SPGI - Earnings call transcript Q2 2019

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Operator

Good morning and welcome to S&P Global's Second Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to introduce Mr. Chip Merritt, Senior Vice President of Investor Relations for S&P Global. Sir, you may begin.

Chip Merritt

you S&P thank earnings and morning for Global's joining call. Good Officer. Doug this Vice and Financial morning's on Peterson, President call Chief Executive Presenting Steenbergen, are President Ewout CEO; and and

with This our morning a we news second XXXX results. issued quarter release

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

need descriptions we within projections, Securities statements. current and information, Act are including these conditions, future estimates, results actual for to historical forward-looking are begin, certain such may of Litigation materially Before forward-looking about may discussed teleconference I cautionary the remarks XXXX, statements. Private Except meaning the results of to forward-looking contain subject matters that and cause to the economic Reform provide risks uncertainties and expectations current differ events. based on in statements from of and in Any the statements, anticipated

company. ownership your would call legislation of Global investor understand a impact Securities statements to like who should investor the the Commission. in attention call reports has give Exchange XX-Qs to In Form this listeners obtain of with other cautionary of X% more contained filed a and Any this S&P the we to potentially of also US European regard, better the direct and I me to periodic on or and our the expects XX-Ks, regulation. to

with media aware call. on do us have the that we some are representatives We

would we media ask Jason and XXX-XXX-XXXX. investors directed to for at intended is Feuchtwanger be the questions call this However, from

Peterson, At this time, I would turn Doug the over Doug? to call

Doug Peterson

Good Thank call. morning earnings you, welcome and today's to Chip.

diluted We're adjusted productivity results. expansion. margin operating a increase financial quarter we expectations the these pleased and Based our detail on improvement on achieved four XX% to growth XXXX we're margin and revenue contributing in adjusted Between significant to for adjusted report moment. divisions and Ewout in EPS EPS. revenue which progress excellent initiatives, delivered growth raising second profit rest our guidance All results our year, of a the will

and late the Share repurchases anticipate in are return, in later ASR that capital concluded $XXX July, million $XXX we we an initiated initiating month. ASR important this of component We another million February.

we've to funds know, investments opportunities. growth in you earmarked meaningful As make

several details ratings market, Chinese In launch evaluations, the around first these successful the index including and a moment, our of I'll futures. in of bond domestic ratings CME by Group first our E-mini share ESG Micro

financial recap the revenue for To to results more increased than the billion. X% $X.X second quarter,

increased basis adjusted increased operating XX.X%. XX%, and margin adjusted profit our operating points XXX profit Our to

basis, which track meaningful XXX points measure a four-quarter increased XX.X%. margins is improvement, a this in on Well, basis trailing we to adjusted

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

This ratings trends. quarter, start with let's issuance

asset CMBS. and bond decreased loan US, finance In declined declined high-yield toward as dropped in issuance XX%, issuance XX%, declines investment declined partially CLOs, ratings, During increased by public in aggregate grade gains in performance classes. bank with global we bond XX% quarter, and finance structured with X%, offset X%, X% RMBS total and global include the second also mixed If across issuance geographies XX%.

ABS partially due issuance In high-yield increased decreased declined covered finance X% CLOs gains and overall. RMBS bond X%, by decreased to XX%, grade investment offset structured in as XX% in Asia, issuance Europe, bond bonds. declines decreased and XX% In in

chart with track end introduced XXXX. quarter cash we earnings most to attempt call, at the to XX companies the XXXX debt of fourth cash overseas issuance the the On this balances and of global

to cash upbeat As companies the to you among balances compared can of the XXXX. here, previous forecast these see bond companies the forecast. issuance is And decline. global XXXX latest anemic modestly The continue increasing is issuance these more bond than

results, Excluding is international impact our X.X%. on has increase minimal which to issuance financial public finance, expected

rising more loans appealing variable was have demand for Investor when were rates. as leveraged loans rates

the relatively investors. its Reserve dovish, with this is than more In a environment, rates have decrease. that Now high-yield from attractive the looks more tone fixed rate debt Federal expectations shifted to to loans

a $XXX million to to versus bank of quarter ratings in million revenue led decrease quarter in loan $XX in second This second XXXX. the the

of of During areas Investor future, introduced in goals on markets orientation initiatives framework and and the we the allocate use six powering innovation. capabilities. Day, resources. in framework the our pleased foundational global the new number to including this our set share progress to great a customer We I'm

city month, ratings leasing for rating credit a was This ICBC leading which was of company, Global assigned inaugural AAA published Last its issue in bond Leasing domestic Financial the S&P market. first on rating Chinese a Chinese was issued Province. a Company China Limited, rating City Luzhou rating Company S&P Banking Ratings bank scale. Global rating this Limited, same It on in National second BBB to week, And just a China commercial headquartered the Sichuan scale. was issued of the Luzhou

hope our a as In doing has wider financial markets, Global spectrum a longstanding to they These global S&P significant can demonstrate the the domestic the China its principles and the domestic of of rating to to two and contribute market its global financial connectivity built of system. begin transparency. so, evolution for ratings that ratings to brings goals China to fresh perspective expect on we objectivity interest and

efforts. and their rating, its evaluation. entity grounded includes ESG gain looking and understanding analysts credit is factors management. evaluation ratings that and and purpose, between evaluation The social, our unique, governance process ESG ESG is The new quality. investors Global is first Ratings interactions assess company's environmental, ESG strategy, to companies from management Separate the issued sustainability evaluation better an help for S&P a their to a the of

I investors several granular management, will each safety expect who transparency score differentiate usage, considered ESG gas approach. reporting greenhouse have recently and water a our emissions, the further that as met in factors such with

You can see the on factors this slide.

the first Energy, evaluation was the The for and largest wind ESG of NextEra in US solar producer energy. world's

