S&P Global Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications 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 : Doug, why don't we kick off the conversation talking about the IHS Markit merger, particularly the regulatory approval. So you recently received the U.S. DOJ. Prior to that, you already received the conditional approval from EU. What is really pending from a regulatory approval perspective?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's very helpful color. On the last earnings call, you also raised the revenue and cost synergies as company identified additional projects. Can you give some color about these additional projects?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. We will definitely talk about the ESG a lot more. But maybe just going back, again, the company has a very strong track record of exceeding the amount and pace of cost synergies. So my question there was, do you foresee any risk to the synergy targets that you provided? And similarly, are there incremental opportunities where you see incremental upside or potential upside post the acquisition close?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Yes. And as you said, you have such a strong track record there. On the plans for a catch-up share repurchase post the acquisition close, just wondering if you could provide any color on the size of the buyback and the means of executing it? Is the thought around having an ASR or normal share repurchase? Any color on that front?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. And maybe one more question that I had about the merger and particularly the Market Intelligence platform. You recently rebranded it as CapIQ Pro. And you've done such a great job of rolling out the CapIQ Pro across the entire S&P platform and driven new product innovation, greater synergies. How do you think about rolling out that platform even for IHS Markit? And is there opportunity to do something similar on that front, similar to what you've done on your Ratings business ability to drive margins and efficiency on that front? How do we think about from IHS Markit perspective? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 3:40PM, SPGI.N - S&P Global Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual)

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. And maybe can you also help us understand how easy it is to put all the IHS Markit data, just given the fact that they put all of that together into a data lake, how easy it is to integrate it with the CapIQ Pro's marketplace solutions?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Yes. That's very helpful color, and thanks for sharing that website. This was very helpful. Maybe just a follow-up question there was you talked about how machine-to-machine APIs, even cloud distribution platform, how that's changing the game. I was just wondering if you could build on that further and also talk about your Kensho acquisition, how that positions you for AI machine learning. And how by putting all these data sets together, what kind of insight or is this -- how do we think about this being 1 plus 1 equal to 3 over the midterm? I'm talking about over the next 5 to 7 years.

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great color. That's fantastic. Maybe if we can switch gears and talk about the ESG opportunity, as you mentioned earlier on. You've talked about ESG revenues being roughly $100 million of revenue in this year. Can you just provide some more greater details around where is that revenue coming from? Is it indices, Ratings, the SAM business, Market Intelligence, Platts? Again, any color on those fronts? But also, if you could talk about -- and thanks for bringing up that slide. You've talked about that revenue is almost quadrupling to $380 million by 2025. What's driving that accelerated growth in revenues?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Yes. That's a great segue to my next question I was going to ask. Obviously, this doesn't include IHS Markit contribution. IHS, I think, had mentioned, they expect to generate $70 million in green revenues this year. So how do those assets from IHS Markit, both the resource data, the demand information through transportation data, their climate transition offerings, how does that complement some of the offerings that S&P already has?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. And then maybe just drilling down further. On the Ratings side, you talked about sustainability linked and green bond rating. Can you just talk about how big that opportunity is, again, over the next 5 years, how we should think about just given how much traction those bonds are getting?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Yes. That's great. It just seems like a huge opportunity, and we'll drill into Ratings further. But before we do that, I just had one more question on the ESG front. You talked about ESG indices growing 178%, which is a pretty phenomenal growth profile, but you're still lagging behind maybe the leaders in the space. And so our question was, how do you plan to close the gap on the ESG indices? Or how do you expect this momentum to continue as we see more of the fund flows -- ESG fund flows coming in the U.S.? So any thoughts around that?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great, Doug. It just seems like there's such a huge opportunity there with so much funds flowing into these ESG ETFs and active and passive mutual funds. Switching gears and going back to Ratings. So the question that we get most often from investors is the issuances in -- sorry, 2020, 2021 are trending much higher about the historical trends. Is this the new normal? Or could the issuance normalize to a lower level? Any thoughts about those? Again, I am thinking about over the next 3 years or 5 years.

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's very helpful. And maybe a couple of questions there. As you mentioned, your initial guidance for global issuance is 2%, doesn't obviously include a lot of things like the bank loans. But that also is not the revenue guidance, as you correctly mentioned.

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : There are a number of factors that drive revenue significantly faster than the issuance growth, obviously pricing, nonrecurring revenues. I was just wondering if you could lay out some of those factors and how we should think about the sustainability going into '22 but also, again, over the midterm. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 3:40PM, SPGI.N - S&P Global Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual)

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : Okay. That's -- it sounds like there are so many different drivers to continue to sustain this growth in the Ratings business. And maybe just one more question on the Ratings front. Can you just talk about the China opportunity? You do hear a lot of noise on that market. How are you positioned to take advantage of some of the challenges and opportunities that we see in those markets?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. Maybe just switching gears and talking about the Market Intelligence. We've seen some material acceleration in growth in that business. And we've seen that across the desktop, data management and credit risk solution. So I was just wondering if you could provide some more color on what's driving it? Is it just underlying robust demand environment, expansion of use cases, market share gains? If you could elaborate on any of -- all of those things. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 3:40PM, SPGI.N - S&P Global Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual)

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great. I know we are almost on the top of 30 minutes, but I do want to talk about the product innovation. And we see that, roughly, as I think you mentioned, 1/3 of the growth in Market Intelligence and a strong growth in Platts has really come from new product innovation. And obviously, you talked about a lot of different things going on, but I was just wondering if you had some closing comments around what has driven this pickup in pace of innovation? And how do we see that going forward over the next 3 to 5 years?

Question: Ashish Sabadra - RBC Capital Markets, Research Division - Analyst : That's great color, Doug. Thank you very much. Thanks once again for giving us this opportunity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 3:40PM, SPGI.N - S&P Global Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual)