SPGI - Earnings call transcript Q4 2019

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Operator

Good morning and welcome to S&P Global’s Fourth Quarter and Full Year 2019 Earnings Conference Call. [Operator Instructions] I would like to inform you that this call is being recorded for broadcast. All participants are in a listen only mode. [Operator Instructions]

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

Chip Merritt

Thank us call for Global’s you Chief Ewout you. thank And President Vice joining President CEO earnings and Presenting Steenbergen, Executive Peterson, Officer. fourth call. today on Doug today's are Financial and and quarter S&P for

with news We quarter full issued release a year and fourth our XXXX results earlier.

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are listeners the historical Securities provide statements the our we In XX-Qs, Except this other results filed risks these statements. descriptions future anticipated Reform differ we periodic Litigation I results uncertainties including Commission. statements. U.S. on estimates XX-Ks, remarks and and matters XXXX, direct materially statements expectations in projections, the based conditions current for statements the that may subject contain current economic may to Form to cause contained events. Before actual are with and and and and about of the cautionary begin, Exchange to discussed forward-looking forward-looking cautionary certain Private Securities forward-looking reports in our to regard, from need Any in within teleconference of information, meaning Act such of

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Doug Peterson

$X.X quarter today’s Welcome growth repurchases every review you, Thank returned ASR a XXXX and earnings in Ewout our business. In I'm the a was generated moment. through financial adjusted solid We flow, $X.X increase the excluding and to delivered billion while certain with year We year highlights for to we'll free notable revenue few $X fourth XX% we Chip. and over in next EPS we future invested improvement year. full company results going diluted call. dividends and margin in will cash results reported a growth. days. review growth. year We items, in the share for initiate XX% billion billion X% XXXX,

towards our strides Day with a We products of also number Investor success. new early great initiatives. encouraging We We key advanced targets. on made significantly launched very

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RobecoSAM. ESG our Rating Business also with ESG acquisition the the We capabilities bolstered from of

solid and XXXX strategic XX.X%, shares reduction EPS positioned revenue results. this growth to our outstanding targets slide, we X%, we XXXX, XXXX. X% in achieved initiatives progress in summarize year margin to we're delivered in points improvement On and basis of solid the XXX well of advance a growth. full With our This exceptional financial year,

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our Our revenue solid margin XXXX performance operating of growth. succession adjusted and exceptional extended

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issued reliable demand expect China. and adoption found increase consistently With transparent years. ratings we've for to-date, steadily high meetings, to the in these coming six in we ratings quality, objective, genuine a During

the a and as sector to and light issuers the cross of stakeholder ability its long-term Once evaluations launched world value again, to of analysis quality successfully in six XXXX. expect potential were of discuss quickly and environment optimize governance. natural evaluations and increase important ESG date, adoption we've to entity's ESG and future To Ratings around an relative evaluation. with its social in our been education the ESG we've operate in published is meeting

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the inflows since XXXX. is market full trillion. the $XX billion, end XXX% added up For of than and total year $XXX $X.X year, more AUM billion added our appreciation end AUM bringing

outlook. Now I'd like XXXX shift to our to

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growth be forecast U. GDP growth XXXX global potential by the Turkey, virus. outbreak more Corona expect and China slightly this any impact X.X%. higher Mexico doesn't is expected note the than XXXX into the Please than S., of of in Europe X.X%, of in account Lower the Brazil. take Russia, economists from growth offset that and Our to

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framework. top this are to here aligned some of XXXX, For the initiatives

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

Ewout Steenbergen

the you, call. And to Thank on all welcome Doug. you of

due Let financial professional me start and by allocated corporate increased compensation results. with increased higher Revenue fees. Adjusted XX% our fourth and loss quarter incentive XX%.

was XXXX, as fourth profit and year, Adjusted basis finally, quarter. declined in weighted and to lead the higher adjusted incentive ago, previous assumptions. that outstanding in increase regulations shares unusually increased XX% fourth adjusted year this to quarter altered total XX% reform to in spending, of we margin. $X.XX related know to XX a tax X% low The the to improvement EPS rate XXXX, diluted which we issued expense were the U. and due rate in tech due our our S. of the throughout increase quarter tax the Due share compensation our repurchase in operating our points new to fourth diluted by average achieved programs during investment

number For largest quarter, items. of me this pretax a non-GAAP income highlights adjustments let the to

of with we interest in it X.X $XXX lower debt. quarter, the depth took in higher and interest with lower million rate During advantage billion replaced rates new

corporate, charges expect a was in As annual market in an had result, $XX retire early. savings. intelligence associated million in in date amortization. bonds this million $XX there with in that the to million related premium result $XX fuel million and We restructuring $XX we will estimated

