SPGI - Earnings call transcript Q1 2018

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Operator

Good morning and welcome to S&P Global's First Quarter 2018 Earnings Conference Call. I'd like to inform you that this call is being recorded for broadcast. All participants are in a listen-only mode.

We will open the conference to question-and-answer session after the presentation and instructions will follow at that time. To access the webcast slides, go to investor.spglobal.com, that is investor.spglobal.com and click on the link to the Quarterly Earnings Webcast. now introduce would I Instructions] like Mr. to [Operator Investor S&P Global. Merritt, Vice for of President Chip Relations Sir, begin. you may

Chip Merritt

Good morning. Peterson, XXXX Thank and a call. and Presenting news you Steenbergen, Chief for joining this Ewout our morning, call S&P Financial morning's release Officer. are we Vice with results. Doug Executive President This CEO; on and President Global's issued earnings quarter first

reconcile and copy they In and provided a meaningful the need This measures of non-GAAP the release difference the can the corporation's today's management's. downloaded you between comparable release as and information. and schedules, periods in calculated financial of GAAP. the comparisons we're the If financial that corporation's to earnings U.S. to call, investor.spglobal.com. be at earnings financial same make providing during between accordance the perspective business conference release with from enable adjusted operating the The performance investors is measures exhibits view contains information

materially we descriptions for historical we to have of Before Litigation Exchange periodic call of projections, U.S. Except this our ownership results and risks and more also in teleconference contained aware In the matters and differ XX-Qs, impact on Private are obtain to in Commission. and discussed some understand actual within or meaning forward-looking anticipated the do Any on may has to and and cautionary cause statements. a statements and subject company. European in that of expects of potentially your listeners a forward-looking XXXX, the We're regard, Any uncertainties to this attention I current provide with future remarks filed give from events. me to current regulation. of the the investor about Act the would or are other to to the begin, like based results to such these us Securities with estimates, expectations Securities should economic reports investor certain conditions S&P direct XX-Ks, on that forward-looking information, statements. statements the call may cautionary we Reform X% call. need contain including Global who statements Form media legislation representatives of better I the

this call However, be for media we to Feuchtwanger questions directed at turn the over call and Doug? is XXX-XXX-XXXX. to to Jason intended time, this ask would Doug investors, At would Peterson. from like the I that

Douglas Peterson

Thank the glowing. Economies morning. increasing the off Equity for Global are great volatility XXXX. is a Good war. potential But face you, around today. Welcome Chip. S&P the call to markets in globe and to world start waits trade

investment $X.X S&P billion excluding support We through received shares contributed We of generated Leveraging Kensho declined tax the we Dow me share have we're and repurchases company, previously results XX.X% highlights. U.S. data revenue. result billion leading-edge million items. our billion and begin to repurchase as market Adjusted with basis Jones tax XXX a And cash quarter. $XX and initiated delivered as derivative approximately Indices in of to points new share to record fueled in disclosed, data Global dividends free first $X majority rate as programs. the unique with $XXX reform. Foundation community effective flow We to accelerated and with from technology Let Panjiva. the the $X exchange-traded million thrilled exceptional S&P ASR. the program quarter in certain technology critical so acquisitions the the to returned with increasingly a sets the becoming is first added of volatility

the company basis. a both on and reported X% at closely reported results, the growth more Looking organic financial revenue

X%. impact the foreign excluding revenue increased of exchange, However,

an expect profit We delivered adjusted in the EPS XX.X%. guidance operating adjusted to our fully full XX.X% year XX% improvement points. We diluted XXXX with operating XX of consistent Our margin our margin adjusted increased for profit growth. basis

however, and with In investment-grade in strength quarter finance while from the in finance issuance and the increased of decreasing which XX% EPS strength finance ABS, place, yield quarter, more the XX% a from Our excluding the strong. first structured CLOs, XX% issuance these quarter of benefit with down a United Geographically, however, make In try realize. the up sovereign size stock out we issuance, difference of The decreasing revenue and due information exercises. high Structured ABS. majority Ewout Europe, option the made decreased with color XX%, included businesses. decreased some always of tracking declining from point China When issuance data, is ForEx XX%, we like Global debt Asia, the that more RMBS. future in structured the to of finance, $X.XX moment. a current X%, public takes increasing was and issuance, rate. issuances quite on do in in provide on will is favorable high impact to $X.XX type vast increased decreasing that in in deals and first was debt, X%. Asian XX%, the primarily investment-grade tax in CLOs unchanged we to where local the issuance X%. What drivers of I'd provide and next XX%, States yield issuance don't our

never programs, and there issuer between revenue later, of revenue. As because you'll perfect see frequent correlation and issuance non-transaction-related pricing, a is

In despite quarter, in increased. decline fact, global issuance the during a Ratings revenue

concluding particular, continued quarter surrounding The Court despite retention risk DC rules. was issuance was the U.S. structured uncertainties the of One Appeals regulators for Circuit ruled new against Board, [Indiscernible] risk to last, of under the strengths that CLOs, and in appeal credit the the an Reserve period subject of This CLOs. not during rules Fed not was U.S. the and the There Dodd-Frank. SEC to are chose mandated appeal. retention that

been a looking managers' the align to interest to primarily loans, of continue issued investors rated are the some Bank are over abide managers or growing preference leveraged by have loan typically for and the some to part Bank typically retention mandatory, loan ratings have with longer ratings related Ratings BB+ no -- on lower. risk While past expressed a years. theirs. business few debt

for While chart average bond our XX bond dollars they the a and haven't. maturities couple than high-yield the of average a start into loan investment-grade was interest by demonstrates $XX We're investors This revenue asked to bank rating lengthened sought rates year million quarter first perspective is chart next stretch This since data at have maturities term Both maturities less virtually solid a that unchanged it to further longer have frequently low past if XXXX. depicts million, treasurers U.S. as corporate The on been years. the takes market. XXXX. a future. ago,

