10-KPeriod: FY2021

S&P Global Inc. Annual Report, Year Ended Dec 31, 2021

Filed February 8, 2022For Securities:SPGI

Summary

S&P Global Inc.'s (SPGI) 2021 10-K report highlights a year of significant revenue and operating profit growth, driven by strong performance across all its reporting segments: Ratings, Market Intelligence, Platts, and Indices. Total revenue increased by 11% to $8.3 billion, with operating profit rising 17% to $4.2 billion, leading to a 29% increase in diluted earnings per share to $12.51. This growth was underpinned by increased transaction and non-transaction revenue in Ratings, expansion in subscription services within Market Intelligence, continued demand for data and insights at Platts, and higher asset-based fees in Indices due to increased AUM in ETFs and mutual funds. The company is on the cusp of a transformative merger with IHS Markit, expected to close in Q1 2022. This strategic move is set to expand S&P Global's data and analytics capabilities significantly. While merger-related costs were incurred in 2021, the company anticipates substantial benefits and synergies. Significant progress has also been made on necessary divestitures to gain regulatory approval for the merger, including agreements to sell the CUSIP Global Services business and the Leveraged Commentary and Data (LCD) business. Looking ahead, S&P Global is focused on integrating IHS Markit, driving growth in key areas like ESG and Energy Transition, enhancing its digital ecosystem, and maintaining a strong focus on human capital management and employee well-being.

Financial Highlights

53 data points
Beta

Revenue

$8.30B

73.7% Gross Margin

Net Income

$3.02B

36.4% Net Margin

EPS (Diluted)

$12.51

Total Assets

$15.03B

Cash & Equivalents

$6.50B

Free Cash Flow

$3.60B

Financial Statements
Beta
Revenue$8.30B
Cost of Revenue$2.18B
Gross Profit$6.12B
SG&A Expenses$1.73B
Operating Expenses$4.09B
Operating Income$4.22B
Interest Expense$119.00M
Net Income$3.02B
EPS (Basic)$12.56
EPS (Diluted)$12.51
Shares Outstanding (Basic)240.80M
Shares Outstanding (Diluted)241.80M

Key Highlights

  • 1Total revenue grew 11% year-over-year to $8.3 billion, driven by strong performance across all four segments.
  • 2Operating profit increased 17% to $4.2 billion, with an operating margin of 51%, reflecting efficient operations and revenue growth.
  • 3Diluted earnings per share (EPS) saw a significant increase of 29% to $12.51.
  • 4The company is on track to complete its merger with IHS Markit in the first quarter of 2022, anticipating substantial strategic benefits and synergies.
  • 5Significant progress was made on divestitures required for merger approval, including agreements for the CUSIP Global Services and Leveraged Commentary and Data (LCD) businesses.
  • 6The company returned $4.3 billion to shareholders through share repurchases ($2.4 billion) and dividends ($1.9 billion) in 2021.
  • 7Focus on ESG and Energy Transition initiatives, with strategic investments and product development in these areas.

Frequently Asked Questions

The primary strategic initiative for S&P Global in 2021 was preparing for and progressing towards the completion of its merger with IHS Markit, which was expected to close in the first quarter of 2022. This involved executing necessary divestitures to secure regulatory approvals and planning for integration to realize anticipated synergies.

All four reporting segments – Ratings, Market Intelligence, Platts, and Indices – experienced revenue growth in 2021. Ratings saw increases in both transaction and non-transaction revenue. Market Intelligence benefited from subscription revenue growth, Platts from strong demand for market data, and Indices from higher asset-based fees due to increased AUM in ETFs and mutual funds.

S&P Global continued its policy of returning capital to shareholders through a combination of regular cash dividends and share repurchases. In 2021, the company returned approximately $4.3 billion to shareholders, consisting of $2.4 billion in share repurchases and $1.9 billion in dividends. The company expects to revisit its dividend policy post-merger.

Key risks identified include those associated with the pending merger with IHS Markit (e.g., regulatory approvals, integration challenges), cybersecurity threats, changes in the legislative and regulatory environment, increased competition, and macroeconomic volatility impacting financial and commodity markets. The company also highlighted risks related to data privacy and the potential for litigation and regulatory proceedings.