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in recorded XX%. quarter way with ratings with a revenue the This business growth gain of leading every

substantial the first investment on adjusted market indicated we increase which impacted in spending, incurred quarter earnings a profit XXXX its operating margin. As call, intelligence

reported businesses other margin. the profit of adjusted All gains in operating

headcount at of by three our end you see Here business years. the last the

of where outside we sourced centers was most technology important by in in the the previously work contractors. that in was IT creation handled XXXX of One changes India

of resulted XXX $XX this it annual will million approximately that we addition While the estimate employees, savings. in in contribute

of projects We best believe the is growth that capital. funding organic use

advancing During these the multi-year in XXXX. plan earnings made ended million great projects quarter invest twice we $XXX growth. XXXX are fourth organic to additional items to up million these announced strides future fuel in endeavors. Many investing our new in call, of projects million $XXX We've to and $XX

still and leave our data single completed. effort While underway continue impression methodologies from a completed, the to build to out with is been items asterisk incorporate marked in want the with ESG our product and RobecoSAM offerings. don't that work substantial I a have you the to There's

as each spending part now funded by are business. usual efforts business as of these However,

the to SME are During new that listed again, expand XXXX, markets to XXXX, be out. several investments we to in million plan these many $XXX build as in as continue well that invest include of items new projects projects. The in half of in about and begun have will intelligence. product Once invest

capture and and perspective Through our on with. data to alternative corporate of companies SME on not this but uniquely tools financial is to informed a like signals. complement to differentiated risk business do data SAP for only companies, they layering focus methodologies analytical credit foundational a millions statements based with give Our structure private customers

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In the introduce assessments status we across correctly company. container plastics. benchmark agency on or increased price This plastics. recycled reporting for the aligns with petro freight emphasis recycled in price will addition within chemicals, ESG has No

these EBITDA. aimed either of enhancing revenue All investments or are growing at

after reduction estate office, on million infrastructure. York Day, year $XX have million. Plaza at million headquarters original approximately Examples in by XX rate New at Penn estimate real reducing space we York. Water include in that footprint exiting Street our London our achieved X $XXX I'm and It made estate, progress functions, run plan. We was savings our digital of New our towards At to real the based productivity $XXX pleased Investor through improvements investments technology we we and cost have introduced support in three often second significant report plan. year, that

streams in We further centers the and infrastructure require projects these business and with technology combined more the from footprint. digital also execute of of real data future certain anticipate businesses of consolidated along to savings our continued services from to work consolidation centers time select We estate as excellence.

We the the and year cash equivalents. turning $X.X sheet. Now ended balance with to of cash billion

the the and the which acquisition ASR, of the due quarter. During for quarter, first billion the payments, first rating decline new to expect new occur $X in always compensation specialist to payments of we balance a incentive the closing RobecoSAM, ESG this from

Our range. times, our well to increased within X.X leverage targeted adjusted but remains growth

four guidance Free of our system. implementation the new cash improved $X.X XXXX to bit flow, higher This with to collections due certain strong a XX% increased receivable level XXXX to is ratings in excluding associated a order revenue items, billion. than and quarter cash

During the year, million X.X shares million $X.X repurchase returned in dividends. we paid to billion and $XXX

addition, shareholders we’re to XXXX, fuel less than good higher of In working return future quarter to actively and In This equaled XXXX target expected. through free the our growth organic for a XX% of acquisitions flow our reason, because cash fourth flow. capital cash XX% of than was investments. was

open with already XXXX have we days. next million of approximately we’ll program ASR share While new $X a initiate begun purchases $XXX market few our billion in repurchase the January in

in results, Now, in resulted ratings. let from XX.X%. in surge high sourcing. the in margin A revenue. spending, XX% lower starting me and was operating primarily in an for by offset IT turn adjusted yield and issuance in costs grade XX% expenses, adjusted ratings the The compensation increase issuance increase investment quarter gains segment incentive with increased to investment segment due to reported We partially profit

with points bonds transaction margins Transaction intra lower increased Loan by strong XXX to operating partially segments due ratings. fees to offset bank in surged profit by partially adjusted surveillance to delivered entity basis activity, due XX.X%. segments revenue revenue new ratings. loan and rating associated royalties, ratings offset XXXX, For improvement primarily

credit. end XX%, additional of increased ratings the increased growth revenue depicts revenue. The increased X%. CRISIL XX% structured in strongest of CMBS, services decreased increased RMBS and on right markets, financial categories governments structured slide finance other our XX%, chart detail while depicts structured corporate This and by were The and XX%, areas

profit profit Earnings growth, led XX% to quarter. adjusted adjusted segment delivered operating for S&P X% expense and XX.X% margin This Dow segment the growth. Jones adjusted to operating indices, X% an the segment of growth revenue

to points segment full the increased For basis profit margin year, XXX XX.X%. adjusted operating

