SPGI - Earnings call transcript Q1 2019

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Operator

Good morning, and welcome to S&P Global’s First Quarter 2019 Earnings Conference Call. I would 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 questions-and-answers after the presentation, and instructions will follow at that time. To access the webcast and slides, go to investor.spglobal.com. now introduce would I Instructions] like Mr. to [Operator of for S&P Merritt, Senior Relations President Vice Chip Global. Investor you Sir may begin

Chip Merritt

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

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

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

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

Doug Peterson

of have heels recovery XXXX to the The long our a on quarter and responded In our central policy a shift forecast the But slower, neutral. most to healthy very major the debt markets. equity main the Thank you, and board notable been shaky began Chip. by tightening markets The baseline linger. call. trade footing development been XXXX bias but Markets of depths intact. past in although in since to way earnings first first has on volatility morning, and gradual has uncertainty related stand meantime, come welcome quarter down have the and is Good the the coordinated the still of quarter. from remains in December. monetary growth across the both risks change politics positively, banks for

importantly issuance debt in first and Platts as more quarter ETF subscription the and AUM to January Our recover. revenue in markets, Intelligence took businesses, and for Market growth weeks it led several

even few in revenue segments show XX figure. in point of review larger Market achieved quarter the as Let improvement X% our in led Intelligence increase basis a will margin, four organic We quarter. an moments growth. and adjusted operating with me the from a some highlights profit trailing all I

free the in unchanged a Based adjusted with period segments. grow reaffirming diluted quarter. lower adjusted few guidance. ideal, in Revenue able two million approximately primarily outstanding, In We delivered items were lower EPS. reducing a Ratings seasonally launched million shares. offset flow tax in EPS we the average markets diluted we and growth of rate finally, prior the review landmark of offerings We're X% is record excluding the period is $XXX low cash on certain be revenue by decline flow the to long ESG We other shares a I'll to still in that when generated diluted three weren't we And adjusted cash growth. as in track minutes. share six XXXX continued largely a a decline count, versus pleased

adjusted Our margins X%, measure adjusted increased on which adjusted But XX points. basis, four-quarter a to please basis XX.X%. points increased basis XXX operating we increased track trailing and and profit operating margin profit recall,

addition, projects which we underway. an we quarter, take continued diluted important business reduce In shares highlight to in contributed X% drivers key increase to our to outstanding, Each EPS. and the adjusted to opportunity

transcripts, such and SNL have offer alternative within products we of This and of solutions data data as the have data Intelligence. Market XX% which had on deliver data to XX% about Compustat two GICS, number estimates. has ingested about than machine-readable express, however, including feeds earnings in last feeds. of up think the services annually Capital cross-reference track most packages business let's for rating quarter, increase data are Historically, feed along data. that our data is other more is asset-level business Intelligence grown the revenue years Market as and year, have ratings CUSIP past shipping primarily think Data Market by through data and million with RatingsXpress offerings about included the In been the and of desktop. available made These reselling our customers $XXX Panjiva When with they management start or This investors year. a the data Intelligence, feeds information this IQ feeds.

of our key it. need future. unique to expect near to We Trucost scores sets ESG which and form deliver sentiment they The that is data, data data in the in transcript unique the other customers

to Ratings. turning Now

X%, During include We're at Last after ratings issuance loan bond covered global the forecast. decreased drops The declined XX% bond signs balances track we X%, end and to is global finance in quarter most the where we forecast X% decreased public an balances volume, investment of a decline companies XXXX. structured decreased due in CLOs, of and XX% the very pleased In these If increased bond finance issuance little performance issuance high increased this grade total chart yield issuance continued to XXXX. quarter, grade cash issuance by introduced declined largely mixed anemic and as XX%, issuance high to yield showing global those of in category In issuance XX%. companies and to global overseas have presence. Europe, debt finance bank attempt partially X% with in strength geographies with various recovery ABS the structured In decreased improved the that of XX% latest all Asia, bonds, U.S., bond that with cash these companies the among offset we is the XXXX previous CMBS declined from unchanged declined increased and issuance X% XX%. asset classes. first, and investment gains RMBS. as also XX%, cash

these finance, six increasingly than important has X%. source for This on are as become volume. leverage public issuance excludes and Leverage minimal new less chart and has international an which decrease impact repricing the results, loan revenue of loans is depicts loan our to past activity financial volume rated. Excluding amend-to-extend expected years

that well activity primarily is down loan have to XX%, quarter fund as the for weeks, loan leveraged funds in M&A chart XX outflows. due First shows U.S. as experienced This less significant past dramatic reduction volume a leverage assets.

XXXX, since in loans fact, billion. net variable over is Investing in $XXX appealing have rates rising In have had because totaling $XX funds outflows rates. peaking at more when October loans billion were loan leverage

attractive. have increase your subsided, when included expectations doing that activity Now loan Remember data. more for issuance debt relatively in not looks leverage is bond analysis, high-yield rate

decreased versus first in bank quarter million first $XX XXXX. $XX of so in to And ratings our revenue million the the quarter loan

six of capabilities. the Future, including We Day, goals Investor to this foundational the Powering set use we the resources. framework framework our and allocate During introduced Markets

call, global particular in I with our shared underway projects categories each on these quarter our China. opportunity of During Ratings emphasis with fourth in

some Let innovation a investors, half-day under official has with our start March customer other to approval there took launch and issuing banks enter receiving We participants then After new income all opportunities companies, of of that new major in the our China's insights opportunity on and commitment to orientation. divisions. January, place and hosted an participants transparency also focus me and bond is market seminar fixed highlight financial outlining Beijing then Ratings ESG XXX from to in Chinese vision domestic in team bring the China's a markets, innovation. financial areas as as This markets. customer beyond showcase across and more in strong and was business goes our to our orientation a our well XX.