Spain's telecom and The and evaluation first providing for fixed voice, in services business was Internet and Europe to retail Masmovil, fourth-largest customers. ESG mobile operator,

that releases year, actively asset down to the XXXX. market indices for trillion. actually that were managed S&P year, benchmark late levels Indices depicts the Each against annual XXXX $X.X of Jones Due occurred that funds last of the and end highlights of survey the This stock correction chart Dow assets. versus survey our to

largest The and S&P trillion. assets. than products support the assets the Income XXX to is invested ESG Beta Clearly, were indices Other X.X include our past $X.X year. Fixed in trillion passive funds increased the index unchanged and in which other the year-over-year in which tripling categories and both Numerous indices declined, trillion. with at more with and Smart ESG

S&P new foundation XXXX country ESG, S&P/ASX with Jones ESG. to advance eligibility. is Indices, Japan May, indices to regional Jones and well-known family XXX XX XXX Index benchmarks, were scores versions ESG, Index The Dow S&P in ESG ESG. for Indices added the Dow S&P of continuing Global and ESG In service opportunities S&P including

the UBS this which shared screens launched reached earnings in on In launched our DWS Index, XXX based Earlier million. June, the environmental, ESG XXX ETF the call, on On in we our same firms social, profiles. ETF quarter just the AUM Europe first ESG that and $XXX Xtrackers government's lowest based for had the with S&P ETF out Index. week, ESG S&P

the on make existing E-mini more E-mini In E-mini investors. futures new and are Micro the prominent Micro based the size certain and more the accessible. May, equity affordable CME futures XXXth launched Jones These E-mini were S&P Dow Industrial indices, Micro of futures, futures including four index XXX are Average. for trading that's to at

launch dubbed volume shows the largest E-mini with volume. million daily the This the Micro each new CME full Group's S&P in week. chart seeing the were most products history of with the contracts the successful X.X average first XXX contracts in of traded The trading recently

and Global. sector the include indices delivering Indices S&P/CLX Chile, launched the new and with local investors innovative Estate Examples nurturing products S&P Food Stock CLX Index. an focus eight benchmarks Construction in and is Delivering recently emphasis Index, Beverages important on a of Exchange. existing Santiago at new Real innovation, the S&P

month delivered the with Platts The Europe close in trade market development added of being last and WTI price the Midland market first assessments these X.X% earnings of for further of step cargo on LNG US sulfur marker. of are Both discussed ever Two a that a number forward we a delivered took calls assessment eWindow. the the Platts crude on been have fuel have a JKM the marine process. to into

into transaction inclusion eWindow offering on The ongoing Close evolution process. and maturity Market transparency enhances to is markets. participants bid, The for marine or and offers, of Platts MOCs important submitted fuel MOC an and LNG editors. in on the the Platts eWindow milestone by process

call Ewout outlook. financial additional like performance our insights Ewout? And I'd now and into who over to turn to the Steenbergen, provide will

Ewout Steenbergen

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

mind few financial I Let operating the in figure, Kensho revenue to included XX% primarily other a Corporate moment Doug will Market is strong me that XXXX growth. covered Adjusted by results. revenue. the Intelligence starting items. included spending. our take start keep of second within revenue a Please XXXX profit but cover reduced improved adjusted and quarter with Unallocated in in it is due highlights line project to

lower than XX.X%, slightly was due New expense tax covering year the to stock effective adjusted option a XX% years. due State This was to with figure exercises several reduction audits second basis tax XX accruals quarter last prior-year primarily to associated compared FIN The because interest as of resolution year. was rate ago. higher Interest the points unusually a of increased low the York XX

weighted quarter. program. the continued important X% element diluted return to shares resulted outstanding. options Stock decline of associated second exercised a shares with XXX,XXX repurchases, be our capital during in our These an Share were actions average in

compensation, activity This EPS running is stock well year. resulted in option benefits on tax of Year-to-date ahead $X.XX. last a of stock-based

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

Operating impact on had in of foreign the negatively Intelligence Changes the on negative a Euro by and Market in Intelligence favorably Dollar by adjusted was the Argentinean the revenue Peso, EPS $X.XX the company. of and British rates a favorable impact and impacted Australian the was weakening Ratings for Euro, impacted Market revenue and Rupee. primarily Ratings the weakening divisions, Pounds. exchange profit in Indian

these million associated with impairment $X $XX Lease office employees adjustments Penn million in are and Ratings quarter, in downtown. at million had $X four our Kensho a in our charge and Plaza to Platts retention-related restructuring York Deal-related primarily X million $XX we headquarters relocating expenses, Of non-GAAP amortization. in a New vacating City, this Corporate, space and

our a where in of we show pics impact slide at XXXX. the May can most Day the is This At outlined shared Investor value. areas framework to shareholder we that we

first require investments. two The

invest product adding revenue fuel reaching We out momentum new sets, to data need to to in with and geographies. new new new introducing technology, customers continue innovations, to

must great have We EBITA productivity opportunities to we fund continue to new gains. made delivering additional drive progress organic enhancement, and

the debt financial optimizing finally, maintaining shares outstanding, optimizing capital flexible cost, while we leverage to tax return shareholders want Driving to reducing rate. involves And interest capacity. and

to to shareholders least year. XX% of annual free cash We flow returning each are at committed

all This employees, provide improvement. in a to section results all new productivity the by color revenue margin quarter delivering products, across company. and divisions This benchmarks, on is and moment. a innovative hard nurturing our the on important business individual testament four our improvements delivered focus creating the I'll growth work

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

on versus billion considerably year. and the end of at the hand cash quarter increased equivalents first However, cash this the $X.X

its was XXXX. debt un-adjusted adjusted EBITDA Our the of to gross to to on X.X an growth targeted to range EBITDA basis, growth based decreased times. remaining our leverage months six multiple times of leverage first times X.XX EBITDA X.X On adjusted in our times within X.XX

during were certain late million and flow ASR to shares million there excluding expect of ASR dividends to this quarter. month. $XXX underway, paid increased items new million additional concluded cash initiate With the first no existing half of This Free in this during quarter. later a $XXX we million in $XX $XXX July repurchased year. the an were ASR the

turn with to deficient bond volume Ratings let's Ratings. the issuance that X% revenue declined increased Now, bank results and activity despite XX%. starting loan

have We emphasized

very important. changes of in The necessarily mix issuance indicative in the past, changes issuance the in aren't total is revenue.

