q2 CERAWeek evenut timing shift, resources total organic growth was (9%) in Q1 16 and (7%) in Q2 16.
(4) Normalized to exclude impact of BPVC, CMS non-recurring organic growth was (23%) and CMS total organic growth was (4%) in Q3 16.
(5) Reflects 2017 normalization for event timing between Q1 and Q2 (CERAWeek in Resources and TPM annual maritime conference in Transportation)
and for the exclusion of BPVC revenue within CMS.
2016 Reported (1) 2017 Reported 2017 Normalized (5)
© 2017 IHS Markit. All Rights Reserved.
Quarterly Financial Services Revenue
Financial Services Revenue
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For the period ended: Feb May Aug Nov Nov Feb May Aug
Q1 16 Q2 16 Q3 16 Q4 16 FY 16 Q1 17 Q2 17 Q3 17
Segment Revenue $
Information 131 131 133 131 526 133 138 140
Processing 59 63 64 63 249 62 68 61
Solutions 95 101 97 98 390 101 103 106
Total Financial Services Revenue 285$ 294$ 294$ 292$ 1,165$ 296$ 309$ 307$
Total revenue growth % 7% 9% 5% 1% 5% 4% 5% 4%
Segment Organic Growth %
Information 6% 6% 3% 4% 5% 4% 8% 5%
Processing -6% -8% 0% 9% -1% 12% 14% -3%
Solutions 3% 6% 6% 0% 4% 10% 5% 10%
Total Organic Growth % 2% 3% 3% 4% 3% 7% 8% 5%
Category Revenue $
Recurring Fixed 169 170 169 165 672 168 173 173
Recurring Variable 99 105 107 107 418 106 116 110
Non-Recurring 17 19 19 20 75 22 20 24
Total Financial Services Revenue 285$ 294$ 294$ 292$ 1,165$ 296$ 309$ 307$
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© 2017 IHS Markit. All Rights Reserved.
Quarterly Adjusted EBITDA by Reported Segment
Quarterly Adjusted EBITDA View*
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* Refer to financial earnings releases on www.investor.IHSMarkit.com for Adjusted EBITDA reconciliations to the nearest GAAP reported measure
For the period ended: Feb May Aug Nov Nov Feb May Aug
Q1 16 Q2 16 Q3 16 Q4 16 FY 16 Q1 17 Q2 17 Q3 17
Total Adjusted EBITDA
Resources 87 94 94 92 368 80 100 89
Transportation 73 91 89 101 353 90 98 110
CMS 28 31 33 36 128 29 32 32
Financial Services 65 125 190 129 139 138
Shared services (9) (14) (12) (16) (51) (7) (16) (18)
Total IHS Markit Adjusted EBITDA 180$ 201$ 269$ 338$ 988$ 320$ 353$ 351$
Adjusted EBITDA Margin %
Resources 40.5% 42.3% 44.9% 43.3% 42.7% 40.6% 44.5% 43.8%
Transportation 36.8% 39.2% 39.0% 42.8% 39.6% 39.9% 40.5% 42.8%
CMS 20.7% 22.7% 25.6% 27.0% 24.0% 22.6% 24.3% 23.1%
Financial Services 41.4% 42.9% 42.4% 43.7% 44.9% 45.0%
Total Adjusted EBITDA Margin % 32.8% 34.1% 37.1% 38.7% 36.1% 37.9% 38.9% 38.8%
Total margin expansion (bps) 170 350 490 510 420 515 480 170
(1) Reflects reported IHS Markit results including Financial Services from July 12, 2016 - November 30, 2016
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2016 Reported (1) 2017 Reported