our in revenue extremely by exchange partially driven decline at options the the offset during volume to strong quarter the index experienced in by the quarter that XXXX. increase derivatives, in activity options quarter we levels equity of assets graded exchange what decreased futures Strong S&P XXXX. and was XX%, linked derivatives fourth from volatility market XX%. was XXX in the complex resulting indicators normalized fixed levels the fourth were more Key at This XX% a decreased of quarter fees. decreased during for of growth volume activity fourth graded compared the CME XX% XX% activity elevated and

the company's XXX intelligence investment active Also roughly ever. divestiture billion projects. from for organic $X.X Market the from intelligence increased of and the half expenses and of primarily excludes delivered of X% revenue, toward first XXXX XX% Research user Adjusted revenue of market XX%. intelligence which growth spending SPIAS market revenue this directed quarter acquisitions, the as desktop was was

adjusted the profit decreased XX.X%. margin decreased As points operating X% segment operating a to and XXX adjusted basis result, segment profit

operating segment XX adjusted the year, full the points basis XX.X%. to profit margin For increased

grew year-over-year adjusted Desktop, adjusted throughout quarter, had see in largest signaled X% profit decline margin profit XXXX fourth margin chart, before. fairly this we the has category operating quarterly the large organically. as you While been steady the was as the on can operating

feeds. growth As timing for contract category we to few past last industry a been The this in lower the industry trends, quarters competitive growth of the impacted growth in and in desktop the has environment also quarter, due and renewals several continued quarter. desktop for data customer category, noted slowing preference the evolving

this to services. the the of with as Once Risk XX% risk services this next expansion don't continue Data solutions greatest we realized until of completed can that providing material believe portion desktop growth market have the and business. benefiting full of RatingsXpress to growth grew generation we out building and our management revenue level intelligence again, from platform platform. of enhancement number feeds reach transitioned addition, we customers quarter. data XX% expand its a In data growth potential feeds

business U. excludes enter revenue from revenue another Platts restricting about and And Rice the which Index certain delivered divestiture conduct business from of S. Revenue now sanctions RigData impacted segment, final Live negatively X% was of acquisitions turning from data the X%. growth of ability timing X% growth, and to our renewals. of countries, the contract in organic and by to

to and iron Global was trading in due fourth The LNG. expenses to particularly productivity GTS basis increased ore volumes profit adjusted mainly to activity full and trading services LNG segment strong revenue operating lower increased increased Adjusted X% The improvements fuel but XX.X%. control. disciplined cost X% oil growth. declined quarter adjusted segment due margin year XX.X%. XXX points operating to profit margin tempered increased

Platts expenses in our revenue Series changing and your the reflects Black strongest such by usage, modeling and table methodology accurately you will the from technology for blue our Beginning this with benefited of product categories to The These pretax to and metals growth recast each the the followed was petroleum as meantime, more XXXX, and help shows launches, in recent be portion in methodology a are In agriculture, March. new XXXX elevating expected X%. XXXX power of we XXXX for have results released LNG, expenses. businesses. gas. quarterly impact

mid Day share we first aspirational pleased digit to to We're growth years. targets organic target of year. for we high the these call single in Investor term medium and of to progress During the this the XXXX, company. to revenue two each fine introduced the morning's May just have targets made investor tune use in We

adjusted growth. businesses During We digit double achieved XXXX, EPS target target. low this all four

through XX% we In cash established operating by we flow levels quarter expected year. of free higher cash achieve delivered of We're XX%. dividends being repurchases targeted each as we XX% ended to margin XXXX, at During we committed to return that share returned least profit XXXX, fourth end up we than adjusted our and flow our XXXX. and the

to XXXX, substantial basis each margins. profit we points progress in the company's businesses XXX made contributing the with improvement operating adjusted an overall of In

the operating the term tightening outlooks range medium margin. We’re two profit for for of businesses adjusted

mid from high to intelligence mid mid high to XXs, market indices high narrowing XXs to and to XXs from We’re XXs.

all full our already met, work some targets continue achievement we of of aspirational Investor targets. While towards aspirational have of to Day our been

investment on projects advanced would functionality enables capabilities considerably embedded business of pipeline robust underway facing with in clients like private and Data year. second customer our Kensho. management search versions in last structured update unstructured are platforms I in in banking, of Next, Omnisearch released additional half every the Kensho’s Omnisearch to select company were you more both of for and and throughout projects. investment the a data. to equity

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uses data sources and machine Entity it linking fraction take learning time a of link errors correct our to entities in employees. without from different to will the the

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than in anticipate for needs has we're we reduced linking and additional and processing XXX,XXX running, XXXX. million capped our time manual data up technology that new by six market XX an months Now hours. more This entities to by

or data end next used any process needs. information Kensho and that and a Codex earlier. has is few will commodity months. project Market price assessment get the user's a is on for process is end the provide determine out there to clients introduced by call close Internally, to Platts optimize to include SEC filings efforts underway. discovery assessments A two the price be can prices. relevant and Examples to select clients conference versions in beta to an ingest document the service transcripts.