Turning to Dow Jones S&P Indices.

which We're standard S&P Average. it Yield and Investment-grade issuance made bonds Dow the Carbon financial Mercados India, We sustainability XX XX data a its and on We includes we Dow the Bolsas metric of in up indices, S&P BSE regional America High trade Index the agreements XXX, S&P is on last, ESG monthly launched international the Mexico, S&P index to Index measure to corresponding Bond investment-grade exchange XXX a our network, Index, largest continue It display a in S&P launched Indices XX XXX the and Mega And XXX to S&P includes basis. on conjunction of Mexico. Jones alongside And with the innovation. metrics S&P XX of with Brazil, in XXX Peru, securities Chile, Chile, exposure as to Industrial representing including Trucost, the Peru, Jones began criteria. provider been invest forefront Bond S&P we the Mega is family. from publically Mega acquired XXXX, the our S&P y in which XXX organization Index. carbon composed Colombia, exchange Argentinos majority Jones investing publishing index-based to addition in equity of Latin Indices Global securities, in the our at MILA is data future. The our added source to indices and has for meeting Dow is the company This MILA. BSE issuers. XXXX. first

in commitment for S&P provide the critical swap participants Sea Platts new Sea data over the quarter, Price first CME there's increasingly This first the Sea to this production, grain Russian the with partners to by should to bordering a traded XXX,XXX the developing quarter, believe and from more Sea. Benchmark correlations highlighted global The Since across digital and tons our Platts the Last developed Next sector. a application, a corn grain markets been then, up, to Black countries first In oil is the that Black full blockchain ongoing Global. for oil markets. markets. Platts Black wheat, region cash-settled the base in S&P and has our energy wheat The represent first counter. looking Black is future than a developed conjunction for on prices launched appeal complex wheat market OTC with example exports corn. we Ukrainian trade. We encompasses Global of transformation an in at Fujairah, in project, blockchain new deployment traders

Panjiva export Most Market in was beverage, Intelligence. health chain named activity multiple supplies weights, agriculture, quarter, shippers, electronics, data, intelligence sectors, their new records a companies and Panjiva of Fast core other not advanced thrilled Panjiva consignee we macro million designs we are relationships, will customers. new for we care. for cargo and essential dramatic supply this chain and supply that link, we March, and capabilities we supplies Company's shipment embedded trade but search. analytical Panjiva Kensho's development data. new risks employing tools Kensho's in improved products to future, applications workflows across expertise in and IT have provide. products, language that tests to Kensho enhance the on drive experience flows, including coverage data well. areas expertise And Their turn synthesize and Innovative time, Their faster, billion and rich available. applications Turning X natural attracts during shipping technology, top added on first raw processing, how to as and supply level stands Data more. List. we're Also businesses the globally. Companies and us Over individual allow companies only in our new ports, of efficiencies. Fundamental driven data the a Global, user over talent, mitigate visualization, food like capital to import but By customer in data automotive, Panjiva create and not goods, has and into the by data for research closed ingest, science Automation April. and only evolution capabilities X economic and on shipment S&P can our expect acquisition technology data experience drive chain-related to pharmaceuticals, will

Our MI to plan of all the is platform. migrate Panjiva into functionality the

Day be please who Finally, time. in to that we investors The Investor webcast. RSVP I be and to want person, will will hosting of remind XXth. event May on But analysts for you those institutional attend ahead an wish

turn Ewout, the call specifics during provide our you. the on me to quarter. Let over results business will who more Thank

Ewout Steenbergen

Thank EPS. additional good provide few to call. our I everyone items. morning in touch the line other results. like increase like quarter morning, a you, on on to XX% and to adjusted Doug This X% the already diluted revenue first color discussed and growth the around would Doug I would

not and a our Xst, believe XXX, customers First, results. adopted a new ASC material have rule, on accounting impact will on financial with we from revenue that it January contracts

first You can XX-Q. quarter in our information further find

Foundation. tax to and million I contribution, quarter impacted which margin. dramatic $XX points. reform, the would also this decline unallocated in rate. in million $XX and The expenses primarily to contribution, operating expenses was due in margin profit adjusted Without The contribution contribution our $XX $XX a Without tax increase most this increased to perspective. expense department put XXX item unallocated profit total due is expenses adjusted fees. Second, over reduced million professional during the like This lower Global U.S. adjusted million executive our reduction increase S&P effective operating to and would this the was the declined basis resulted have impactful into adjusted

EPS by to price. depending the stock-based fourth impacts whenever our tax that benefits price also in of associated SPGI's grants EPS would from with quarter as market earnings and estimated XXXX on the the This share During of XXXX adjustment EPS value $X.XX, we $X.XX grant call, compensation increase differs exercise option stock is the tax reported employee activity. expense. ex-vesting impact fair an impact from The

a $X.XX. expense or adjusted on share impact $XX and adjusted The on quarter. company's segment. that the reduction S&P the EPS first quarter, quarter million revenue. of per in Net of tax positive to operating The in pretax by recorded bulk improved positive primarily a During the by the first and Dow rates in revenue first had impact we quarter, only contributed hedges, the was quarter exchange $XX $X.XX was about a million the expense. impact foreign that adjustment in the non-GAAP Ratings made the Jones during euro business Ratings British impacted segment was by amortization revenue deal-related gains every was led in million In $XX Indices, pound. profit first

points, Intelligence operating notable, adjusted was profit led growth margin indices at also was operating segments. XXX Market XX% growth at and growth respectively, adjusted outstanding. XX% business X% growth Indices every and of basis While profit