With X%. our mind, growth issuance Ratings at increases the market. to High-yield was in price U.S., combined with increase beginning to the that of up high-yield in largest is revenue, our modest revenue and XX% cost incremental very revenue year the

revenue of exchange, Excluding the impact foreign increased X%.

less Adjusted to a X%, four-quarter in segment operating profit operating XX.X%. a XXX basis, X% than increase On points expenses adjusted basis segment XX in increase margin. segment margin adjusted profit, increased points operating adjusted profit trailing basis a resulting in increased and

Non-transaction like. steady decreased been million impact high-yield decline loan the because rating a majority revenue a time, from activity components exchange Over other. with revenue bank has Transaction in of driven subscription is activity. debt rates, due revenue foreign This revenue of increased in as is growth. to other $X the the by rating offsetting changes bonds outpaced the source each non-transaction

ebb with certain some volatility Services, and However, there components, flow Evaluation namely activity. Rating M&A is at

exchange in can always changes rates have an impact. addition, foreign In

depicts contributor in to revenue Corporates. X% This Ratings The increase end-markets. the slide was its increase largest by a Ratings in revenue

increased which than Financial was increased the more dollar finance X%, increase revenue. Services decline X%, by inter-segment in category decreased includes offset CRISIL other addition, an Market In denominated and revenue declined CRISIL's in Intelligence, Structured X%, X%. This for royalties and governments

Intelligence remind January on a need quarter strong X%. revenue effective to Xst. delivered with both of that increasing changes two Market I became you

revenue Intelligence, recording rather we now Kensho Market item a did include as in it in we as First, corporate XXXX. than

been has in have both Intelligence, Indices Trucost been for adjusted and from comparability. Second, results periods Market to transferred

adjusted Trucost profit data is in second began increased to spending Adjusted suited margin X% Market we to segment the climate, included in basis and Adjusted be XXX XX% up investment despite increased the here. business. better at expenses XX.X%, ESG Intelligence, and increased efforts investments the believe segment profit way under With operating points as pick operating analytics to quarter. increased

profit increase trailing the XXX delivered margin the of exceptional points on adjusted importantly, an operating to XX.X%. More basis basis, deficient four-quarters segment

to second of quarter a the first earnings in invest as of growth Xst. XXXX expect closed half The included $XX continue we We strategic mentioned we increased revenue approximately investment year, sale Desktop. our that business in spending and initiatives. the was SPIAS call, in million SPIAS July on was on

and grew grew excluding management XX%. this shift a X% while few as in slowing towards Desktop been category due revenue, prefer trends data the the largest Growth industry users for Data customers category solutions acquisitions past active desktop quarters has to increasingly feeds.

RatingsXpress to exhibit Risk of Data portion Solutions Solutions. grew the growth management growth. expense providing continue solutions with greatest as of level continues Credit Credit feeds XX% to strong we Risk the data

Jones a revenue a Dow with revenue approximately from $XX S&P associated million to future to Turning re-negotiations. recent and included contract change We segment not The delivered material contract this to growth, of several expect do changes. benefit XX% these Indices. non-recurring

operating of operating basis, margin basis profit points XX% XX.X%. we quarter, growth, reported adjusted an adjusted to segment XX.X%, In points. expense the of profit segment XXX adjusted growth, trailing increase adjusted second and segment X% operating four-quarter a the XXX margin profit On basis increased

during was Revenue the in quarter. mixed various the categories

XX% revenue in and to as contract well benefit fees funds growth ETFs X% primarily fees. from increased re-negotiations. recent due declined lower Exchange-Traded from AUM the mutual as Derivative exchange Asset-Linked

us XX%, Custom now result more change recall a a in quarter is renewals year processes. decline & This revenue Subscriptions we in and rate. Data as all run that reported behind contract a ago a second a associated reflects increased but administrative with the a of XXXX X% normalized delay

inflows AUM distinction I over more between in in and $X.X average This $XX billion ETF resulted make year of quarter-ending past division a want past was an quarter-ending the increase to AUM AUM. and XX% trillion. year indices appreciation $XX clear market than Our ETF, to the net over were billion.

based Our contracts which on year-over-year. X% AUM, increased are average

majority chart fixed We into quarter-ending were equity gains products. Industry because figures funds the quarter-end were as going are waterfall US shown with on funds in market flows equity disclose and global the billion. the $XX billion figures losses depicted Flows using right. into into exchange-traded inflows and and in quarter, best $XXX income second the

increased . the options activity The increased Volume VIX equity complex options in indicators X%, XX%. second CME exchange-traded activity for increased S&P futures increased at Index but revenues quarter, activity our quarter. derivatives the volumes the during X%, declined. XXX and modestly increased ETD &

volume often changes pricing While for in well. indicator revenue, change elements good a are our changes as in that

paid at volume. aren't the we volume differ on CME of complex example, For that at paid CME, the could profits on we're of from the the percentage equity the and

result leading slightly LNG, exceptional, XX.X%, Global was of to profit Platts to with decreased XXX as increased basis XX% increase a increased four-quarter adjusted operating trailing X% basis Iron segment turning a and of X% XXX division. margin an expenses in volumes oil, revenue increase Now Services profit in improvement Adjusted points. XX.X%. the points Core Platts and of Trading trading subscriptions, of to an operating The ore. adjusted margin increasing segment an

use is sale secure this closed the rig to we the North with RigData American rights adoption grew X% yesterday, datasets primarily three by to X% information. on RigData growth the ago to sale, Benchmark. X%, Ag result Platts going Drillinginfo. Also our & forward. In Petroleum and to increased a rate secured revenue and respectively. LNG rights business declined of Metals that Analytics purchased gas of years we have small RigData licensing the at Power X%. for we Petrochemicals and largest of conjunction the of delivered