an generate value the projects price the equal differentials, underway Kensho. we to movement a are estimate the dynamic creating analytics and offering of present clients Externally, net have spread and offer a platform purchase price insights trading to more trends activity. volumes, interactive of around full key potential We to

achieved believe we be We and projects over much years. have as implement strides other is the to and value next few made generation these great there more

an Now of This amortization million; segment; to increase to to of shows of related to ForEx introduce reflects mid that retention XX.X%; every I million; plans the of like $XXX tax Kensho to by and spot keep $XX.XX guidance. and to This contributions operating million $XXX $XXX interest $XXX $XXX excludes million with which guidance, would our our guidance expense And in our to our business corporate profit current guidance. expense million; XX.X% deal in slide $XX.XX. XXXX $XX amortization XX.X%; deal diluted GAAP million single adjusted related range to please of rate of of allocated slide million XX.X% margin to high EPS, markets $XX mind rates. in of digits revenue depicts million; $XXX

of we In $X.X billion cash range in $XX expect items, certain billion. of excluding capital approximately to $X.X the addition, free and expenditures flow, million

XXXX Our opportunities organic that to investments our an expand revenue year. global economies new also reflects increase programs. expectation continue in This this reflects guidance in productivity guidance planned will and

on as initiatives programs, this we new forward conclusion, product on continue you results progress while positioned deliver XXXX assaults, projects XXXX to delivered in look updating We're launches. and In progress making unfolds. well to to strategic financial solid advance financial We great XXXX. productivity investment our and again solid

to With questions. me that, for your turn the let back Chip over call

Chip Merritt

our Thank you, Ewout. [Operator Instructions] first Operator will now question. take

Operator

you. Thank

from from is Toni question first Stanley. The Morgan Kaplan

open. now is Your line

Toni Kaplan

and telegraphed But in around lot in intelligence on any competitive it understand. a heavy totally in lowered spending it just the Thank your the target business to market intelligence, strategy is for right most that? is investment in why guess be You're market such business thoughts you. way, which just investing margin you're a in XXX. previously, of that was so dollars you've the I

Doug Peterson

we about with all, listening happening our trends the and as in as it's the know you platform Global. as to what is of globally, market technology. what intelligence data one we're needs, data engine of we customers the most an distribution increasingly for business. First important as out in our meet It's it's S&P are is business intelligence understand market, S&P the is when Market of well the and about using ratings platform. Platts platform Global the

utilize. data those have that expertise in We can businesses data and sciences, factories, in data factories we

In platform addition, us for it's for innovation. a

one Global, part As whether of factory and data the projects the it on, working all that know is really that that's heard you you important. of it's S&P we're cross there the projects ESG

business. understand into You time all adding that datasets this we're new the

that. you that's on the So a now, invest. think the the distribution we us, company, revolution We data the right capabilities place need, competitive for very right it's recognize it is But about to when think for we business. going

Toni Kaplan

second question, different talked then going you Kensho, my you have on the initiatives about there. And for

terms determine of getting the Just with making analyzed. looking should in at sort able of know news rating be you're which current that credits more to and specifically, essentially I be efficient being

if there's that sort want when to of just efficiencies ratings that the guidance to for the implemented, that so of and Thank on ratings timing target in any and And hear from you. embedded and is be status specifically?

Ewout Steenbergen

underway. considered many Overall, of those those indicators, initiatives are of revenue to and Kensho They to build whole. half half the at Kensho for you a look efficiencies. company about initiatives into should has as example, credit alternative enhancement respect ratings, in also several of out projects with the to for with respect underway surveillance, the so platforms with respect in RatingsXXX and

company. is We have whole now working across Kensho that the mentioned to you

So value are this all number we we're and with overall with to the ahead able with advantage to and we're taking achieve plan to of we the Clearly, Kensho. flight, businesses the Kensho. we are have are initiatives very original generation in of that with compared where respect pleased

Operator

Next Patnaik question comes Barclays. Manav from from

is line open. Your now

Manav Patnaik

I said question but what that fit for data how I complete all done, of whole ESG to initiative. into is monetization you it being your by does meant like and and the just it first wasn't The to understand incremental the products factory assets? wanted terms in this know the try just new all around