adjusted XXXX the every for an full in we that year range let our segment comment. only Not a to XX.X% business margin While this adjusted an add improvement. earlier me it fully Doug's four contribute guidance improvement with to to is expect all expect segments profit operating our every unrealistic will to XX.X%, do profit quarter, for to have of operating consistent expect margin in increase we business

to increased operating business adjusted in to both turning points a start revenue operating in derivatives a XXX This let's indices this Revenue performance to asset-linked basis strong adjusted gains profit and Now, individual led in such quarter, fees. surge segments. a in with XX% Since exchange-traded large had and increase increase margin there. XX.X%. the XX%

when exchange-traded market OTC category. XX%, more. setting volatility or increased revenue by derivatives Extraordinary during activity. The quarterly for this million, to certain days to driven S&P from ETFs, previous rose funds, in increase Exchange-traded Asset-linked $XX derivatives and fees, new led record the the were mutual this XX there average increased perspective, derived To by ETF was XX% a quarter, derivatives, AUM. changed XXX million. first put volatility principally are which XX% record trading $XX into X% a

reaching ETF the there For only assets totaled $XXX the subscriptions investments AUM into ending then year due XXXX. quarter indices products data and indices. increased continued XXXX, the of trillion, the inflows to billion. revenue up full to X% And quarter in The days. moving of trend such eight were of XX% exchange-traded in custom growth passive with subscription first $X.XXX first net tied versus quarter industry The our

inflows the result $XXX last As the of chart shows, this billion $XXX was of the XX over market net billion months. appreciation of and

end The proxy volume year-over-year. futures quarter include increased XX%, S&P fixed Options, activity, contracts quarter. during associated with XXX average first first changes Key increased XX%. AUM indices strong our the was revenue which and for XX% This Exchange-traded derivatives is which quarter Index options grew better very than and fares. the a

Complex increased activity addition, In the at Equity XX%. CME

increased adjusted Adjusted XX.X%. X% Now, points a moving the revenue Ratings from to or ForEx. while Ratings. impact to increased X%, excluding basis XXX profit operating X% favorable increased margin operating

the adjusted manage four margin fees basis. primarily business service see, can ratings, operating transaction associated quarters XX%, on rating surveillance, the the increased you new points. entity revenue And XXX and that in we on As Loan basis due growth said past, to basis, in we Ratings with rolling evaluation fees. increased have a

quarter as entity are their flurry ratings customers rating. in than to us activity first the quarter customers New are year. first more our from that a XX% first had last new There coming of was we of for in

and a in rating corporate addition, were slightly fees products. public XX%. up jump larger in decreased corporate revenue than with carve-outs, as In gains declines and Transaction structured our X% finance over activity service were evaluation in M&A bonds

number it during issuers business, helped the volatility market a quarter. temporary our of first would-be While sidelined index

markets to often had the equity little when no was bond days declines, corporate there sharp issuance. the On

look revenue were decreased due revenue U. mentioned. the at declined gains and the impacted category XX% decline issuance. governance, If primarily S. issuance in well was to U.S. as CLO by Corporate the activity due activity as finance. in Doug increased by only you and markets, strong revenue finance you see public Europe Structured The structured in both its Ratings was various that can CMBS the U.S. in to increased that greatest finance ABS

now In X% profit increased first to improved Market the quarter, me X%. Intelligence. Let turn operating revenue adjusted and

declined of margin and in technology, and We increased commercial due fully expect operating data exchange, increased XXX points, adjusted investments Intelligence XXXX. expenses. cost, foreign Our basis primarily Market for in to timing increase margins to

Here, I business want to briefly highlights. review some

desktop We is important have business, were discussed the understand the agreements commercial movement products enterprise-wide that through commercial it agreements all essentially already. for sold outside desktop products, our as but enterprise-wide to

our desktop instituting first Intelligence converted. Market for increase on of in agreements the during IQ realized former emphasis we the quarter, the commercial XX% had Also of periods. the approximately prior With end a users desktop been quarter, versus by the business, enterprise-wide active customers desktop XX% Capital

the several Market Mike the continues platform more Chinn during during as commercial were update Investor for As will progress Intelligence rollout new our Day. platform, there new comprehensive releases progress give on and first a quarter.

revenue, all Intelligence. grew more mid-single-digit growth three providing increased RatingsDirect respectively. RatingsXpress low Looking products leading Market and data at XX%, strong for teens Services growth. growth, Intelligence solutions Risk components delivered Desktop deeply revenue management X% Market and grew X%, with

declines. the primarily expenses. The timing year margin the of certain first and revenue, by Derivative Turning business in to timing global adjusted declined, trading to weakness weak our primarily operating of trading was trading lower was products. the to as In in Platts, revenue, mid-single-digit expenses. increased declined diluted and certain core XXXX, quarter. X% profit growth exchange, subscription services The Platts which metals revenue in in global margin experienced services due oil mid-teens due foreign progressed,

be to in stable more XXXX. margin the expect We quarter-to-quarter from

petroleum smallest had majority The you the make and revenue Platts four categories business. two its at and X% up delivered and each or petrochemicals growth. and categories, gas growth, primary of look and little largest no can power you that the metals markets, by ag, see If two the

Now position. turning to our capital

$X from accelerated balance approximately we to the share initiated was in by due end Our billion the reduced cash the quarter. first repurchase agreement of XXXX that

since basically Our XXXX. the debt was end unchanged of

adjusted as gross by X.X Our measured leverage debt EBITDA, coverage, adjusted to remains times.