I XXXX market that review keep ForEx spot guidance. Those Please to reflects slide our the lastly, that This mind current would And guidance. GAAP rates. guidance. changes highlighted. me our are to our discuss now items And in like let changed now, depicts guidance adjusted our

associated resulting by due due expense million our million range. to operating a option Interest primarily to cash benefits collections management margin initially improved Tax been points anticipated. X.X% an levels $XX has has reduced $XX than Corporate rate higher been professional by accounts converting receivable overseas reduction to US with stock and with reduced fees, to dollars. been profit activity has cash Unallocated increase expense of in by reduced in

These our $X.XX guidance diluted a items to in increase $X.XX EPS to range. resulted

expectations cash While flow, guidance free within for before. these increase provided changes our we're still we the range

continue upon and $XXX stepped conclusion, to our corporate cost up in including In program. million growth initiatives, we opportunities, investments execute our reduction our

be progress other just results, are of seen Some can programs in clearly our getting underway. our current

the on we are deliver company pleased advance to new We the to both XXXX are and progress with making, guidance. our

And Chip? Chip over the let question. turn to for that call me your back with

Chip Merritt

you. thank So,

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

Operator

I would Manav (sic) Patnaik] Barclays. now [Mr. introduce Ms. Manav Patnaik from

line open. is Your

Manav Patnaik

the The you you first X%, we more if X%. growth? of and think was on question some bit little was user growth ones, but obvious to what XX% but is also do Desktop notable monetize a just the know on could Market little I the the Intelligence elaborate positive, obviously desktop the to better show trends, a deceleration growth the user wondering is that at just I growth lag bit more of

Doug Peterson

Thank that of something you mid as going is growth for it's we, X% forward. know, Doug. targeting. is this all, Well, We're bit growth a question. targeting Manav, the you we've below what your first a little been single-digit

really have focused diversification occasionally to of been you we of from that on et is model. industry know, we're customers there few get been shrinking cetera, negotiate, our - And a request shops as some but so what's what the a trends that has equity business like

customer side, a - regulators we sets. cetera. We've have got governments, buy it, insurance different we companies side, you banks, corporates, banks et think investment sell have If about

growth, us. indicator XX% at when for so user is we look And leading good a our

for coming single-digit of we're year, of We cycles overall growth contracts, different still year. mid rest our the have re-negotiations the up of revenue the projecting also were during we but

Manav Patnaik

secondly, have of now. obviously balance just the sheet then given still And you that one most flexible in guys right universe

appetite to one think how trying and maybe large we given the plan just to flexibility how Just including today deals you about just about in the curious M&A, use that recently should that? think some for

Doug Peterson

it funds think to shareholders, you always all sheet. on balance that and for stewards are our what opportunities grow invest. should capital as we're our first us you we careful We our to our know, obligations potential of to behalf very take looking those and see seriously, of manage of to very would Well, be

be the In guide, the future and future, going in investing can and major we included year framework, with which the markets the slides put organic that's as emphasis other in internal we call ESG, the as for see, so powering we've I where with how really a on initiatives. a you we're China to investments last

as imagine, about of would having we're all strategy, just a the you part what right it's see looking out talk there, I So nothing to corporate be but development now. time that would specific would

Operator

Alex from Kramm comes question of UBS. This

You your question. may ask

Alex Kramm

long interest levels anything but seen you Want pricing just have getting, other a at good sort to morning of I and you've provide new opportunity I terms term, can metrics and but credit have you mentioned now. this can mean what now, obviously, things impacted. companies of far guess obviously terms is these BBB know spreads seen, Wondering, opening around if point have can Doug, what are any if data up a on you it's everyone. this sales China, bit I it's But, days, I Yes, couple what ask of, happening. early already, you ratings comment about been in so obviously know seeing, you're you're little of disclose more in you

you're I far? so a you big would what what about give question So seeing about guess can would like us

Doug Peterson

First reception from of themselves China the investors. in issuers business positive, our both from all, from the very been for has markets

issued a As positive. a this market were that a that actually market, and anybody the actually was you the curious rating was we to bond BBB AAA in and can that first issue the not reaction see, rating, week we is has time approached very

we're the applying we're market. very going is a as global be have to people into it's way interested that as using, applied, see well expertise were our how domestic to criteria expectations They the high what for

large, number it's the approaching third bond market. is on very still bond market you two the the As know, market largest

very XX% about But you the total market, XX%, short-term, total are in there, the bonds bonds of about own investors about about they market. are know, still banks the A corporate XX%, issuance Chinese policy overseas still about about as the banks years. of XX%, three is commercial overall, local only X% governance

And we've rated the what would side approaching issuers to have our to talk been so program if are getting about on formerly China, the them. people to for think to very starting issuer you very we a commercial opportunities about about able from dynamics approach build S&P be them a the and to those response active yet. with We're by we're good and we pipeline. Nothing be that team talk

then especially investor and is swamp and demonstrates there having be it to our of cluster AAA calling ratings AA different that level. more to at And with really learn going on the widespread to the the are ratings AAA about which two approach opposed domestic in a China as us around a all side, investors ratings, now we're BBB, to

as have do time record to like we'd we data. as What over more ability to is you more get we track give

we've that I'm We cover ratings. so And two start that, ratings, already range progress of sharing had but the far. a will very especially with that pleased of also, we're we've had really more pleased

Alex Kramm

but also good that tuned. continue you're efficiencies. margin stay finding new leverage, on I for Ewout, to operating to side, really I I'll do show deliver mean then seems guess still the you

they to to still or the about that, efficiencies turnover you. Thank So I guess continue many do how to out? run stones these find how to we to question, but ability if it's feel are a are you starting curious broad just