for Our different products years S&P have that product created as are to tool indices. ESG revenue as the efforts To In used ESG across ESG the as which now needs We're across Global scores can methodology be the have to the can on a in and XX span enhanced in the and million. upcoming designed ESG different as The the ESG broad of anticipate clients the Indices. Jones ensures approach every for ESG of known S&P needs. companies This Index well the evaluate of the our data range launched research, Dow scores heritage specific to Sustainability market ESG ESG to various market. company ESG in XXXX, scale. Dow a collected Indices, ago, to will consistency segment. centralize we used a offerings. recognize are DJI business and indices used We introducing at indexing stand-alone end, products investment that be Jones purposes. S&P trying an The arguably available tailor in and ESG inputs best are expanding $XX we and as those factory our data inputs XXX S&P We're any we scoring new the the country-specific regional indices.

only fixed S&P with Index the but and ESG new number XX% first ESG mind. indices also ESG the XXX's their goals, S&P The both aligned Index The Index. investment index market income U.S. on individual that not capitalization several constructed launch investors. GICS the An require and on in the these level increasing offers line XXX in European ETFs their the firm month is to XXX to to at product their The The a targets serve profile cap with Evaluations of is S&P of values. is S&P that ESG investors large that ESG XXX based exchanges. of and traditional UBS that market. institutional Ratings launched with indices for S&P this diversification first are of of industry close license last code. the launched is Global issuers

entity's Evaluation natural relative and ESG stakeholder light future analysis successfully Our of of cross-sector environment social a and quality the an governance. ability in operate value the to of its in optimize is its long-term and

the have Delivering updating innovative new ESG our coupled leveraging unique insights the with at an judgment S&P to add company analysts is to client ratings addition products data our and In Global. products management with factory, engagement of product. emphasis existing analyst important that the this

indices launched risk-adjusted the consistent companies recently of excluding of track is performance Indices. record Select positive new by This of a business indices long-term caps designed improve Global to small without earnings. series Our SmallCap

International marine sulphur that Maritime In marine addition, low January Platts of fuel Organization's XXXX. to X.X% in on in fuel sulphur launched begins response cap assessments

price iconic the ICE are fuels. Our supervised continue marine Dow Black be barrels basket to marker Benchmark falling, over the assessments Dated to proposal use last, fuel of Dow recently Brent Dated I'd and and cost. the Average traded will ESMA assessments marine Platts Platts' ample X.X%, of North and on the S&P liquidity entity success volume featured benchmarks benchmarks And the in March, the it in These EU announced became them. S&P Based to contracts charts and new finally, in landed EU register on of first February Sea And Indices pricing of and based share six prices XX the first like to Rotterdam for Jones of supply depicted move be Sea barge a which wheat. Jones included fuel future. equaling enabling we the marine the options lots earnings JKM to calls. XXth, that two residual in a Industrial assessments, XXX,XXX foreseeable the change early gradually X.X% Regulation the for launched CIF, FOB day. grades including global Brent under ensure cargo In endorsed benchmark. to The the these XXX XXXX to this are in that futures futures With IMO C-I-F on on proposal basis, contracts new new daily compliant reflecting means previous which

assessments As And marketplace. who'll you both charts, to can Ewout? the call capital are to I'd our additional turn our now, see plans performance. into gaining insights like CFO, great price in in the these Steenbergen, adoption and Ewout financial over provide

Ewout Steenbergen

Thank you, Doug, to the good call. on morning of you all and

offset did considering Let first take Pragmatix, stock the This first primarily rate the me corporate a adjusted was start lower to Kensho option added primarily Panjiva, the occurred the full recur. a XX%, points cover cost adjusted quarter XX of Doug This to structure. by have of decreased to guidance XX.X%, year than unallocated level and few Total $XX to due XX.X% highlights, improved larger-than-normal contribution S&P partially tax notable with RateWatch our effective line by million a to will other Foundation Global exercises of prior covered is was items. Kensho. year of acquisitions the period and XX.X%. because expenses our results. basis our ago, that financial in not moment that than of I This addition the less Adjusted quarter. the a The X%. during

shares quarter. compensation a outstanding. actions shareholders decline on associated stock-based diluted actively in past exercised with first our of the average to were resulted been during a the resulted benefit options capital have weighted This in shares year. We Stock returning in over These XXX,XXX EPS X% tax $X.XX.

the continues tax to As options benefit the we stock-based decline, stock expect number of decline employee to as compensation well.

range of adjusted by options in $X.XX negligible negative Intelligence operating estimate Changes quarter, impact to the However, on $X.XX the of XXXX impact EPS our revenue on for had volume we're a a Market a in exercised Ratings and company. foreign the because of profit increasing first of and rates the $X.XX. in the to businesses impact exchange

was charge plan. the associated along reduced non-GAAP by a were defined these adjustments both pound. frozen in also in in on million revenue the framework this $XX was to insurance to primarily minimal pension euro Indian the a most May weakness impacted pretax show of the Our result resulting Investor This value. of we U.S. of retention-related portion depicts our This areas expenses impact British deal-related is with Weakness weakening currencies XXXX. quarter: benefit a we three our $XXX a and adjusted the impact from outlined negatively amortization. expenses; ForEx in in There of pension rupee had Day our that EPS. non-cash shareholder transferring can funding at obligation a the an with company; that shared where Kensho million $X and in It we million slide we

to and continue by new our to technology, new entering improving adding sets We introducing products, new investments. to fuel The require need data first invest momentum geographies. two revenue

year. made must XX% financial shares great the tax progress returning while least to capacity. want enforce to and we continue finally, outstanding delivering fund We new gains. to We're at debt opportunities cash drive shareholders enhancement to return rate. additional flexible free optimizing organic interest And flow we optimizing have to Driving leverage, annual each to shareholders of capital maintaining reducing costs, committed productivity and EBITDA

strongest Market growth. our quarter businesses, and This delivered Platts subscription Intelligence the revenue

basis. trailing we four many we times, managed a margins As said operating on adjusted have quarter

all there while a quarter versus margin the gains four basis. were delivered four on declines figures XXXX businesses quarter quarterly first trailing So in of

versus cash XXXX, equivalents of to declined due to Now end the repurchases of sheet. balance the million $XXX principally first quarter. Cash the share during and turning

flow to adjusted adjusted in compensation free cash times Our items incentive X% quarter quarter. the year cash within growth low seasonally increased remaining This times. leverage a certain to our to first million. EBITDA to X.XX targeted with X.X declined of flow Free is payments range excluding each X.XX $XXX