was First year. March compensation to quarter payments in free incentive that million, each cash $XXX due the occur flow

flow quarter is of the lowest free year. cash First the generally

and open of million more shareholders As first for the returned ASR, a in the share billion million market the repurchases, in to dividends. company billion in capital, than quarter with return $X $X.X $XXX $XXX

During initial shares market from X.X ASR the shares. the the under open X.X purchases received we million and shares quarter, of million

will I XXXX Now, our guidance. review

the and of our Kensho as Please guidance. our part approximately and spot that $X.XX guidance due differences rates. As well as shows guidance of integration guidance amortization are ForEx March from This The guidance. announcement, slide initial mind our depicts on GAAP our we slide. highlighted in keep our lowered retention market current on this adjusted cost. GAAP slide This reflects current Xth, GAAP intangibles initial to by increased our guidance

deal-related $XX acquisition. amortization by increased the as Our a $XX Kensho result million to million of

our will plans results for integration to questions. diluted year guidance cost. anticipated expenses addition, be expectation Since solid items have EPS very compensation and We're equity well Chip let for call year begun over me of turn first guidance And as we the to XXXX that, the and that with with as strong from company. these was a back incur your replacement will both the awards results, quarter post-acquisition our for changed. adjusted In adjusted reflects our retention pleased not are our excluded

Chip Merritt

Thanks Ewout.

participants. couple first Operator, of take now our will a Instructions] for phone we our question. Just instructions [Operator

Operator

Thank you, sir.

Patnaik will line with question open. from Barclays. first Manav Our Sir, is come your

Greg Bardi

on made questions one-time touch actually ask quarter for on that some maybe in is down I This but of can in the in coming on investments understand first had quickly just commercial margins calling the and investments I the there, Market the items Intelligence. Hi. making Manav. wanted you're you technology side. some you to Greg quickly the

Ewout Steenbergen

the a should revenue our commercial Indeed, business. clearly the salesforce. in a And expansion strong growth strategic the also the we're stimulate of investing growth technology. In commercial, Market market Intelligence of in Thank expansion organic have in technology, organic said announced we help think we higher than business. investments the future. Intelligence and Market sales investments have revenue in of This very Ewout. expect in growth, and much X%, to key will so today future think we're gaining What the you priority Yes. Greg. you in to With should share position respect you, platform. is we about commercial market and our with about in in growth that order investments salesforce That's is

we contribute a we should this improve Intelligence Market company during for during to during of XXXX. total overall overall, So, second for quarter Market in year. to And already the see to XXXX. margins margin expect expect growth Intelligence the margins the step-up

Greg Bardi

be that Okay. then really the that just subscription strong That that growth thoughts XXXX which the showed of makes get coming growth So, you the the is some How terms versus also And piece of quickly, for Ratings about in the that probably that the and on subscription strong. pieces sense. the business, on moving off is thinking we some some services? piece from on results Ratings. forward Thanks. evaluation you of should in of going monitoring

Douglas Peterson

Doug. is Greg, this

in we've investing what the our that. I you Ratings, of what activities to be Day been some all across issuer the growth tell get our our you including about businesses, be are to bit components Let providing about of ability the years. are a going ratings way rates fees, outlook commercial same in about Ewout couple having Investor But in last of a in talked and there. we to to tell our just me as going don't that some salesforce commercial forward. that are more of our frequent for activities when We're of the And you what components information surveillance. place, little valuation going for just the the have services, some include

into growing in entities terms increased of and frequent has quarter new been are we've issuer And the rated, all that which fees, of of XXXX, fees. entity over so go our number which this last

of that's So, another one areas. the

market more throughout expands area. see issuers more activity, you key services, more to could drivers to are as M&A as that lead which As those that you ratings the see evaluation of coming the year,

Greg Bardi

much. so Thanks Okay.

Douglas Peterson

Thanks Greg.

Operator

Thank you, sir.

comes with UBS. question next Our Kramm from Alex

Your line is open.

Alex Kramm

to, you. question on think, margin. Thank back everyone. first morning the coming asked I the Yes. Good Maybe just

I think, yourself noted Ewout, than you this were non-GAAP there that adjustments amortization. intangible no other quarter

like So, there's a of one-timers cost here it lot integration looks not than anymore.

So, just work Or a do something still biggest you differently If is that that inefficiencies personally you temporary still past? in driving you your the other more, by there do can doing see still that margin blip? integrating see you when it that and to highlight comes by is can the upside segment. just maybe

Ewout Steenbergen

good Yes, Alex. morning

items. I not think call so done. be but about of respectful callers opportunities, be to restructuring all this could the have for of much around some for expenses. about the can Normally, all talk that certain I be It the adjustments taking. a we're absolutely, legal are rest questions. next In would positions that more initiatives one-time seriousness, there's that lot there is or

have the have You new that commercial with forth. not anything to no a businesses, markets, should no respect technology, between lot this restructuring that implementation quarter collaboration we and opportunities during so happening. read we so company new on commercially and the products, growth, of concepts, within identified new activities new the of there opportunities certainly are announced There's efficiencies, that in efficiency

to insight at respect in are of But certainly to during with Day. more you on done. we that our our terms Investor margins, So, planning aspiration not we're that point we definitely a give are

lot On going the there's company contrary, the of we still in of forward. runway margin a believe expansion terms for

Alex Kramm

discussions sounds some back these there's in to coming Intelligence enough. Market getting whole to and more secondly, where we move, When to the Thank business pricing in point And then the push starting management talk enterprise think Fair senior to growth right. cetera. the on I involved All side. it the some you. is back and like pricing et increasingly be of clients, that

you do a Maybe like would budget-constrained better forward? feel maybe a for Or but going use So, I time you just tools having to it's that wondering, lever you world, making you're in the have you Chinn, you like feel mean, have pricing do the if harder this -- all be have increases? a Mike for that view case too. helpful, still

Ewout Steenbergen

have enterprise-wide always customers Alex, we happy. react It's it's to examples lot very good hard agreements to aware very anecdotal actually we of where to a where changes the become are of a transition. anecdotal Yes, because In effect, it the additional you've of lot in active we've lot for provides have we seen and users announced a And of more now. users platform platform. what increase XX% value for than the a examples

a So, overall, this We today. in positive we is believe and that agreement us you're way. very giving transition signal enterprise-wide to don't recognize going particular or the constructive trends that to

Alex Kramm

Fair enough. Thanks again.

