S&P Global Inc at RBC Capital Markets Financial Institutions Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Thanks, Doug. I agree, it's very unfortunate. Two more questions that we've received on the topic, I was just wondering if you could address those as well. One of the questions that we get a lot from investors is any potential ripple effect from this geopolitical crisis? Any -- have you seen any impact or slowdown in demand either in Europe, Asia, anywhere internationally?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Yes. That's very helpful. And that was going to be -- that's a great segue to my next question on commodity insight, particularly on the legacy IHS Markit resources business, how do we think about this higher oil prices and potential for higher CapEx going forward? How does that benefit the commodity insight business?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. And actually, that's again a great segue into our next topic that we really want to focus on, is the revenue synergies from the strategic acquisition. So as you mentioned, opportunity to combine these data assets together. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 09, 2022 / 1:00PM, SPGI.N - S&P Global Inc at RBC Capital Markets Financial Institutions Conference (Virtual) But maybe if we want to start off first, just if you can just discuss the opportunity to better monetize the IHS Markit's differentiated and proprietary data. Given the fact that S&P had a much stronger distribution platform as well as AI machine learning capabilities, I was wondering, can you discuss that and provide examples of those?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. That's fantastic. I didn't realize you already have the info data available on Cap IQ Pro, much faster than what we would have expected. That's great.

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's fantastic. Just maybe on the pricing side, is it also -- have you looked at their pricing? And is there opportunity to better price for value in some of the products as you bring their data or their indices, for example, into S&P family of indices? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 09, 2022 / 1:00PM, SPGI.N - S&P Global Inc at RBC Capital Markets Financial Institutions Conference (Virtual)

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's very helpful color. And maybe that also is a great segue into the next topic, ESG and climate opportunity. As you mentioned, ESG indices. But across the company, the numbers that you gave out was $140 million of combined revenue in 2021 and 46% CAGR growth going forward to deliver $600 million by 2025. So that's a really robust growth profile. Maybe I was wondering if you can talk about all the key drivers for this accelerated ESG growth. And how does INFO's acquisition really improve the competitive positioning? Not only does it obviously add incremental revenue, but how does it increase your competitive positioning in the marketplace?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great, Doug. Maybe if I can ask one question, one more follow-up on the ESG. One of the questions that we get from investors is, is there any potential for backlash for ESG, particularly what's happening on the energy side? How do you address that? Does it create actually a better opportunity? Or could there be any near-term backlash?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Against ESG because of the underinvestment in energy and whether ESG -- actually, does it create more opportunity because, with higher energy prices, there's more demand for ESG services...

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Doug, that was very helpful color and a great explanation. Just maybe moving gears and talking about the cost synergies and earnings accretion. So you raised the earnings -- sorry, the cost synergies by 25% to $600 million. I was just wondering when you think about the cost synergies, and that's like slightly over 9% of the combined expense base for the combined company. So how should we think about these synergies flowing through and benefiting the P&L over the next few years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 09, 2022 / 1:00PM, SPGI.N - S&P Global Inc at RBC Capital Markets Financial Institutions Conference (Virtual)

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great, Doug. And maybe that -- I was just going to have one more quick follow-up question on that one. As you mentioned, even on the quarterly earnings call, you'll provide the synergies that you've delivered. But what are the key KPIs that you're tracking internally? And what KPIs will you share with the investment community to track the progress on the integration, both on the revenue side and the cost side?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. That's great. One question that I get from investors is, if you look at the Ratings business, you've improved the margins by 17 points in 6 years, from 2015 to 2021. And a lot of it, or predominantly, that was done by improving efficiency through technology and automation. Is there REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 09, 2022 / 1:00PM, SPGI.N - S&P Global Inc at RBC Capital Markets Financial Institutions Conference (Virtual) a similar opportunity to streamline and really improve the efficiency of INFO's commercial business while better monetizing the data asset? So just streamlining the business, leveraging Cap IQ platform, leveraging Kensho and driving a lot of good margin expansion in that business?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's very helpful color, Doug. And obviously, you have a great execution track record on that front. Maybe I'll ask one more question on earnings before we move into other topics. But the guidance implies 13% to 15% earnings growth on a pro forma basis for 2022. And the company mentioned a potential step-up in earnings growth in '23 and significant earnings accretion in '24. I was just wondering if you can talk about what's driving it? Is it a combination of both the revenue and cost synergies that you've talked about? If you can also address the capital allocation where you're going to buy back $12 billion worth of stock. If you can just provide more color on the step-up in earnings growth in '23 and the massive accretion in '24.

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's, again, very helpful color. And if I can ask just one quick follow-up question on the ASR. Is there -- how do we think about any upside or downside risk to that $12 billion ASR? Is it fair to assume that you have all the cash like available for the $12 billion? And what could potentially drive upside, if any, to that $12 billion ASR?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Okay. No, that's helpful. And then maybe just jumping over to the Ratings business. Obviously, the Ratings -- or sorry, the issuances has been weak in Feb. Having said that, can you just talk about the offsets? Obviously, there's a lot of revenues, which is recurring revenues. You have pricing power in the business. So can you just talk about some of the offsets to the credit issuance headwinds that we are seeing near term?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's, again, very helpful color. And then maybe a quick question on Market Intelligence. We spoke a lot about better monetizing the data and INFO's data already being available. Can you also talk about the opportunity of potentially selling the Cap IQ Pro or your Market Intelligence product into existing IHS Markit customer base?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great, Doug. In the last minute, I was just wondering if you had any closing thoughts. This is very exciting with the strategic merger here and the synergies potential. But I was just wondering if you had any closing thoughts for us.

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Thanks, Doug. Thank you very much...