ASR. During open $XXX returned and dividends, million market an a shareholders through the purchases of we to quarter combination

X.X -- we the million ASR. received the addition, open purchases, true-up X.X from million ASR quarter, X.X old million shares initial shares from In from X.X of during shares shares current the market the shares and million

changes strong effective revenue the Market starting user Now basis results X. with need on to Market XX%. let's out increasing turn XX%, segment January Intelligence Intelligence. that became on with desktop quarter an point organic delivered active a X% of two growth to and both I

are in in did item we including as now Kensho First, Market it than corporate we rather XXXX. revenue Intelligence as a reporting

Indices in Trucost from to Intelligence. been Second, transferred Market periods both has

Market at despite increased underway in points here. X%, the efforts be business. XX% Adjusted segment we expenses increased operating profit increased to is XX.X%, adjusted business margin ESG basis to segment XXX investments included suited Intelligence, adjusted and the the With operating better believe increased profit the

More importantly, delivered mid-XXXX. Services Poor's we acquisitions. data we excluding on expansion to sale Desktop again close feeds business Asset XX% adjusted the category as of Solutions. business to & benefiting the in a Credit the of Sachs XX% revenue margin of continue highlighted Risk of Solutions XXX with in level of Solutions XX.X%. of RatingsXpress The feeds Management Management. grew March, the profit greatest basis, from grew Investment Terms operating the the data announced growth, has the the quarter is Doug that Credit largest business trailing Also and points an been once earlier. portion Data Risk providing renamed expand realized X% Risk growth four to were expected exceptional transaction Services deal basis increase segment to Goldman disclosed. not Advisory Standard

in basis Ratings X%. X% profit operating XXX volume impact operating adjusted revenue primarily decline segment foreign decline adjusted segment basis, decreased, trailing due profit points in million bank This by loan margin. decline resulting changes adjusted only partially a points basis was XX.X%. XX% to in profit mitigated On margin a from reduction and declined a operating Non-transaction declined and exchange. adjusted segment activity in expenses, $X XXX While an bond increased a XX%, revenue issuance four-quarter to in

growth. activity majority lower In revenue the to lower to This a to a addition, extent these Intelligence, lesser revenue subscription-like. royalties decline. bonds bank fewer due lower the source activity Rating loan Inter-segment been rating revenue contributed ratings. because and Non-transaction has CRISIL the offset is declines. is from of ratings and steady Transaction Evaluation Market decreased new entity of partially slightly Services

are there certain Evaluation due an components Rating Services, and decline loan the corporates, revenue in Ratings contributor activity changes X% markets. flow the revenue exchange at primarily largest However, some in Ratings foreign M&A namely; depicts This impact. volatility with ebb less always rates end in can by its activity. rating decline and to was slide to The have bank

XX%, declined In and and financial Intelligence, from decreased X%. addition, revenue. finance CRISIL's in in category X%, This an includes decline revenue increased X%, dollar-denominated decreased government by Market services increase CRISIL structured royalties other offset inter-segment

Turning operating growth, points. of than was the segment during expense of Dow primarily to Revenue revenue XX prior exchange-traded lower result operating X% period. points mix quarter. growth, profit with margin profit was basis decline the to mixed X% basis, profit increased X% operating a proportion margin XX.X%. XXX segment adjusted the segment growth, trailing adjusted basis adjusted Indices, adjusted This of of four-quarter delivered in from decline On the margin XX.X% S&P a derivative a a revenue Jones revenue and segment an

increased property Exchange-traded incredibly customer an X%, timing funds purchase and declined certain an growth. the in of from first year XX% year of organic and reporting to from we rights, well revenue Data quarter mutual due that intellectual a AUM as strong primarily quarter catch-up real-time in in second reporting, Asset-linked as derivative to fees improvement the increased due a last discussed subscriptions of growth. ago. XX% custom

AUM inflows between distinction year-over-year. increased the the quarter I average net ETF ending X% make billion first quarter AUM. in in quarter the business, clear and want and Indices our a For average first to ETF $X AUM were

are ending figures figures, best AUM. are Our on waterfall right. and gains disclose as using shown average because contracts end market We on the quarter the quarter in flows and depicted based chart losses

and $X.XXX linked AUM first the year billion average were the funds $XX and Dow equity versus inflows end fixed of trillion. majority the equity increased from market global These quarter of the recently $XX Since a Flows While ETF are only the to income ago, into into Sector were there billion trillion first of quarter into S&P and Indices exchange-traded the Effects quarter March published products. increased report A quarter this with $X going Jones in billion. modestly, U.S. year, end charts in XX% appreciation. titled Pricing S&P such stock has are least late XXX: and AUM the Sectors indices XXXX, in Industry funds Returns. exchange-traded $X.XXX been based XX, sector-based there The there was existed the Active our of in Tradable At Role not Products XXXX. on ending inflows at funds investment billion of Risk tools first was XXXXs. as indices. AUM $XX have new. in sector since

in grown years. that past recently products have certain interest has interest, show these than assets, However, charts open associated volume, the sector the more doubled These five trading in index-based materially. with products

sectoral Petroleum, our sector VIX XXXX. Key easier decreased make index at as options and increased futures and equity business activity to a to increased it adjusted of margin The a XX% Trading decrease operating XX%. X% express delivered options to exceptional, XX select all XXXX, sectors points. expenses basis now four last subscriptions XXX increase future growth. commodity slide X% growth CBOE stepped-up CME in to basis options to segment we margin largest points indicators Platts in Last investment of growth. shared XX% profit manage X%. X%, a level revenue the Platts These a our a right decreased Global decreased category, XX result turning of volume a X% increasing decreased use revenue on as complex quarter core activity most activity profit volatile of operating segment, And organic increase of S&P In groups the to at XXX views quarter, was the the you, segment on reported for four-quarter and quarter products exchange-traded the with the in of depicting and indices. Services. launched addition, a from XX.X%. in increased trailing fuel derivatives for XX.X%, February to Adjusted first adjusted leading exposures. investors