Ewout Steenbergen

Thank you.

Operator

Kramm. Thank you, Mr.

Our next question comes from Hamzah Mazari with Macquarie.

Your line is open sir.

Unidentified Analyst

us an the oil Hamzah. through in for this us -- about Platts thinking how both Can down-cycle? and walk you up-cycle you're [Indiscernible] in can give filling is Hi, you business

Douglas Peterson

is Yes. This Doug.

start me Let with that.

the given a transaction-oriented that stability years see First but typically up-cycles stability our that core seen us seen more which is then know of from over and business are to GTS on you investment, as pullback that. when a have take in business And there's continue our is consulting business organization over than base advantage transaction-type time We the spending. where there's more of is because has What industry. we there's of is business, a we've down-cycle, a generally you more we've subscription the or all, do business, dependent more approach. the other

pressure to in think delinquencies actually kind higher bankruptcies, back defaults some industry oil in had of know, we experts a although are range. $XX between investment the now. be to Platts above the oil it's oil of and number oil and $XX which years, using that Ratings mode. our to see we've the range, plan as prices getting gas from there's you an in negative built range $XX We of and the for information the past prices sectors has that the that As few from well. our going that is range right some But business ways been And that which out,

see -- that over business coming we we this we can steady we in. that think So, models, growth see smoother many compared have a see business see in to the to other of we we time, growth and how more a approach a

Unidentified Analyst

All question. be going And the in specifically, past you're rates? the And frame Can then issuance of seeing different color. right. for the how may then interest that bond Thanks throughout versus unrelated light term the cycle for higher us longer you cycles? forward

Douglas Peterson

of Yes, drive a growth. bond well, first bond factors issuance know of which we all as growth you couple know -- there's

first is The growth. GDP

And so increased that U.S. has U.S. the tax reform of strong, fact, added basis up for the XXX points growth. to our has in growth Chief to because XXX Economist that be about to year growth this in expectations GDP to market continue X.X% our

issuance GDP And underlying bond important so most factor we for is growth.

about would look days, about historically, bond bond to there points, historic grade tight. compared most inflation. been in last that tight of if Secondly, interest happens have the rate. The what years, low talking on if XXX as six continuing impact about this We right at up to lot is week but we now, those a XXX, in year, links rate be been XXX see X% to you speculative very, X% are basis the look you how of composite are overall numbers But rates. this at few with historically, But that the bond or to very last points very investment-grade spread basis recent have was rates does five low XX-year look The and last close spreads have issuance. into quarter we first bond averages. people very an was because moved but the year,

what there's number Its it's growth as the So, of in are a are we rate at it's factors. a GDP, really spreads, underlying interest are driver rates, of what bond what growth expectation, economic key overall. issuance the inflation but look

Unidentified Analyst

a Thanks All right. lot.

Douglas Peterson

you. Thank

Operator

you, Mazari. Thank Mr.

question from Morgan with next Our Toni comes Stanley. Kaplan

open. is line Your

Jeff Goldstein

your to but mean that should Should anticipating there Jeff there, for causing is a Hey, be this are had last flow was this step-up that Goldstein Thanks. within we and interpreting some healthy this on indices flattish pretty through higher reinvestment largely year year? I quarter. be there we margin revenue reinvestment you a pretty know Toni.

Ewout Steenbergen

Overall, our grow to we like margin as business range. fast in that mid-XX% that the as we business can is that with of indices approach would

exceptional up margins based if volumes, have the exchange-traded but will that on continue. quarter going So, question we is the indeed derivatives seen this

Of at course, kind of correlated a the that It's margin depends to a lot stay objective on directly level. market this new particular company that volatility, for market be but volatility. shouldn't to

we initiatives and ESG, and with range. to business, concepts growing would like kind income in grow the beta, mid-XX% do you think like of by smart the in to to reinvest, continue this margin we I international. room of expectation like the products within new like create should like would indices, fixed that that indices invest we And like business

Jeff Goldstein

that internationally growth? like pretty great. your that helped Okay, both. then And it quarter you about drive at despite comps than what was looked a higher international the Thanks. growth seeing domestic tough you're lot ratings in talk Can

Douglas Peterson

Yes.

from growth quarter. a for bonds, some the Europe were you actually did finance across this very a cetera. out But was was coming to issue you If saw the business, of part issuance et market but also go RMBS, of domestic quite business. in combination overall, strong speaking, main across ABS, Asian Europe our last the do that growth the strong covered bonds, CMBS, drivers Asia, there Chinese were of quarter of our structured -- not Europe. then both And There there. We you was generally

Jeff Goldstein

a right. All lot. Thanks

Operator

you. Thank

question comes from Partners. Huber Research with next Our Craig Huber

Your open. line is

Craig Huber

what question, Thank your on in about year. flat your particular, talked talk global the -- bank for expectation just thoughts you've this is can you And outlook hi. rate think for debt like Yes, My you. us what you Then loans, I issuance, about follow-up. year? a rising on your slightly I seems can update have down a Thank Doug, you. before environment? first

Douglas Peterson

of Yes. things A couple there.