Doug Peterson

really when and other the months cetera. probably discussions from ESG from last investors, over et top and are related investors transition, and are transition which climate the when mind were factors climate the see and hear what be they successful. calls, for as of organizations topics other Davos, you of to think companies six about investor they important you for First all, about investors think

global a about a year a a half take trend, advantage us. of model back and you to that took those that and S&P a put we for ago It business within the So step allow team know future crossed us in all would trends. of place to design as

want elements there to couple I mention. a is And of

we to for own decided First of that very of ESG. all, need high our standards at company, operate we've

the we've TCFD to comes it reporting. when So a E, done

We cetera. strong plastics, that our in the very In have goals, company. how paper, our and S, of then you emissions, the practices board. and for the community, dedicated gas own And about measurable entire think goals chairman know, have the separation we et D&I, for we're at for we as CEO to greenhouse governance, across the have we a

to our we start to has it us in for order company. ESG, approach to credible a in have think own So

needs needs. of and So types issuers, being set a addressing meet that, different asset analytics cetera, meeting that the of we built think the think which of then will needs. governments, we different all those true RobecoSAM more that. of that have And way we of to your owners, that question, includes et cost have data and we're at And the we going products into approach that in solutions of of do unified that's now investors, start order all a to to regulators, is have that a to center, different that can

to As like boards has I it's nine TCFD places still Maybe say the even I've we're actually in setting a more this the other inning are accurate second also the game said rules economic on being in forum. it'd calls, of that why of formulated, be standard we're that game. before in that important think the the like inning the world at

many successful. Just products, launched quite comment. think We've other been finally I which one already have

a and tool start. be all ESG think this evaluations. a and strong you We Trucost S&P mentioned really know, the their off SAM we're is rating As But the own financial to important XXX for area products. on investors. and going we successful think to have We've

Manav Patnaik

I the market doesn't And guess or you intelligence business platform. think until reaccelerate better the then intelligence just about everyone of side probably things, to get transition on market you the know you talked I desktop

in start better? desktops we doing So when could with expect timing where that are on and of terms we that

Doug Peterson

continue to various I going new which is that data. This through are, XXXX. a we're mentioned them adding And through couple have earlier, we weather, of in. XXXX, FDA datasets

addition as We a as to to in the have access dual users like that, offer throughout where datasets have Trucost to continue program But we internal and and program. we RobecoSAM. starting the also year with transition we're the ready

expect year, of we So by a the percentage the large the customers end on will that we of have dual access.

in like with As important just It has transition. IQ It's plugging, want that careful we you know, are to a we to couple functionality really there's very the screening. that the that. things platform make Cap sure of

want we transition. sure of that so we conscious we're as the to continue of And very make the needs this customers with

Operator

the question Next in from Michael is Morgan. queue JP Cho from

open. Your line is now

Michael Cho

follow points to on I that made. want ESG just the you up

and expectations throughout I kind what performance have going was general of ESG what company think XXXX? into Just the of kind the in you

Ewout Steenbergen

the the our our Michael, have growth same data a significant we saw ESG was we reason in time, there from At acquisition provide for the company. us short revenue acquisition that platform methodologies. to ESG to that we The with of the reports. the respect TCFD down SAM in target some them fell we of disclosed across revenue our common a because had initiatives slow bit SAM, common slightly

to we in get initiatives forward new to better to going in down So had businesses slow order again. accelerate place a of the some

to CAGR years. few ESG on committed we're next XX% still our over So revenues the

Michael Cho

us the market go are gears, go certain in market kind could to for market after initiative. touch that if industries China switch subs intelligence Can you of intelligence to just targeting, customers or on looking first? And just there I what on I you're Thanks. are specifically, just just remind you China

Doug Peterson

a Yes, have markets intelligence open in based is the to that market platform we the capital of world. off We other that starting see proposition Chinese are markets in launch China around similar the up.

in on up a trade China, China. in S. that of negotiations In the saw -- recent U. fact, and of progress foreign lot with financial opening the it players we financial was quite encouraging

you the about it’s the so And if needs Mandarin are think language. Chinese market what in in

in with Mandarin bring data offshore the of of sheet, we're building financial addition news. et with providing we and taking statements, relationships data corporate would have providers, et own cetera to actions, data traditional so to types shops, balance to we're China, language certain And cetera of our credit

to Mandarin, in which a out platform the of building will responsive the be we're investors. needs So new

Operator

Jeffries. Mazari from Next question is from Hamza

Your line now open. is

Hamza Mazari

sort in you strategy how of extra for market in you that Doug, opened know you? long-term trade think Do competition for up referenced does if of there? that your maybe I China ratings, change the the you're agreements. Phase first-mover all, its there? for X you, creates dynamic at companies And

Doug Peterson

First it's you. hear back of from all, Hamzah, nice to

open that with the the benefit domestic international different the agencies think a addition have. we rating markets are credit with we many one and more mentioned, in China, other the room going changes that financial message we in that's from that, actually to is broadly, of that presence standards And similar plenty the of So there's to markets positive. for continue opinions very I in as using that overall to will markets, financial having

Hamza Mazari

could my on follow-up XXXX tax when issuance reform, And election out and that November the looking had just about But really guard just were movement. there that investors off know impact reason Ratings are I for? I predict the think business, should or out Anything of here, people is you ask nobody question. for can should And be the your impacted negative? as business, you be caught played and various with positive, scenarios we sort negative how some anything And looking out. positive