However, understand for that model try be results, the it to in we thought as to you you of our investment level will segments. important each of the

can is see the chart the the on you As of half investing from Market left, total. Intelligence

build In year addition this as expected spending is the to progresses.

I pretax lastly, the non-cash GAAP Please risk in plan like that guidance. I are defined guidance. keep discuss frozen reflects partial of rates. we guidance, with our benefit transfer to decreasing noted EPS million our a associated charge spot guidance U.S. current earlier, market GAAP pension XXXX mind diluted would slide $XXX Because the XXXX of Now, that our our ForEx This depicts guidance.

not any item our to However, part adjusted because does guidance. adjusted necessitate of our it is changes not this results,

In to outlook our our strength initiatives have fact, underway. because we we changes are are about adjusted guidance competitive our we for current markets, and not the optimistic making

questions. continue year the progresses. as get comparisons quarterly let In me easier back the turn for call expect growth year-over-year that, your to over addition Chip as we With to

Chip Merritt

Thank you.

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

Operator

This you. Stanley. Kaplan question Morgan Thank Ms. comes from Toni from

Toni Michele

morning. you. Thank Good

Doug Peterson

morning. Good

Toni Michele

weakness margins we little but the the a think to growth Understandably the lower issuance expecting. margins. were were just Ratings' led lighter I on quarter bit is than question in Ratings what first in My

I at additional color leverage leverage Thank some just you. mid-single-digit down to I level sort in segment? of like would what helpful. So just, do get wanted a there? in getting growth you Do quarter the margins what on the to operating start ask, just you that Ratings And drove guess, be need the

Ewout Steenbergen

Good morning, Ewout. This is Toni.

that margin good results in of you down within see time general expenses dollar in productivity If first are coming we overall million. overall Ratings are the same satisfied our the think at terms, we we if respect Ratings to see enterprise expense discipline margins, more and the in year, better to by to we the the in year margins Clearly, look outlook that remainder business. are we Ratings, look of the expectation really guide or is of the is our you of development We also benefits $X ago. if at compared the margin by the the discipline that segment, the And that, seeing. don't quarter I But showing we outlooks with say reason look should And with seeing plans. respective in the is to at totality. do provide look that terms across we X% expense want a although specifics quarters

So, to compared still expand expect to overall, year-over-year XXXX Ratings we margins XXXX.

Toni Michele

question Great. ask about I And my Market second to Intelligence. wanted

is market. growth probably Kensho a user your and than good with the the growth X% You so small there. really change Kensho included I on that much that with mentioned XX%, strong pretty being guess in looked was number, imagine organic pretty the up basis like sequentially? I a like-for-like faster of last quarter,

Intelligence attribute growth And Thank rate so was the on just colors business really in I so really wanted you And to Market there? any understand international too, the too. just Market strong Intelligence strong what you. growth

Ewout Steenbergen

some from part million revenues the a well line. that think Think improvement as about on only inorganic $X that in the driven Kensho a of Toni revenue revenues in about was by you segment it Market acquisition $X as was by at quarter, look of Market of if in RateWatch Intelligence during Intelligence. contribution was but couple the million. this acquisitions total That Panjiva,

a overall it's not So change. large

As we second you the acquired recall, in quarter will Kensho of XXXX.

anymore. the So show up It's usual. inorganic next category quarter normal becoming basically this part not going in as business to of is

Toni Kaplan

Thank right. you. All

Operator

UBS. question next is The Kramm you. Thank from Alex of

Alex Kramm

clearly there hairs impact morning, when about contribution. very you're you on you left with my you hey despite I EPS. bit, than At line but think just it's X.X% $X.XX but Yeah, bottom good stock-based have the the and the of same basically be saying taxes guidance not question the that I you But Again here I less higher I a positive little time unchanged. now outlook splitting think your a wondering talked like you're sound anything help. everyone. think may changing EPS

a puts the discussion leave maybe there takes So unchanged. just it little to and on

Ewout Steenbergen

is Good Ewout. This morning, Alex.

you XX.X% range. effective have which improved guidance full If if the range impact tax more are now are compensation, still you expecting within the at looking of to provided look year, respect lower the that from the is end to that XX.X% rate at for now we the the we at with we're stock-based

tax say rate we overall have it range our in months out want incrementally where we our of volatile would ago months very uncertain I go. the came recall confident ago you a will therefore, is was do markets to Because not and the compared to quarter have very adjusted So, three what around we guidance in become three general. more But guidance.

compared at incrementally the time, around ago, health you you of outlook respect the businesses the in point to the at future where time, in subscription for our of this the which months compared the this we look annualized starting for at year revenue ETF look of If are for a for year, to the overall starting point we guidance to debt quarters are ,if AUM the three provided markets our the point with have outlook the subscription this value, more indicator in confident leading and markets few second quarter point the a now in businesses next ago. is contract year