Ewout Steenbergen

have with whole we a company, are say would in we I of stones the we progress making. the still very and pile pleased to are

our with commitments the we are seen, all shareholders. deliver of As our given on to execution you disciplined have to we have the very of programs

the that you that aspirational its the if at Index now has one have look margin So margins business. we targets, overall, is business

On to XX.X%, the high a we set and is aspirational 'XXs. basis, trailing mid four-quarter target

and target bit at close Platts is have to have aspirational basis business XX.X of trailing XX.X%, with and target, and mid of is the Market being that and 'XXs, four-quarter We the margin on Intelligence at Market one now is aspirational high business, then now the that's room that Ratings still XX.X getting to little at 'XXs. aspirational a with four-quarter Ratings the trailing Intelligence target high the

our productivity to we which on to So, grow will have to the top we best programs in plans way course continue leverage to deliver line, top expense our the that way. to margins of the to grow deliver execute a on is operational line on the healthy

You've that way us in that revenue with opportunity all this businesses, continue and seen expect had lot have have still a growth we the we to and strong of may quarter of continue you that's our to on spot.

Operator

This comes from Stanley. Toni Kaplan of Morgan question

your You may ask question.

Toni Kaplan

and talk I the if but really are price. largest muted? Thanks. your can mix there you the is pretty other infrequent of to the M&A that competitor, and could though quarter any environment, anything still else ratings, similar about the issuers really, know you outside and just outperform in lot drivers to Similar or yield, financings you attributed your in the ratings strength notably even there shift environment performance is strong performance Are high seeing more also quarter in issuance a of and that mix mix, given to just explain

Doug Peterson

This nothing in what you and as is about, mentioned Doug. saw that really XX% increase what pricing. There really is mix the talked you it the we've was there It's also is is a beyond more just high in is the saw US which big was very in different increase We quarters. the that. part quarter is yield prior issuance, significant of this XX% really increase, in the a high-yield mix definitely and a

that transaction the going to markets fees We with go that during to the also corporates fees the pay actually not saw issuer us were that corporates, of we're the to quarter frequent market a this quarter. a on many went which versus people those

from unusual What's in a well. really there the prior was really was are drivers, nothing the that, But than quarters. dramatically high quarter-on-quarter yield overall. unusual those main other is important that is So a June is increase in there really in as that shift XX% nothing that in most of there all sudden

Toni Kaplan

And then shifting Intelligence. Market to

With you coming overall, strategy to see the I in of morning, going forward? you announced your years? or strategy if the make M&A plan CapIQ about large recent you change Intelligence your anything the talk industry And changing any changes large in if maybe view does sort M&A just could this to guess

Doug Peterson

both the first and obviously transaction, a be landscape, Indices. we've it and on MI and very I in been be transaction comment landscape, watching, they're watching both it's don't actual the the competitors, itself, and all, Well, comes very what in some want type to segments interesting changes with of would But is corporates, to but what very when the could we carefully, formidable pleased a diversified We've a in that mentioned Market Intelligence got I customers but universities take with etcetera. agencies, are very its which indices. businesses, competitor government have at and our this as of strategy we own, place on earlier, formidable our and already of

we data Market than a we across data to business harness have We're in Intelligence, more which can And how the but even already. growing our see have only something is looking that's we not business, also company.

few this the is that these with learning are data but from a space. a our machine assets competitors, to also ESG, feel like what that be in We will the that we're in very also competitor in years intelligence well with linking So positioned be done value there things trends which feel Kensho we terms is tough of showing to watch we've doing lot Trucost transactions etcetera. artificial some the various last of of we're we for industry data

Operator

comes from Warmington Bill question Wells This Fargo. of

question. your ask may You

Bill Warmington

for question Market you on So, Intelligence.

SNL an talking Cap of and and unified was the creating migration platform IQ how on that hoping been the executing a You've going? I users on onto platform for is IQ, get you've been new us to update about Capital

Doug Peterson

in a all, platform on divisions. way is for first Yes, we've it's platform also the other MI discussed to the is the working of supporting that we're us migration, addition we're important

through question, will As S&P and the going new functionality using continue But to on XXXX. to we're delivery for the ongoing an platform, data RatingsXXX & platform we in this products data support an Cap and very which dynamic sets add basis, example, your and IQ back Global Platts. Ratings, continue to MI to

Cap in for some to that that our also can the MI, so clients themselves to timeline we've sure all that. along own the way, be the they - can the be choose customers transition with of functionality make And involved along migration so more to ways to transfer their more found flexible the IQ to from

probably So is going than it's but transition well, the slower bit a had originally little envisioned. we

timeline So XXXX. a it's moving of into now more into

Bill Warmington

from that transition benefit a of legacy actually system, to IQ when able can get that the Cap do of think shutdown? So you're you - shut what down margin what completed, a kind is you kind

Ewout Steenbergen

really come haven't two we that, maintenance all with expenses the quantified obviously that running with that Well, platforms but expensive. is

quantified should at there leverage out operating So point be this but in that come will really of haven't that we that, benefit time.