Doug Peterson

factors, opportunities. Well, related that M&A all are our know, impact growth, have of external economic largest as on transactions, more It's Those the etc.. rates, businesses factors. is the the you the interest factors our to much foundation fundamental pipeline of less political of

things are the so And we'll that be those watching.

that might we time more be our is be we're on of sort are changes business. to to impact going could there factors political if much that growth would But of the of So for that spending some growth. at now, what sort driving see some us, way be looking right our

time. with The maybe political because bit long the less a the the rates, topics When rates interest people is little of out one a long-term central it's to see in are factor negative interest that is interest I the for stay low around investors one world, of will what's figure I'd banks, to trying which we rates. direction meet is still going mentioned, be

also very And factor is I beyond carefully. watch growth the probably so that one that

Operator

Next is Blair. William from Nicholas from Andrew question

now line open. Your is

Andrew Nicholas

mean that due in First, new Or level there you change you IT a is I Intelligence. just needed Market to a policy? primarily structural guidance was also need perspective? I or curious. believe change on the the for investment medium-term competitive of the just allocation is from

Ewout Steenbergen

independent Andrew, the that technology change from Market aspirational the this is mid-XXs in to targets Intelligence for in our change narrowing allocation.

margins normal of other of you this flat. would if or would see change. of flat independently year, look Intelligence is dilutive with not. other margin the effect direction excluding What the to we this less XXXX, be or more words, in two change allocation some Market made underlying trends, allocation less acquisitions the course anyhow done going have expect in if excluding And methodology we would that you change we have to therefore, the those more one and for more the allocation business So or then expansion; so recent the at year-over-year

to into But making XXXX, and additional also additional mid-XXs. are with for is investments strategic those for that future. target respect so benefits Intelligence, Market of commercial And expect ultimately, we for continue have see obviously, level a these yield of bit impact revenue, the then in you sales Market to that in account we in expand it our margin But expansion margins the significant will will improvements of position, take to aspirational you an projects again terms towards those Intelligence to years.

Andrew Nicholas

one on Platts. then And

I think there. new in talked the plans remarks, you prepared investment your about

is idea to the benchmark business. Your in some accelerate investments

I was topic, us looks typical curve you a for could product adoption what benchmark. a that on hoping So like new remind just

a get in new a expect to Just terms of generally start contributing when sense revenue. benchmark you for trying to

Doug Peterson

true looking energy. some energy benchmark looking an for develop. strong years much to recently a are last classes does of more to But one years while benchmark question four benchmarks. really sector, plastics. beyond new mentioned we've a at lot they're traditional for We types to recycled Hydrogen take looked benchmarks to take had of definitely we've benchmarks, that one start or a either a a for also us addition global there's important from But from asset when classes we over other We've We've back Enerdata wheat. at recently have on or asset that In that a or just launched, is of the hand which Live approach earlier And launched it Yes, we liquidity our trading. seven expertise new Ewout is to benchmark new new you gas reasons, to is just have, class. three the really you're and the have scratch, company Rice just starting knowledge the think natural in don't asset or of years diversify become that us of a a already like buying bought the transition five type rice. to petroleum. looking like and allows that accelerate

Operator

Next Warmington Fargo. question Bill comes from from Wells

Your line is now open.

Bill Warmington

I the the doing a business. competitive your in what other competitors had data differentiate a to on Intelligence, to ask seems particularly So just offering the you're space. Market And That marketplace. wanted like question versus

Doug Peterson

our management You're and ability absolutely data pull data it we us, expertise think of link right, and but the bring for together. to in our as we

to who public being the people of do, of kind of third-party Ratings, it with some data, have cetera. don't data of private have we we're some start the and of it's whether partnerships information, strength But being already that et we it's core also from to we Platts, is it's customer -- from We sources base find position it able access must-have have that the sources. energy data,

this opportunity. I of And this in we how see as capability is kind own we we with they we our linked can future. use to necessary ways their What's competitive data interesting the the as them have data that many really data solutions, with customers for have. So of when meet me an see be need a

Bill Warmington

behind could wanted them. for And margin what's higher question, second for you to target if medium-term talk ask and I the indices about my

Ewout Steenbergen

at the less, look or you Index more the high business, the for if Bill, already we're actual results at XX level.

have margins for we're why range reason with effectively business. Index the narrowed to the respect already that's we to So today the

Operator

from Research Huber is question Huber from Next Partners. Craig

now is open. line Your

Craig Huber

bit is is of be assessments, And run to My traditional you ESG. fee Is it be rate talk how then just question. side surveillance follow-up on more plan just going also, if a of now, Can on what here? large is about and lines, And the fee? upfront I it ratings then Or little the a ESG ESG ratings fee things? an doing going revenues first to pricing you you're on debt like along a including forward for a RobecoSAM? annual right annual the going have question of you will,