Alex Kramm

on very about on good fees. little index secondly performance side, the surprised enough. And was I actually the asset-based the then Fair a

to lumpy; bit Maybe one-timer maybe I little that some a forward some the funds. you challenged like mentioned of a in how it can we about I that the us obviously bit if like just you make guess. to and OTC give more quarter. Maybe detail? was you. there. are those derivatives, there little I just the you the it was overestimate by that's the stuff going Thank seems business. fees out stuff big this some want It helped that ETF break forward other Now things But I that of mutual really relative helped Can the don't guess going ETF side. think that side sure

Ewout Steenbergen

at at was in volatility, derivative XXXX. the look spike you very a February first recall due if you market there volume, to -- large exchange-traded Alex, might

recurring. see on the markets also And derivatives down. So coming you stabilized. more trading volumes that's then not have the

looking normal business quarter quarter, we is a are quarter XXXX. said the natural the exception this of hedge. first as more we first XXXX always But So more that have a this at level and an has

OTC markets So asset asset-based more if fee because positive. There the elements levels. derivative is couple increase. exchange not see for to is the flip into down fee to in was the way. usually ETFs are much positive so particular respect side with are modest the was matter. under that a traded going up Overall, helps that's X%, based a funds the saw indeed then assets that There of with level is AUM average where respect was a also going And administrative category. there levels. we mutual And change we Then management there so one volume

have the we level going certain in managers. forward. implemented be our is by new improvement reporting That now basically and will a asset faster from in and levels normal where step-up We of processes that revenues on one-time have accelerated

So that starting have is second overall second respect management the much fees. I like element we optimistic under about in better are seen at of outlook the the the think to is mix with said, so I But goes the we the than quarter assets point beginning of that XXXX. because in quarter other assets here

Alex Kramm

get you. it. Totally Excellent. Thank

Operator

from you. Patnaik question Thank next comes Manav Barclays. The from

question. ask your You may

Manav Patnaik

gentlemen. morning Good you. Thank

just was the was that I on mix much of the piece how is your Can question us Like that And I non-transaction components what's of you business. that help I The understand hoping of me is ratings first understand had understand Ratings down. within you I just why the the Evaluation help guess subscription? you going with way just then described could CRISIL?

Ewout Steenbergen

was year-over-year Non-transaction revenue million Manav. million morning which Good was FX-related. $X of $XX down

ago. modest what see with the largest therefore a second So, market. much a we the non-transaction to lower activity impacts. in also relatively was very driver were to CRISIL this Evaluation that's is bit clearly Rating linked of was couple Then and revenue. revenues a here the And That fees the That quarter M&A year and compared driver is Services. of rest then

the dollar. actually difference we modest Indian up the happening non-transaction from low headwinds, then U.S. to coming the and But we expect exchange which period for to ratings normal fluctuations time are a some down based revenue is in revenue. a expect and foreign of ago a of of due year slow offset mid-single-digits. the in healthy exchange With impact Indian of those but analytics a see within CRISIL. First to quarter-over-quarter we trend will see to market rates still somewhere between revenue business, way. elements foreign But and over some growth by of rupee the the that respect on non-transaction research are Overall, longer maybe that is

Manav Patnaik

That's maybe your current on okay. helpful. the sheet just to is it, balance then leverage leverage pretty And close or target target. your Got very your

what you the plans have. with and Just are any flexibility on the there cash thoughts the

Ewout Steenbergen

Yes.

capital our of to within We committed set. and we have have disciplined statement we around capital clear with stay are course have very our and philosophy that a respect we the -- to are And targets targets. that

will So, our point, floor we leverage at below of the a range. fall

certainly will be is sheet. point we'll proceeds at our the I leverage with What to adding to still consider balance that to think new do determined. We start

first think I is to in know business. you reinvest our the priority

investing in way this year in are We stepped-up initiatives. a organic already

investments. ESG You for inorganic use areas. know and also those and and of We Kensho all the and about technology other proceeds China could

the remain to a to of third We then, capital option And from perspective. return is will course, we continue of very valuation disciplined have shareholders.

committed you our to to still respect be capital may be philosophy and those have to expect us targets. with targets So, continue determined, we to clear to but

Manav Patnaik

a All lot right. Thanks guys.

Operator

you. Thank

Blair. question William next from Tim from Our comes McHugh

your ask may question. You

Tim McHugh

Thanks.

on I growth Platts, I wanted update years ask selling improvement? the Platts. that few with selling you success any Just develop of to the seeing to last to guess the an improve those guess are on the tried the over Thanks. And environment, analytical you've solutions

Doug Peterson

Hi Doug. Tim is this

sometimes some what that et high, some the been to have looked squeezes the of the very comfortable if in prices. always it low; We've sometimes squeezes always cetera. the price of of JKM of a range people the developing correlation kind Well, the Brent one. commodity we've too past, too gas. first buyers; products in I'm of as as range giving see. highlighting of But oil also the it exactly get all, which with kind Platts But me get in there's prices natural it Let if major we've is. take said like any marker been we not a some see sellers new if And was the we've they components, rebalancing been of price of there

much and neutral actually dealing for markets. that we So, environment past, to we're this the we've commercial to in the Platts. approach mentioned see selling relationships out a benign with And very to have maybe positive pretty into as how a about -- getting we're is

positive So, we're seeing what would neutral we a call to environment.

products On Those this basis. as in sets of part made set. well the and had We two analytical out investment you the continues are in their be build data our years plans. that actually as last solutions, included own plans know to growth data to have as on a we acquisitions

have as new is One the via our where our a cetera. the S&P instead heard market which is information, wins Platts customer to et to that early Global provide to talk initiative information analysis, their services, be the in we a a And of of is PDF, building able technology now able they're download to that used be delivering to is I'd they're that us of market. set information single to an which platform, mention PDF. subscription able deliver the seeing their online materials to now through all to using spreadsheets the about you've have like base a piloting

for And building out in platform, very of elements kinds we of key the that vision Global one of foundation So, Platts those can deliver the was S&P we're a strong solutions. laying this analytically. so