Operator

This from Cantor Fitzgerald. question of comes Joseph Foresi

ask question. You your may

Unidentified Analyst

for you're Could in Drew customer system little This reaction the is a coming you on Joe. provide more scoring ESG getting? and early color the

Doug Peterson

so, you. Yes, thank

the the go that and intelligence. as in methodologies. a approach in the we've to And and there ratings, to together that XX profile of all, is common evaluations, groups we how which talked to of data in across in the architecture, S&P consistency we as call market the much Indices, factors into a not on a been had used I prior with we different well ESG the we design we are , time managing, there about ensure for too have team Slide put in Global, First products where detail. which was ensure had slides But included various this across where ESG have

look Just We've environmental social of an It overall ESG as and at XX then been and for different the evaluations, at it an example, to a industry a structures overall look years. governance geography also has ratings market. doing way the lot the factors. to approach with an starts over

these market right the now to different understand And ESG four how then can environmental, for governance those makes they the each being to and of that that the compared dig for into four receives for four of scored. total factors the of factors - score. to social, and evaluated. There for is companies used each then person different are each some evaluation is of this What other being and unique these analyze factors in are led the tools

and and and a meeting, Analyst evaluation, is overall Ratings In the the ESG place, addition, ratings in profiles. management team which stewardship governance there allows overall to ESG takes also which the management discuss their

So we a interesting really think approach. it's

two ESG We've of only so issued far. these evaluation

when and of waste the have years companies is to greenhouse acquired which ago et we segment, the a Trucost XX,XXX one pollution that Although included which three companies, and different is cetera. gas included now the in very comes also Pro other mentioned is earlier, it as including profiles environmental advanced Ewout they the in emissions, company MI MI

us leading use that all our position a ESG with also So we think this having Trucost we products. can real, gives a of across

really, developing. on far we're really So to markets from so much really good come, what more feedback good-- the

Unidentified Analyst

to then about And add top the of of China. the one previous just questions on

now place, seeing you are over with going of thinking that by push a and So rated are companies any rating, be from they that BBB all little or are that? you hesitancy getting see guys back and they the we're to concerned now

Doug Peterson

all. that We haven't at seen

fact, the In especially is market because what us see and this investors that more about approach much people reflective as more quite to methodology actually spread more of institutional the our wider a to pricing in learn have really well. with the come they is granular contrary,

- but draw to it's So too me really we ratings, haven't, this early has two from response probably been is enthusiastic. conclusions for the

Operator

Blair you. Tim comes William Company. & from question Thank This McHugh of

question. your ask may You

Tim McHugh

piece, products? slower there about Subscription Platts, then anything terms broader slightly anything was regard to assessments of so is ask of and the on happening it reflective wanted analytics the sale terms I that's guess selling of strategy the rate in additional of of in price Just growth there? both RigData, with research the a Thanks. to there was And in top you're is

Ewout Steenbergen

is Ewout. this Tim,

read anything trends. in not is should you think results change I that there with the to respect a Platts

mid-single that's strong of business the see little that's bit forward, we doing there GTS is a always the expect to improvements business this see that but business well. margin surrounds to is to quarter-by-quarter, a We expect lot where Platts a steady to business on continue path. Platts digits bit a going growing very and grow We recurring revenues, we

revenue source growth time way With main the acquired of through opportunity forward. to years secure ago. secure rig approximately digit counts going that the three RigData, at was a reason and agreement. mid-single time that in acquisition. to RigData North The In respect going strategic that had of to only through America, the at the was licensing we was expectation that to again data secure the So forward an meantime,

future, basis. these there sets assets that's was But time owner. on the decided we have this an ongoing same therefore, owner better to to for and the a access in RigData why And the other sell at data of

this I annual As approximately RigData, for prepared business, the mentioned it remark relatively $XX of small was revenue a million in business.

Tim McHugh

more, And - sort advisory then review doing situations guess of investment I there is units of sign two smaller some that reselling? portfolio a of popped is it the reassessing kind the just or any you also business, sold you're just of business these this up guess, or refresh coincidence, I is

Ewout Steenbergen

set we our with happy fantastic of very businesses. have think are we portfolio, we a Tim, So,

can the short that are where elements think need but always portfolio first be So of for and who are and there on there acquisitions, else smaller strengthen suspect better nothing someone large but review, elements, could looking is a is our we at based happening we businesses to certain sometimes owner. all portfolio there we and on a

in is all so in is terms But there these of continued small general review businesses, that behind healthy that. change this strategic see is anything in our just our nothing intent. term are don't of This large So portfolio. a

Operator

question This from comes Goldman of Sachs. George Tong

question. may your You ask

George Tong

revenue like this quarter. I'd deeper your Ratings to dive into performance

S&P, you major decline explains higher Ratings this exposure structurally high-yield growth X% that perhaps different to difference in power? other XQ revenue or X% pricing revenue at that would to Your have a in Ratings reported competitor issuance compared you say

Ewout Steenbergen

And Ewout, peers. you go have and layers hard terms profile, our us the for to George, it's course to in to our mix each of on I to three company. looking This some impact in think good changes market at comment understand on and I of is morning. think deeper of always But two our

smaller So we finance, and areas, having in have other certain we if strong structured in positions you for positions example, look at market are areas. market

CLO for So in position is is modest. if example, there relatively CLOs, a decline our

So us we a impacted so other from the that we an is a on is on question decline in Doug before element particularly that saw we pure more the be that. mentioned at in increase that saw and sorry, paying what's previous much won't issuers transaction And issuance are based - basis.

more where fee issuer have have programs arrangement. we our a frequent we So fixed

are and bit, would on growth we been a so a have if this transaction an in saw customers the on the more bit that basis benefiting And more increase the programs the wasn't frequent issuance which little then therefore a issuer case. quarter that

George Tong

strength guidance the expect half view to that the lower also trends and on outperformance? corporate back interest has you of do your XQ in in expense, increased is You could your EPS full-year weaker business your taxes the offset ratings year revenue reflect improved, given or full-year

Ewout Steenbergen

increase the progress stronger our in our making, look making George, issuance that we programs. think year. outlook, to Overall, progress around growth modestly are optimistic full should our for we respect the the performance, current the Doug you at productivity I the are are guidance. that is we with very mentioned

of think the take out all to that spend these new guidance. into a our second element higher would you about account have this One be half in you point like I overall, So if investment of EPS will elements bit the year. to

approximately about incurred second intelligence than market segments. first that XXXX in spend think the half and So half be investment will $XX million compared to in million higher the $XX of the mostly

companies because on year million, of two look at a combined second of also, so missing annualized the half $XX basis bit the divestments an the of in also $XX million, you revenue and we're had then divestments. of both did RigData, we if a SPIAS those revenue is And

has about of but you in what all guidance are we take our with seen a this look we should as you the quarter the company, very strong outlook at second half the combination year. are clearly for is have improved I and think been that of happy the performance, current very for So this also out optimistic