the issuance, I number about issued total to down that think, be Even there's though shows the forecast on X.X%. the X% will overall for just issuance an our that the global we itself update expectation year. our on

more we that expectations the place and structured our the one up. issuance weakest a market, especially There's that see even in of and issuance few you this about what drivers. environment globally, that are finally, to this X% in rate. putting for reasons, instruments. public there's the rate finance year going where from down Structured various issuance not investor for or There different it looks loan lot floating still think are a XX%. taking in first that. demand volatility finance still components. quarter Asia, deal are we are year their saw then upside, for full be public down we corporate, some and the to reasons. States is deals United it where investments the it be a was Overall, a for we and various to quarter. we exclude loan as balance down first there's basically are consider And would finance though When that And we're purposes. side. like floating the the And weak. balance in lot the is sheet that's strongest LBOs demand side of just is itself, is for year also the of rate could that think you debt where on activity the drive organizations demand If Financial see Overall, things the still Europe so. still U.S. over see the this for X%. CLOs, in year, international demand area it the still going Its for that entire the in It's don't comes It's floating longer -- term like rate to for sheet, lot TLAC, the loan services

business because be a we only there's percentage is rated So, the it higher is the that it has business. larger in just expect larger it much become loan of used but than become bigger Not a to because past. also it's becoming activity, more

have So, do specific we it, in will don't for continue but the forward. this strong be environment. continue an of kind projection loan to we a I market that believe think that will it

Craig Huber

the optimistic growth touched And your on? touch on you a Can by other then then on what that question, topline Platts just bit exactly bit, why And further overall being X.X% the happened slow you little a on hurt this but year trading little roughly growth, Platts, operation. may in my improve revenue quarter? are in you the about as goes the

Ewout Steenbergen

business, revenues. at indicator look category. we another components, indicator is the in the an we're subscription growth, business, value, future is both which if annual we looking revenue that contract Craig, at growth the reporting core of And see healthy price different particular

very with trading much improvement what That So, And we indices stronger see volume commodity we around It see quarter-by-quarter. further that are are can positive Global you a future, products ICE. And bit and volume growth, have markets the healthy development. could down. more kind certain is volume services, some hopefully, in depends as and there. together, with of move the highlighting, quarter-to-quarter. seeing of those on for built lower mostly products we

basis, basis. business, know, quarter but on as can But full not bit. on that a overall, a around you So our managing a are year move we

company able we the full therefore, year. for that to the to So, be the overall Platts margin are expansion of contribute confident should

Craig Huber

Thank you.

Ewout Steenbergen

Thanks Craig.

Operator

you, Thank sir.

Silber Jeff from comes question Capital with BMO Markets. next Our

open. Your line is

Jeff Silber

Ewout, in manage few margins increase so mentioned know to business on Platts. for in much. you've Again, a Actually follow-up the started off you those margins will I what the Intelligence rest year-over-year the Thanks that year all you gives expect in the hole the segments. quarterly a side. on segments? but basis, Market margin And confidence you for you of expand a just the times and in don't that a

Ewout Steenbergen

point margins I $XX points improved done by for have if than all, more during basis the the contribution the Jeff, would would company first not to overall you million of would out to that First have like XXX that quarter. foundation, the

So, we perspective. particularly rest the many don't some on and more reverse you that There the -- other just year, ASC in expenses was segments were seen the has Market But are fringe, in the Intelligence during that put specific should mentioning, expenses the two to that focusing of timing-related. of occur exchange, at certain That categories. the same year. level XXX, during foreign impact remainder that from and to expect

that bit into seen to to X% the a lot going organic that of see overall, therefore, different that With improvement be expense topline moving should you Platts, the respect in of therefore and perspective. should Platts, for me And let margin we a So, parts Intelligence. growth able with margin put Market improvement of the level revenue be we there. But expect forward. have Platts

Platts with if from was spend, respect therefore, XXXX, we first the XXXX to more full down of backend-loaded. discretionary year saw is this And were in XX% expenses during initiatives, expenses. And XXXX. trend XXXX the in going So, back a And expenses the fourth to variable look quarter down during margin XX% we quarter margins to the during for of XX%.

full fourth XX% So, Platts, we XXXX. started quarter above the the year and above year margins with is the which for

We even more be expect year. expenses this to

therefore, full the we also, XXXX. margin expansion company overall are the year. is the therefore, So, And to be more during course should of March for during confident stable contribute to that also Platts

Jeff Silber

you're the the very terms basis. be That's to numbers But continue follow-up, want of to the appreciate I'm I in helpful. Indices to Really shift right. color. Obviously, All the And gears impressive. you're you Thanks there ETFs are do are just in that think if much. competitors? curious, than And gaining so, any market? so or your there specific stronger that share any markets

Douglas Peterson

But or a there's a cap that. different very gaining of total at at of this U.S. large as market answer growing between in overall component we being what management Doug. position Yes, with a the the that of asset within types large market of and if difficult the how that's as local, that's market. of component of to with the a between That's question What the size share is well is the passive of being have allocations you look look is globally what's But asset strategies. of large class the regional asset indexed can lot movement XXX in terms et we share. U.S., assets, different global, we market, Obviously, index know cetera. S&P management

that there in there passive international see a market funds that from have from benefit and we've very strategies but to specific into do that itself, share to we position we well big done if don't So, and we be continues move a passive originally very active movement Even we index start that. they and and have. don't

a usually As some at point, of strategies, around from they move see passive from we, that. benefit different types

Jeff Silber

Thank right. so All much. you

Douglas Peterson

Thank you.