Tim McHugh

investment Okay. guess Intelligence Thanks. in particular just spending on Market then and And the I within Kensho.

about so continues it us an I build, and ingested go do data guess to where guess you expense, we a this of Can the a spending I maybe commented the we Or I that against XXXX? XXXX, you terms Is guess to stays elevated start relative to project cost builds as years savings weight get year the margins? this or help level level? think forth in I guess progresses. or year see You out subsequent this reversion as at two

Ewout Steenbergen

part the of years few organizations is the don't for expense recur. Tim, and for Market really setup and market. we're at current for cases investing business we operations a is provide build-up this we will and next new products part if you those a to those in phase the expect the for look where Intelligence, A of really to new year

expenses those will forward. going So remain

should some some the to to I the revenues that little expect over a in off that will think start biggest see years; initiatives out difference you faster next is drop time. further a those little few bit

of revenue the are of some in For could years. payoff the three Chinese terms five example, to horizon that have the But always investments be Intelligence, Market more bit others we in said faster. in a

to that growth in ultimately the improvement are Intelligence the going will change organic we Market lead So doing should you year biggest these investments this an expect there of forward.

Tim McHugh

Okay. Thank you.

Operator

next question Thank is Capital. Mr. BMO from from The Jeff you. Silber

question, ask may sir. your You

Jeff Silber

talked come outlook since are still with Doug, the issuers, same the of I'm thinking wondering about you lot much. uncertainty to way December. be depths having when so of the terms a conversations presentation, curious Thanks the things? long just in they the just started out seems I'm there. in a you of markets there your

If color you could be would great? provide that some

Doug Peterson

well then some basically is as there. I'd positive into of lot two the Yes. There a this as definitely uncertainties. divide the uncertainty of out

particular with capital strong, cheap the very and banking is still accommodated On flooded the into policies the sentiment liquidity positive in consumer place around is strong, sentiment central strong. The balance world are banks in side, capital. Europe continued There's markets. very abundant sheets business have in of the

just so U.S. So level. seen Even though economic or about for there's next very year, growth. is XX% Europe, And see but And probability a a And a very, it a probability the estimations a very slowed a actually very in also we've then China the which low in a of low recession down global last growth strong are our slight we own slowdown quarter. in the global in had also little months, still growth. XX from and strong U.S. bit conditions.

some to or negotiations. what's of around markets waiting the are Clearly, trade see going U.S.-China uncertainties? European there's still are still happen are uncertainties with challenges There -- what the the to markets Now trade. needs are be few still a Brexit for to six went weeks even is Europe Southern months, were though And Brexit resolved. about ago, in quite still we something weak it panicking particular. that away

to have that the And area. weak create Europe also of said, continues you political pretty a is then issues some -- So still as uncertainty. be some I and trade issues

Jeff Silber

haven't terms Okay. my the you color. business disclosed I potential the roughly the that us how large in order can of give sale Ewout, And is an that know you can regarding take business. follow-up, Appreciate of so model? we the out But details of SPIAS of our magnitude

Ewout Steenbergen

Yes.

is disclosed a But relatively not details. should business see those small that have that for you We overall, us.

and in results models. say the on impact relatively would small. large or I your material a difference not So the

Jeff Silber

Okay. second And that's of is said? part at happening you what that the the end

Ewout Steenbergen

Yes.

mid year. closing somewhere expect this of We

the half for this year. you this, of take model it you second should probably if So out

Jeff Silber

much. so Thanks perfect. Okay,

Operator

from Our your comes from Sir, question. may ask Sachs. question next Goldman you George Tong Mr.

George Tong

morning. Hi, thanks. Good

of year from debt, have mix Your overall there forecast can than full is would your a deeper be unchanged into pricing year the down categories how for expectations perspective? you and global for what Drilling changed? And individual implications the issuance issuance less discuss the X%.

Doug Peterson

Hi, George, this is Doug.

little credit change a for unchanged. and slight as you adjustments taking As pipelines, by relatively finance our be really a much change bit, we different to bit, it And speaking be slight, of and similar we've revenues we very of what differences we've couple markets, had quick what institutions see minor, classes see see from a investment overall it's bit. forward look little those financial revenue types the terms up and look in this banks, what public mix. doesn't from the well different But we from at at so and looking it with as we for what expect the debt be conditions of underwriters industries corporates as terms looked what in across a of we have is looking asset a at made There little a what global to to for at to are net-net, see in change of to before. in and we down is down issuers a to

George Tong

And year? operating helpful. margins looking drove course quarter it. in about you the over Platts Platts, revenue of at they at what how And That's then to the reasonable declined talk expect decline? Got growth. Can margin the the profitability despite evolve you at

Ewout Steenbergen

was timing that driven certain mostly George by of expenses.

were bit So higher that expect we the for related and that quarter. don't have initiatives to particularly this events a We some the remainder to expenses continue of year.

Platts So, margins therefore, for a the margins in from of very a we develop ago. next margins to favorable way that expect the outlook a will the respect are still we and year with the compared to three for comfortable quarters perspective,

George Tong

Very helpful. you. Thank

Operator

Mr. Fitzgerald. Joseph you. from Foresi Cantor Thank

your ask question. may You

Drew Kootman

This is Joe. on on question Kootman a Hi. I quick for had Drew China.

you you be provide wondering had a region. was mentioned in risks a Beijing. or could updates if may I in better you seminar the understanding of You the give us seeing just any And