Operator

Partners. Research Huber of Huber Craig from comes question This

question. your ask may You

Craig Huber

cycle out terms calendar, et issuance you hear calendar credit here in up to in think the your at where on right and M&A updated curious spreads, thoughts Doug, when there strong debt follow-up? we environment are cetera the coming about of refinancing

Doug Peterson

Ewout debt many carefully with the - sheets and pipeline the factors. driving off to of having obviously for of built watch banks, of we what's first that mentioned some just balance we the growth. we different what up, very of We've speak people's on capital all, including what's factors of schedules, have for summary think various markets to also as Well, and rates looking based maturity Craig. going global investment at issuance groups mentioned Thanks, are obviously was earlier, coming been refinancings we our be

current Public be going see forecast, a and we So about Structured about the finance that for bit X.X%, well, rest in finance our to about as flat about X.X%, X.X% little a in leads are Corporates of the year, to Financial up up Services total. which

high-yield about recently, The right asked XXX - July the investment spreads you've are been has composite been right though XXX. high it's XXX But as recent around below now about a recently. pretty in XXX been of couple about recently, points grade, which was now, to now. pretty spread basis high-yield factors down as issuance as XXX low right In low basis the high interesting grade speculative was as it's points, it investments its

a XX Switzerland's is now negative down it issuers a Germany at that, X.XX%, environment the rate is low United negative, see is negative, conditions of at that been strong than on still Japan that is down the know as top UK but is had X.XX%. very we X.XX% low yesterday X.XX% rates. So the year XXX, was it's overall then for higher you down of little very and to still negative bit at States the just And X.X%,

I it's for a environment we attractive. expectation more underlying think rates there, the been, markets as although issuer-friendly are XX-year liquidity which with X.X% attractive. is good overall, they rest see this low reflected going There a are it's environment, we and as a don't think growth for there an attractive, is of not is the lower the gangbusters, for lot have in financing conditions overall base out issuers, that of They're trending with but of along spreads year. our very still So low which still

Craig Huber

the question, just comment most you there, of how in second curious, that's your acquisition now guys excited excited five you terms products in talk of, with, you're on cost most rates retention right have employee terms you. do perspective, about? enhancing to working also also, it with four, you from you Can that but a that with areas on Thank Doug. And willing doing? My about what Kensho

Doug Peterson

it start Ewout. and over Yes, to hand I then me let

I've just as So well really had I MI. recently in been originally and direct development employees am having with Kensho, in seeing as what and had about excited some done to I've product in with we the opportunity Platts contact things meet or direct are that Ratings beyond Indices, who

is business. interesting really in the Market Close, enthusiasm from Index there for the which team new our Ratings so team And at for and the that Surveillance, great, are Kensho enhancements for on being the is is joined Index Index looked into

but be a scaled also will Ewout let enthusiasm elaborate you to see the is tangible over attrition. about delivered So a that of the hand there it lot products company. starting me We're on little who tell or more bit beginning across to and to

Ewout Steenbergen

on redesign terms in in Close fantastic. the the a for team will that working to the can of has If, leapfrog Platts, be really just customers. in redesign involved the a in the I Platts, and process Platts here on share are to example, existing proposition the enthusiasm in with at around That's such of joint its people process, enthusiasm that Kensho Kensho. a Doug about which with Market

in search which add will a looking engine doesn't intelligence and of changing terms the about you and the more platform, If our that strong think to in that you're to and of important, markets is BXB the difficult search customers of we what really much it Omnisearch more platform make market at is in today. how looking experience really data fact, more completely and it the more exist very for, so this and

being already certain is groups is out to customer very positive. feedback rolled So and the that today

want you following Craig, of that I also whole retention are course course, industry spend time much of measuring you I happy list, about current closely, attrition we benchmarks to metric Kensho. and which for that don't very that. an to is can and on levels too the I'm question below one are very you important the specific give but have tell

well. as So, pleased we're with that

Operator

Nomura. Dan from Dolev

question. your ask may You

Dan Dolev

Thanks for me Great appreciate it. I results. squeezing and

X.X or just you starting So the terms little matter from to of last I to optimism X.X look ask of your issuance outlook, in negative being the bit plus differently, is at or from to a year, plus maybe a of deeper increased both? year X.X this guidance, into went

Doug Peterson

I - that Well, is a combination. what combination half. we would a this say - saw this is I really in the It's of wouldn't first

As while lot ago a numbers, as was there mentioned high with and mentioned before few the little statistics, I've half up more I give of I can a some you a yield volatility in first XX%. of

in grade XX%, XX%, in public XX% down the up Europe are but was corporates In XX%. were Europe, finance down issuance corporates sovereigns down XX%, US down was investment were

do initial what our what expectations. to issuance So far we try this against and see we year was look is so the

Also looking mentioned what are I at, schedules that are as maturity coming forward.

all important as team, is pipeline, that also on then team, are of by M&A XX of was setting well. these rates points account part taking our and schedule, and really way the yesterday basis the more in one together as income what is the this what put maturity of well, the we've the Fed is which the ECB, in environments a the Japan for outlook is rates, from factors attractive and US, seeing lowered they most seen earlier the which something that in the they And hearing from banks, upcoming they the is rates based into factors they this the our are what year, are issuance that fixed what so research a different

different So year. X.X% all the for the built those of would the are that be increase this rest factors of into

Operator

of Next from Silber question Jeff BMO. comes

your ask may You question.