Operator

Mr. you, Thank Silber.

from Foresi next Joseph Fitzgerald. is question Our with Cantor

You may your question. ask

Joseph Foresi

look Hi. of like? some to and the contributions the about with I indexing. are fixed from particularly starting and newer the I'm to wondering wanted income areas stick impact what

Douglas Peterson

us, for still, is a pretty income Fixed small area.

information We area. $XX in But get we million can you year Investor we more have in a when that Day. give it's about a some to it's revenues nascent there something total. But on total that -- it's below

a But for our still is revenues. a much fact, indices bigger. a total In very of bigger all one different It's a that it. component we the get portfolios. play small income investment market, as is of believe pretty area. new the going globally, in fixed component lot We small position a to of want today, it's It's to

Joseph Foresi

Okay. just And with Kensho on then maybe update and the an Panjiva. progress

Ewout Steenbergen

and days. data weeks expertise that $XX There's scientists, loss, the know, in lot people acquisition Panjiva this With Yes, closed early that respect the coming as is million on half revenues a the with it ago. will organization. unallocated. about as of a new is, about enthusiasm technology, course, about We transaction because Kensho. is as are which to datasets of the you Panjiva our the bringing, comment of are well in It today that companies the of they small we the to absorb Kensho, that two and both quality have let very me corporate bringing,

have updated So, showing But you many the we basis. keep won't those identified. that therefore, see work projects will benefits And of we on on on will along projects adjusted up the that an way. economic we you

panel insight there and Nadler Day, be where have will our will other with Daniel section We a giving Kensho. couple people particular of more a in a you during Investor

So, more concrete during a couple we'll of definitely you Investor examples. Day come back to with

Joseph Foresi

Thank you.

Operator

sir. you, Thank

Jaffray. with your is Piper may question from Appert question. Sir, next ask Our Peter you

Peter Appert

Good you. morning. Thank

performance? in in tougher is perspective quite regulatory also terms you terms Any environment. mix So, context color think or And a driving Ratings term any margin then in of impressive where the can go longer targets of share on initiative of the Ratings. performance I'm that's in cost can this interested in margins you

Douglas Peterson

some we comes it weak provide margins, to But When of we mix, Doug. that very is can Investor in we'll say to when before Day. you've a that longer-term this have terms of me get more Peter, heard quarter we over and saw cetera. issuance be a overall The institutions, financial lot finance, that a that And of in there's volatility going et time, we weak in global know was down issuance. to very corporate, X%. public quarter

lot structured take couple business it more down that. a out of there's a even you it's a was If finance, than about. we still But to that aspects have think

First actual kind is of issuance of itself. mix the

component, structured margin also fees, to the lower-rated business high-yield we high more mix, structured bringing balance our higher typically from see the we've same component. a have transactions, revenue know finance frequent you as business. issuer more with fees been issuance transaction, or transactions time, able non-transaction-type finance into normally, But from as So, at

we've also But And taking there are more that now, markets. managing of we're but couple investing revenue, the one. a mix ahead important see And restructuring indices, to trying also our said, There over we could been the restructuring be But the small maintain on Green are relevance in we see had very at get very as that quarter time, as we've different reserves our given tightly. very I've are able Bond importantly, in tough innovations very all cetera. well be manage of then we're the in to think very somewhere And over as but to as et think the of a business going our you've because might ESG time, Evaluations, Those us same the but for actions, build issuance. the markets, starting volatility we we some we just we're so and seen done topline. type expenses to business quarters. the they're we're to of of in indices, quarters, So, mix tough terms through sustainability innovation. weak a time, always

Ewout Steenbergen

let of you thing lot one about think the I here, heads are So, Peter, scratching folks your add non-transaction. me because a

there's normally But So, a number has of a every in components important thing That in doesn't one was that up. of the quarter. single them alluded Doug happen particular to. non-transaction is

annual surveillance up. So, fees, That's not abnormal.

fees frequent up. are Our issuer

up. royalty, in, up. commercial lot Our is of new commercial that's entities Intersegment M&A we up. up. RES, activity, a business program that's of get the surge a new we Cap that's fees, that's from paper, entities, paper have so IQ, The coming

So, but did every is of in this it's that component up a quarter. quarter, common non-transaction not they single given

Peter Appert

the can for What's you settlements? Thank little still was that. so how we that? it. number anticipate the And legal that Got more a for $XX bit about I million large. on might a much guess surprised And was talk little Ewout, you driving front? I

Ewout Steenbergen

quarter perspective. Yes, the an there was from no particular legal settlement charge accounting during

You payout last this might established of have looked we at a cash it from have so a a perspective, year. already was reserve

cases crisis very much in Obviously, much to We financial pipeline further the at time. very cases that respect for end we're are financial the at that, pipeline the but very with of say this cannot of on would I few we comment to at crisis. cases. point respect end still the are on a going the There's with

Peter Appert

Got it. Thank you.

Operator

Appert. Mr. you, Thank

is is question Autonomous. with line open. Sir, Hung next from Vincent your Our

Vincent Hung

Hi. Yes.

give it the Is about bit data cost. you exchange it a you that talked Just data? here higher relates Intelligence color to? just on Market Is what data? expenses, pricing the us Can of

Ewout Steenbergen

That put growth, and platform, we Vincent, content, datasets volume growth, to expand that and customer datasets. trying products to would that new overall on I new directly at look therefore, growth. with respect business growth, new the our just We're as data is -- with new is platform. adding revenue correlated

is this seen the correlated again this we with me, strong have the growth we So, variable which quarter. organic business, growth in in is for emphasizing X% Intelligence the organic directly cost, a see Market

Vincent Hung

far? any can you received from proposition issuers talk that terms so Got of Ratings the you to customers? use it. value how And to And about expand you've in XXX feedback plan to

Ewout Steenbergen

between a My used XXX, a we which issuers, platform was Ratings is to a have way could and more much that which Credit with or a We're We're is us the add information tool allows that, ability new issuers we relevant a have us. more data, XXX a Ratings for to that connectivity of dynamic issuers makes analysts. information to the with which have to it Yes. so It it. connectivity more on even dialogue and replacement to relationship also Portal, seeing and to treasurers has electronically called the the CFOs. have new replacing

and it the So, out. it to continuing and feedback to is we build We're see to excellent. move improve it

so with and with Investor Ratings that about started talk it's more And we pleased will really also our something where XXX we Day. in I'm

Vincent Hung

Thanks.