Doug Peterson

more methodology into agency ratings. this there. to very open continue and approach this first underwriters, starting for heading build, the to calls having with XX it market Since transparent able valuable financial having our Nice had relationships thanks Well, with see over was up launch China to March question, with be up them officially, to XXX opened the issuers, more our rating up on with you investors, seminar. Drew. debt credit hear and et the how introducing of we're to about all, market to institutions, to we now with with then, that rating talking today. felt to our talking We're with with credit agency to by players, to do cetera, we're a by relationships approach We issuance about to in employees, an We customers. the and

the type it China growth level to China at issuance in look of far. clearly comes and We discussion developing. have when the that When been risks we about done not an so of the China, some growth there's of has the

investment-led a domestic was know, very markets. economy, which in are sectors ago lot with years watching which you more towards a that of They've consumption the -- more sectors. few property economy. consumer-oriented we're couple of much a a there, export-oriented We would As think a the few be an China there the investment shifted carefully

we business growing, which debt and great official to now to well In the we're key in that did from there's has start see of need in the market would reception been any China. If with China. excellent ensure think raise ratings addition, major we our some But we don't those. as credit working right enthusiastic off regulators to but relationships bubbles we success we with a players players as be the very market and municipal

Drew Kootman

And you about then, Great. questions ago. a talked Kensho couple of

seeing the RateWatch any you're forward? moving So as anything from Kensho on just progress -- updates that you're and seeing and

Ewout Steenbergen

We're on. our still thinking, what models, innovation the proposition Kensho our change Kensho for There's in and is to initiatives S&P business a catalyst going markets. and new excited very about for with doing our to as Global, respect

enthusiasm on interesting new initiatives We the as there's lot Platts from on the the some on team moment very actually we you that of have continuing in going are initiatives search, at of Think And initiative of initiative a before. around the of of well. about implementation other a the Omnisearch we around leadership the implementation Platts some told this the and that that a respect provide details with you to you of at so once With fourth more respect the to form financials give more XXXX, expect and year of will details planning of the end again. to we that later to this the we're by that a particularly year. this in We the end value-creation platform did on beta update we introduce year. update, quarter

Drew Kootman

you. Thank

Operator

question Sir, from from ask Huber question. you Partners. may your Huber Research comes Craig This

Craig Huber

your if I Thank for just to wanted Doug, ratings can you. we focus business. China on

now. kind that I you Just have believe, you the ratings in that Can world. the market analysts, curious, right X,XXX, rolled around I guys you that? out how could share like globally, big in something just think of analysts clarify probably you you that, an have X,XXX effort if of of have But there. you guess, sort ratings as general as market and number participants think with going it stuff? you standpoint, forward this from year sort of, up how do scale you -- S&P calendar talk about sense, of this here? you China a is, opportunity market of How big do -- an the how next and talk what's your think you of standpoint, year, might

Doug Peterson

Yes. a up, think all, Thanks, comment ramped Craig. Well, that's important. first of because how just brief on I this we

to did this to veteran going for sure are trying the S&P wanted originally approach understand to going how a speakers back-tested the of built view. to rate place. been kind out with we make spent market, And month market, be with ensure that that years, Global they with a Mandarin cetera. we What we're long-term they criteria, dynamics that to we've on consolidated in able out understanding right market last laws, we in a offshore. brought of to -- of build we XX is, the the had laws And domestic the this from recovery criteria domestic criteria, credits analysts et to then we bankruptcy using few relationship a up building we who As started of working XXX domestic

out to doing hired XX more the and that analyst. As we went market were we

teams those we they've in discussing Chinese our they've done. now out sales different market. So XXX-plus types and And They've XX that different covered building of sectors what means initial credit covering and market have that right now sectors the analysts done and subsectors XX up relationships. reviews and are with that the

size financial They're most investors. pension are by held -- of only institutions. also of foreign It's bond U.S. it's as holders a market the by you've to necessarily this X% the the have terms bypassing side similar close world in after the just They Now offshore individual of the in still Japan are into well. the and held on second and bonds heard largest bonds and before, system public not banks

is market short-term to duration is bond which bond we about the the or shifting market a from this of duration. dynamics market. going X duration. as presence. with year by It's short-term depending at A international more which to as for being So a that XX still ratings. is think is U.S. less And We oppose look opportunity change. a you held X-year on of institutions then very financial is to that think typical all very changes that It's little the that

to first year. going not built And revenue revenue an this very I'd model think build a over come to is back we're off We the have ground or model. out aggressive we prefer financial just as progresses investment could information really year. floor for We year a think to time that the out with that be at either right you some because directional the more thing running. now of this and getting we're

Craig Huber

Great. Thank you, Doug.

Operator

from Mr. This may question Appert ask question. you Jaffray. Sir from your come will Piper Peter

Peter Appert

Thank you.

of thoughts environment? to for impacted in is debt on rate just if And Doug, terms in related the seeing by second wondering quarter activity you're I'm more refi the that, interested the So activity your market? I particularly what was in stable

Doug Peterson

Yes.

to a year. seen the the weak. So of mix still saw second far is similar so very throughout of kind only the weak first the quarter. it's what quarter, the European were we in part been in it's month The Europe we've markets first

XX% down In high was And quarter. was if down first yield In the we've look continue. in XX%. market total down down in you grade at institutions seen was the X%. Europe XX.X%, fact Europe Total was Europe the that financial investment

an slowed there's Europe of situation you the new LTRO-like than world, the into have very, banks uncertainty has partially have being rates. a ECB. you the in very of pumped little and rest because some are bit low round down, then by that a of specific interest economy So different very conditions in also It's the the liquidity

as saw to They'll U.S.. It's the those aside there know not down a up fixed but or So new actually the was loan but first activity market. bank to -- coming Europe the markets U.S. the borrowers on XX% the you that was in market to. loan, quarter was going What putting in the bank apples-for-apples, over loan of issuance income we was high-yield quite if decide X%. will the they're types and it is go very

comments weak actually -- that last pipeline as the for his though great looking One month mentioned was seen deals Ewout was seen M&A and has in refinancing have year We but pop that April started back trend of -- not we've first lot either, starting to the April refinancing. -- we in at you people with activity during as quarter fourth in quarter when the -- look lot the did a this was to some better is activity a new the market see mentioned first in well announced. coming quarter a and actually issuance overall, we

as at So announced one down the deals road. issuance our track started well of usually looks popping is has indicator charts that a I up Services actually which for good which Ratings Evaluation the as

Peter Appert

what the as industry possible we're bit share your quickly. of been is to better a Is offering? performance of earlier line mentioned the then gains product than of a versus you've how Market And some that it. from Intelligence function of quite seeing just Got it is much extensions on Doug delineate sort overall.