Henry Chen

Doug. Good Chen. Henry morning, It's

level guess around you either wondering strategy can that markets of could you're Market in and and the analytics was and Platts thinking products for and I sort which to build powering data investments especially you're on for? business, high a ask Intelligence if about to wanted attack how markets. Just just question in on comment you Thanks. about I how thinking

Doug Peterson

we Well, future of way framework would gives areas provided. the call powering this in this or that you for we we a is done and can the markets It well things our the adjacencies. core that of businesses saw materials us speak of one to with core strategy the about their the that their the businesses disruption the in investments as as we've what

investments And we to drive looking to ourselves. customers, driving decided what instead we this back of and the our our hearing as growth part of and customers and come we trying we're what want, hear come our what our that with comes on by that, markets needed from drive up just with from

and our we also and commercial have executives, our intelligence, and out Indices teams key for not the trends, strategic listening important you are and but our they market that's the as of and is what of trends and others Platts much Ratings teams to data. addition can, in So only also mentioned the one as what most future

we of their where sense to they data feeds market When they're growth intelligence. trying is our meet have customers, over piles to XX% about very of in talking avalanche the This we Platts in an and with oodles XX% and data that own are the pleased make business and business see data, in they're of.

is asking for own of to provide "Can And are one us easier sense use make also us data?". of and with that's our data the us questions you they more

through is you our do customers the the that equation how tools data through the use combination on of that minds most with of technology, So one modeling is etc.

It's the we're invest. And listen what that, customers they feedback, as this where our to that's a is not insights, visiting customer how off we it's team how - at on a way. boots of ground, that actually to theoretical in out, we just customer really to need. We're we doing look decide based and going

Operator

take our question final of Michael JPMorgan. now from will Cho We

ask may You question. your

Michael Cho

Thanks I give thinking I talked here. on has for for but hoping mean, squeezing the the touch we think opportunity? question. was capture My want I size assets you today update opportunity on of if first can an S&P S&P, overall how on you you're to and in about framing ESG. that ESG me about this to call, the all ESG do then adequately

Doug Peterson

market thinking you you then Let a where and a of little sizing the about me bit from we're we're how thoughts a start and will opportunity little that it Ewout give of point market about heading of give and bit view. of view and

the terms opportunity In this expanding second inning. we're of met of very that how the one I a and me really I Data that's about that and the it's When it, very I say the think market. rapidly. ESG is stages of ask development think about This usually people meetings in early we

and the in impact is of buy sort what their included investor that the from trying for traditional beyond understand a to investors We're it's this or quotient there had portfolios, investors in the sustainability their finding some side, were side mandate. means demands what going already

to pretty starting to much institutional through And this so filter and investors. now all also is

we our and governments, for services. to are think products also are needs corporates, look etc the ESG services. see we're from and single we issuers, mix make that we and have right right provide of from from there at When portfolio every of divisions trying there We products this, and that opportunities sure know to one and that

We also factors. to an gives we have with ability anchor starting that for us a believe which excellent for environmental the this what as is anchor, do, Trucost an point

in doing also ratings that XX work for we've been over business the governance or foundation with us helps XX there. Our the years

all of also started going we commitment different the up. an it designed last in developing a from quarters you're products to is and we've out the So as the that us, of us and for ground of divisions, this see coming commitment. building in investment shown a We've couple way services these

we S&P very got duplicate a across Global, we've so our approach to So data sophisticated don't efforts.

and foundation us is But we talk Ewout. let over very investing you a early what should And that's think this about to but the general approach, it hand strong to innings. growing in me see the it from it in continuing

Ewout Steenbergen

our of and overall all explained. activities at looking So if just of we we're as look Doug ESG products at divisions our across size the business

Index, ratings products more many XXX that the think Trucost ESG intelligence, evaluations So Index Platts, think Index, Sustainability in Dow and and about new and ESG in are about renewable the energy in scorecards S&P Jones being ESG currently are that under the market developed development.

year reported the for $XX Overall, approximately this million revenues is is for we $XX and of approximately growth of the few of last the XX% million years. whole over revenue year for the approximately ESG, company forecast next outlook

will future. the clearly XX% So this so growth, a company for the driver be growth in

Michael Cho

of talked in give ratings we just essence, think how outside powering squeeze China, China. opportunity more within market on on about on Doug, incremental I establishment mean you business? of should the an mean of about the local China, because one harnessing ratings I the going you the data can I'm the update but call in us framework,

Doug Peterson

one having for Well, initiating we coverage. On covering Global. about you consolidated for of comprehensive China are China, and a first the questions. Michael mentioned effort all, thank appreciate thinking that's of thank organizations this just S&P the entering for us we've as you all it We of and before, we're JPM with

right the intelligence a and service financial out analytical that's data So even of ratings on as on nipping building and heels as markets well. also the heels market I the say could domestic for

a really look is more So becoming we a as than large financial of of market. towards important at market bank a moving that transition capital a this market

bonds very and to sheets three the there's they're now of are opposed financing are bank most actually most banks' the bonds actually issued years know, right balance you As also term, China, short on as in on balance going that is and sheets. of

so all and capital we look be they services. domestic that is more transition And sophisticated markets there opportunities the become the going of when believe S&P are to to onshore as Global at products to is we place think we for this take linked more and establish also that going reformed, businesses globally,

for have a yet. don't you We sizing

across products get that market can we as build right ratings first look S&P at provide and onshore you experience close this intelligence the time we will really for comprehensively you, more in that but are Global, roadmap We the over is the we now, out assured but behind. that be first launched investments in

Doug Peterson

Thank you.

from that progress joining pleased core So me a I'm of let for the had. quarter our investments you the of which pleased with with thank lot in everyone with that again we're strong businesses in all call we our continuing saw today. I'm very demonstrated strong results. our today that

from again the so that be for Trucost benefits in investments has new had, investment, based you following that off some very the anchored had also and as hope I such the a progress and of a we're encouraging products it's back on we'll making the great these the then, just that of everyone that quarter. are services company. China discussion thank everyone much. on summer And see we to we Thank ESG you

Operator

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

you On behalf and for good participating, a you of day. S&P wish Global, we thank

S&P Global (SPGI) 1 Aug 192019 Q2 Earnings call transcript