S&P Global's Strong 2023 Performance and Ambitious 2024 Goals
2024-03-05
S&P Global recently held its fourth quarter and full-year 2023 earnings call, where key individuals such as Doug Peterson, President and CEO, Ewout Steenbergen, CFO, Adam Kansler, President of S&P Global Market Intelligence, and Martina Cheung, President of S&P Global Ratings, shared insights. Investors were able to access the webcast and slides for the earnings conference call on investor.spglobal.com.
During the earnings call, S&P Global provided non-GAAP adjusted financial information to facilitate meaningful comparisons of the company's operating performance between periods. It's worth noting that the Stock Advisor analyst team did not identify S&P Global as one of the 10 best stocks to buy at that time.
S&P Global had a successful year in 2023, with revenue excluding engineering solutions increasing by 8% year over year. The company saw adjusted operating margins expand by nearly 300 basis points in the fourth quarter. Moreover, S&P Global returned $4.4 billion to shareholders through dividends and buybacks, representing over 100% of their adjusted free cash flow. Notably, 2023 marked the 50th consecutive year of S&P Global increasing its cash dividend.
The company excelled in bank loans, structured finance, and high yield, contributing to a strong rebound for the full year. S&P Global achieved its goal of having at least 10% of revenue derived from new or enhanced products annually, known as the Vitality Index, with revenue from vitality products growing by 18% in 2023.
Investing in artificial intelligence (AI) has been a focus for S&P Global to enhance its performance. The company aims to develop new products and services, automate manual processes, amplify internal experts' productivity, and embed AI functionality in existing products. S&P Global launched a new AI page on its website to keep stakeholders informed about its AI initiatives.
S&P Global's proprietary data layer, sourced from all five divisions, serves as a key differentiator and a robust foundation for its AI initiatives. The Kensho layer assists S&P Global in leveraging its proprietary data more effectively by automating preprocessing work for structured and unstructured data.
In the past year, S&P Global published its 12th annual Impact Report, fifth annual TCFD report, and its first-ever Diversity, Equity, and Inclusion Report, all of which have garnered recognition from external organizations.
Looking ahead to 2024, S&P Global has established financial performance goals encompassing revenue growth, adjusted operating margin expansion, adjusted EPS growth, and adjusted free cash flow growth. The company aims to achieve revenue growth through robust performance across all five divisions, maintaining expense discipline, strategic investments, and fostering innovation.
S&P Global anticipates adjusted revenue growth in the range of 5.5% to 7.5% in 2024, with organic revenue growth expected to be between 7% to 9%. The company plans to enhance its adjusted operating margin by at least 100 basis points and targets adjusted EPS in the range of $13.75 to $14. Additionally, S&P Global aims to achieve $600 million of private market solutions revenue by 2026.
In conclusion, S&P Global's fourth quarter and full-year 2023 earnings call covered various topics, including financial performance, strategic investments, AI initiatives, reports published, and the outlook for 2024. The company showcased strong performance in 2023 and has set ambitious goals for the future.