Doug Peterson

with be, -- all issuance, that. And that second that meet that something along the some have I'll question you be Yes, them, the pay-type on answer be to launch, important the the starting volume. answer in let is the time. depth there part be Ewout. also will as with preparedness fee will as to across more their at can of as addition a at their we of fee there the management, more that understand me to to at one, fee, well find provide I the readiness at single The we access our one program to But and And with surveillance in will to fee ESG management ESG off off mean, issuer having an model. also model first their then we go We aspects then we're able But company. entire and to maintained hand it's will evaluation have very look of And information over we a annual look is in ESG the to the... factors. Ewout

Ewout Steenbergen

ESG to approximately revenues the important. we other we the ESG acquisition as index XXX, indices were process used strategic With Robeco with data that the the itself these time sources. a own look our revenues, have Sustainability underneath investment $XX company. an because now more you particularly, that not comes ESG lot are. overall is the entity where And way and Jones It the including was from of S&P business. is very a main this series respect at this data it, to Index our as RobecoSAM data The Index, But very is sources come million, is that's well RobecoSAM, Dow source that for of for there with the

commercialize this to able going We're forward.

more an two needs. market ESG opportunity RobecoSAM, you see large very So should to address as us for

First, today secondly, by the to quality the outside details to filled in, need data to X,XXX, the world. need And better corporates of get is in that get to are data based being and much because surface most us the around provides standards. this more on X,XXX the with

see strategic very in ESG should acquisition of future. So that the as help a with we revenues therefore, us our this acceleration

Craig Huber

last And my here. then question

original were you issuance? year On were originally year not a a year materially on side, year that's have a particular better better come us or the what course, debt we can of data, the up for, outlook materially ago and question end what guys realize, issuance worse fourth I you up quarter, just a expecting? for The your derogatory. I'm what was Ratings for you And to versus all, XXXX? or And than the debt ago, with being was worse for did tough difficult question, start one your just global curious, looking what as? is, remind

Doug Peterson

with you the remember back it. don't I of said know we the far year. that But rather get I for what the number precise to we've number. exceeded precise I'd

usual, was Corporates what but debt in issuance thought the was at X% at year. look the were total it you it we quite beginning maybe if XXXX, So the up as mix overall, was, different of was recall, impact reform XX.X%, you corporates financial about had were what way tax had finance stopped were And the XXXX also coming off been issuing. up of that up up. XX%. institutions Public of we than if

bond issuance If synthetic happening bring a basically cash. doing there had to people that when remember, you synthetic issuance was been were

issuance seen in certain were actually it's quite forecast now see the to we've about come to was XXXX, out. a we So in of X%. that where going that flat I XXXX not XXXX lot down factors there were

ended It up it interest activity, But a of capital public combination year. was up X%. and over market there's acquisitions, being low up XX% So finance rebounded. rates, mergers markets last

down Structured finance full the actually XXXX. was was down X% year. It for in

with finance. before, X% lot up was a went that for can quarter. And movements we financial there The you see the were this. that number up year -- gave corporate, of So in full overall Actually, in ended in was at public services, you year, I up XX%. XX%

we year. you if being the of So ended different the beginning expected what those, mix originally the than up at at look

Operator

comes from question BMO from Jeff Silber Markets. Capital Next

Your line is now open.

Jeff Silber

don't what the you're specific give opened this up talking but typically I of terms were you segment kind Ewout, bit other color on guidance, of Can a margins as the well? Intelligence you for in little you door about we margins know when expecting get year. segments for Market more

Ewout Steenbergen

achieve year, realize respect except to this to businesses I Thank to invited this for to expect line, you, question. With Platts. have you statement revenue Jeff, top growth high we that and I all mid- with for answer single-digit

as single-digit all to well should mid-single year. growth more digits the Platts, as as whole, mid- around this about XXXX. be segments, a for But revenue expectation think the high For other company

Jeff Silber

margin And side… on the

Ewout Steenbergen

$XXX operating for those by a in year-over-year. really and, million, see should this Underneath, program you continued overall to saw to also XX.X% expansion self-funding give margin therefore, guidance, segment, XX.X% so but million way a investment don't of increase we from million in the $XXX you a efficiency of from of margins, last productivity up year, initiatives, leverage our XX.X%, net offset the margin programs, expansion. by On of $XX strategic continued programs, range

Jeff Silber

issuance talked the average. that you that other, at curious, have XX-year one to staying volume high-yield of about follow-up, if you at loan the my leverage and mix in when Ratings have margins great total how just from your on all? slide And kind business, does a you where XX slide impact I'm

Doug Peterson

loan doesn't difference that pricing impact repricing the margins. two an the revenue big volume ends that it not up is is actual significant. of lower much new have which between more It But in issuance, being a leverage piece. than Occasionally, on is

Operator

Next George Tong question Goldman is with from Sachs.