Ewout Steenbergen

Thanks Vincent.

Operator

you, Mr. Hung. Thank

Our next & Blair question William is Company. from Tim McHugh with

your line Your open for is sir. question

Trevor Romeo

Tim on morning. Hi, Trevor today. for questions. This good is for our Thanks Romeo actually taking

there going there was on in the growth you trading forward? the continuing and revenues up Just volatility? up just for But segment. how that obviously Are is factors driven kind beyond that further wanted with volatility to touch sustainable do see growth? Index the drive by would of despite Or the other down That volatility quarter.

Ewout Steenbergen

tremendously from much expect -- That actually in this you We transaction to by quarter it. directly level of benefited some pretty volatility see volatility that transactions, revenue from is so but revenue is transactions, volumes. should is and driven that linked to the

Trevor Romeo

segment, of Index the a a were pretty decrease strong the in fees on even also AUM. with then And asset-linked Thanks. little Okay. bit sequentially

an you're much maybe for pricing seeing on lately. us as update if fee not maybe that you're you Thanks. could give Just business, the getting if there wondering compression

Ewout Steenbergen

the on with to revenue asset-linked comments respect two Trevor, fee fees.

First to quarter first comparing, of quarter all, XXXX course, we're of first XXXX.

increase average of the in that the based on is the levels. AUM, secondly, asset year-over-year, generate of So, a daily so average there's it's the products. on balances those asset we And significant fees

average is is much So, you if at over but the average end number are shouldn't end generated look levels, AUM. respect then the at asset markets with quarter, the higher come development it down because the there a quarter a to because of healthy fees

But perspective. very to basis into points it the marginal declining low. cost the of those over to fees flip do, scales side is is have the course, and are products. that respect with that put exchange-traded We So the

high. incremental additional So, therefore, bottom-line the is very through the the flow volume The benefits is very to of high.

company for So, when of the structures it's have growth trade-off up. in place, basis are fee versus volumes favorable on going terms the the a in we volume very

Trevor Romeo

Okay, great. very Thank much. you

Ewout Steenbergen

Thanks Trevor.

Operator

sir. you, Thank

Sachs. is question next Fitzgerald from Goldman Our with Conor

Your line open your is for sir. question

Conor Fitzgerald

of Most morning. asked. Good been my questions have

talking just increased we've impacting wondering any talent me. one Just thinking a heard quarter, tighter for your how their technology you're that business. expense? if seeing seems teams about market this be should that a It particularly on But for and of couple about we the competition labor compensation side management of

your wondering in about Just as seeing that business well? you should you're we as well if that think how and impacting

Douglas Peterson

high market. one is space we quality and is and the company. we This to the and one will competitive that that technology that already of attract the of is our very a discussed people high definitely of most is that about people Directors important have in our with the operating our Board committee, quality of topics company the we Clearly,

fund talent. and what we've expected people, our a that included obviously, for call But seeing, the ensure the a any that the all and to train are leadership in enable guidance great develop that's you company, estimates to want you. expenses of the We might that, the given have in to of war we

Conor Fitzgerald

much. very Thanks

Douglas Peterson

Conor. Thanks

Operator

Thank you, Mr. Fitzgerald.

Raymond from O'Shaughnessy our is line final Patrick Sir We take with your open. question will now James.

Patrick O'Shaughnessy

guys. morning good Hey

products XQ up, quick us on XXXX. look volumes, GTS versus I at Because revenues. So, look you were GTS that ICE would about revenues? as terms overall energy in point at driving they there to of we follow-up specific X% ICE Platts think, Are those

a very you guessing guys? more subset relevant I'm there's that's for So, specific

Ewout Steenbergen

at fair our if you then say GTS, trading look decline. are ICE And Patrick, a you volumes that Platts, you to is revenue if because the for see overall look at up.

but of, Our give certain with is of the few had Dubai, contracts oil, the us a licensing mention ICE. not together fuel significant exposure agreements to to products, those that raises So course, that question we possible? Singapore of To some how that others. built all

platform of So, much activity can volumes that And the impact. the again, ICE quarter-to-quarter. the and trading that move around business very will of type it's mix on of the

Patrick O'Shaughnessy

Okay, you very great. Thank much.

Douglas Peterson

for Well, very launched the the I call. people you, with very the Thank queue that strong to of that quarter see thank want very, to just come we've everyone have again Patrick. the end I pleased results. first in to we're XXXX

which our clear. comes very hope As you've to I our customer heard, to experience, through we're improving continue going focus topline on growth, our margins, commitment to

our on on comments, impact the your Day company. about month also you ongoing for year You'll in of questions, from another you on on Thank forward corporate-wide interest. hear much. morning you emphasis technology, seeing And we thank us this so. Investor or all throughout And and our specifically new very to our your Kensho's look about

Operator

today A PDF about morning's is and of this you of A this wish month version replay website for the S&P will and telephone. of day. today be Global, on maintained in The for slides available session, months S&P call. call, thank now by presenters' be concludes On participating will investor.spglobal.com. downloading including available good a That Global's we for behalf replay the from Q&A for two one XX from you from hours.

S&P Global (SPGI) 26 Apr 182018 Q1 Earnings call transcript