Doug Peterson

more what a that I don't coming growth the I lot from products. in or their from growth of granular had services which had charts data newer and call things growth strong incorporate where are more our see We The looking even the credit But are to saw, and saw the feeds users. demands growing you and precise today into and a but data gains. nontraditional modeling. answer are that have I is for own ways for we desktop you users what's from to is what new you tell it you the give share from stronger data we you on our could would from and

I gain. And But is any it's think trend going specific don't investing about something have share that forward. comments we're we that and think to continue so going in I

Chip Merritt

that dependent on The customer we're competitors less Wall if of I much Street. some base think about you our add only our thing would is versus

also the well. as into that think I numbers So plays

Peter Appert

you. Thank it. Got

Chip Merritt

Peter. Thanks

Operator

Thank Bill you. Warmington Mr. Fargo. from Wells

your ask You question.

Bill Warmington

Good morning, everyone.

Doug Peterson

morning. Good

Bill Warmington

So about a competitive for the you question landscape.

leveraging your Ratings. been real estate a to with data data view of has that One Ratings competitors commercial throughout main aggressively adding assets

of I in have you Reis, something to in you think CompStak focus and so your Is need area that arsenal? well for on. an as

Doug Peterson

looked on continually to Ratings enhance we've major As our what we well right all update is to our at need emphasis ESG. and as analytical have as and improve our is products approach to now of

its see it's don't we there going, yet is As know defined and exploding We exploding or you ESG data can demand. believe content. for that it's but how we what an think direction

fulfill data real whether ratings. it's or adequate or to have it you et this up. if two launched excellent that interest we believe specific that benchmarks to produce access building be last quarter estate where duty launched to -- would quarter our saw to recoveries is in we which we cetera out first information So products or we working this it information we're and ESG about quarter for credit When significant rates or comes either on the have

Bill Warmington

of Ewout's first And Okay. a inflows. quarter some on based the about question comment then ETF

I inflows to are they as short-term phenomenon You in the or longer-term thoughts mentioned you your a about $XX come whether at a that equity on trend. wanted that $X U.S. get saw billion flows more had just billion. of but

Ewout Steenbergen

asset share overall going perspective. always Bill. time. That's already geographical fluctuations different categories number in XX% are either looking at or can class the assets a indices. of and ETF is basically morning, short-term. using market in that perspective longer the for that This an our is we overall movements that to a differ under management period having stable are of Overall, from see We Good are asset these some quarter-by-quarter. clearly flows we from But close

those April, to a month pretty share of So that this actually our to continue is and We're example be share for flows we market good. leading is robust. fluctuation with seen market have equities are that really look period-over-period. the U.S. If we at in

move really can So again this bit. around a

Bill Warmington

Excellent. Thank color. you much very for the

Operator

you. Thank

final We will from now Rosenbaum Shlomo take from our question Stifel.

may your ask question. You

Shlomo Rosenbaum

going bit of Can any be I Doug so squeezing just a included think the for investment. you can or retention that want XX% costs? be you you talk on on the elaborate about thank clear to and Kensho potentially now? this in just you new And Hey, now you want going don't right I morning, that can me initiatives to investment. there, Good is that? in. little bonuses but things highlight people It's be more clarify Hi. that planned might -- -- Also to the just it it's maybe

Doug Peterson

Yes.

So question. company. it's acquisition difference the with asking first and of having made the all the really across of that for Kensho very pleased and the Shlomo all, making We're thanks thrilled

also those potential even data-linking. there's of at Ewout helping corporate team highlighted, on business on they're as well use the ways process now find that close to in a Ratings different look And of Indices. talked ways those just the search to few of faster the areas a we as -- that traditionally mentioned information We model. couple it embedded we about where us get going had with overall. capability. a that Platts and to Kensho. some going a enhanced identify functions I and look manage our some as activities on like is that have working businesses wins to early market of value the in we're omnisearch we the Platts as examples of to improve our this and business of invest in result opportunities have valuable our to the opportunities We And it's are continue something investments now and are for decided where coming on a in we've had capabilities that's if we've growth which at way the from And

new going to They're related help us we where where investments can they're So that. we're growth. in either with related that think products opening Kensho new or to to launching be markets

et tools expenses expenses with and people for the Kensho. results data are computing those of with some very But them they're progress or geared of early capacity that off growth. are we're are cetera. of based capacity towards And additional all of Some comfortable those all

is lead there say would -- as that's productivity well. on of work will some data I the potentially Although going to

geared of just lot putting behind but productivity us opportunities. not this we're is towards growth So a being

Shlomo Rosenbaum

right? And of part incremental Great. the These actual retention the Okay. are investments? not payments are investments

Doug Peterson

investments. incremental are These

Shlomo Rosenbaum

Okay, so Thank much. you great.

Doug Peterson

you. Thank

Doug Peterson

of just joining me first let Well, wrap call today. and this up all for thank the everyone

long-term to businesses Future that As you've with new and a finding committed about growth growing continue employees our to us, as to We'll from Markets with the productivity. shareholders. for continue be foundational continue consistent for have capabilities using we our speaking of you to our Board for also us. a the and Powering to growth our ways show our as six to Directors our of to the to investing frame heard framework use of guide We're as that approach with we

for So back you again. quarter. in we look being for And your the that support. great second always your questions of forward again with to Thank the you touch with at end you and thank

Operator

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

S&P Global (SPGI) 2 May 192019 Q1 Earnings call transcript