Your line open. is now

George Tong

issuance be X%, bond which prior what's to XXXX you discuss total forecast unchanged Can nuances your issuance up any? forecast. if within issuance and your changed updated bond from the the on is categories, You expect

Doug Peterson

that change now, up at on two much been hasn't looking the right forecasts. categories we're issuance There between The they're the way set these.

which we etc. types is maturity at what the forward know, you look As schedules, financial for are coming corporates, of institutions, different

on of provided outlooks growth, expectations growth. you our which on have We we some

and at sector financial talk going happening in to about what see field, look corporate also we what's the investment And acquisitions a take then forward we the banks up institutions, But see X%; And there. X%; finance about up pretty we really mergers a going and active we X%. structured finance, see relatively and we little picked bit and then which to believe activity we And area, flat. we in year banks. be there's public over up last the be

George Tong

expect lift of cadence ramping you half million of a the your do investment what the investment course spend of to Market You're to going Market this from in XXXX? the And $XXX Intelligence? specifically be investment year with investments revenue spending of Intelligence. over kind do think will What you the

Ewout Steenbergen

will quarters being this You the more four equally see year. over divided this

You on quite projects. of recall, each you really half year, see in depends equal. when those ramp-up It's showing spend a the was little for investment a hard This strategic last it it precise initiatives. with answer should up be more the to because it those second benefits year give the year, of probably on bit you a

the Transcript in that of the benefits benefits some think the place. Scribe, some some processes our results. of automation, the current of we for Some about the in of Think have are already about business, technology

initiatives, China that coming the in bit about we later are XXXX. in further the this a and Think revenue little be see in benefits out. the Think will commercial benefit future. in the we really years ESG Some, a initiatives marketplace year the SME expect some about few and to the

initiative. depends it by bit a So

the right course, have way shareholders. pay that in strong all we that economically off investments so ultimately Of comfortable them, will business and company of for our underneath we the are really cases those

Operator

question Cantor from We Fitzgerald. will from final now Foresi Joseph take our

now Your open. line is

Joseph Foresi

mine a play be you answers. two about the can are kidding, how like with I'm six-part question, just brief catalysts figure going and make out. trying the should wondering out I'm I to to future

I determine on give we the of lot that winners be there. going questions can determines see Can some just grab, And working win of opinion big there? you how us then a to to an ESG. gotten You've everyone seems on your as I sense get to what of of sort land how and you mean, opportunity? kind on a who's wanted

Doug Peterson

to pure I've investing this owners inside the is game an that to all the to energy I more need social demand up impact of very within a et at been Yes. looking you which is, portfolios, of climate recently respond span is asset what's that the from the what's coming initiative is what they There meeting cetera. going investor investment to coming transition from to portfolio. impact, necessarily a the can't sort some approach what's of managers tell is Every an And the investors. but to that impact, investments end asset big types with understand owners. become size there's different with

are be it, be size starting winners Market our think to But going Whether going of who the or the the some properties. you think is to who's large. going this, business over going going entire us product we we're a with thinking about what's up that my this place to that's be to of a determine Intelligence time. When is it. within it's way It's Intelligence-type be seeing to assumption consolidation that smaller segment about large survive buying to others in like going here Market a to and already we're take the

going needs. to bought have They're asset products of the types have bought what's products, highest reach. we Trucost global success that responsive and going we somebody who's is But You've going They're quality services. of RobecoSAM. across multiple to create going multiple classes, types be seen to to to quality have highest able

people So that going to we see needs. this as have we're a this. have driving with really good are business to scale multiple And

are really this. winner. to So be global putting and in place the see would we to But we're that those seeing end that up going drive are scale factors the

Joseph Foresi

just And on conversation China. then close finally, the to

You talked big opportunity how as when And for there. impact about starts some political do a of material virus changes to think well? how that be numbers and the the could that aside, you recent about get you to

Ewout Steenbergen

China the for less revenues company than Joe, the overall, X%. are

how the So to be would the scenario, in company the the is is result be situation bigger to for going going future, in this not scheme, whatever play material the impact of the out. fire

Doug Peterson

final just comment. Well, a me let make

and your everyone First for I want on call the being of for questions. to all, thank

are XXXX results the in company. to responsive how And continue to know, are growth. investing markets, we solid day-to-day we're addition the about SME, very had marketplace, people being also you that ESG, etc. excitement invest At we're well. to very in drive able for discipline, we same important As for we in our have pleased you those can time, across to with to the areas we different we And very think driving that China, going. us And report pleased ahead the those also are were that business heard the our be with financial great

in throughout and very we you much. our look for with very forward we're pleased Thank touch XXXX, year. prospects with the to you So keeping

Operator

one will of be will participating, one good for behalf be for A wish The be in That you two On concludes we audio-only Global, we investor.spglobal.com. is replay available of the the maintained S&P and on morning's S&P thank will month. Global's available with A call webcast PDF now presenter a replay for The hours. from version call. website slides this year. audio maintained entire and telephone day. slides of about you for downloading

S&P Global (SPGI) 6 Feb 202019 Q4 Earnings call transcript