Q3 2023 S&P Global Inc Earnings Call
Good morning, and welcome to SMP Globals third quarter of 2023 earnings conference call I'd like to inform you that this call is being recorded for broadcast all participants are in a listen only mode. We will open the conference to questions and answers after the presentation and instructions will follow at that time to access the web.
Cast and slides go to Investor Dot S P global Dot com.
If you need any additional technical assistance. Please press start zero and I will assist you momentarily I would now like to introduce Mister Mark Grant Senior Vice President of Investor Relations for S&P Global Sir you may begin.
Good morning, and thank you for joining today's S&P global third quarter of 2023 earnings call presenting on today's call or Doug Peterson, President and Chief Executive Officer, and a belt Steenburgen Executive Vice President and Chief Financial Officer.
For the Q&A portion of today's call. We will also be joined by Martina Chung President of SMP Global ratings.
We issued a press release with our results earlier today. In addition, we have posted a supplemental slide deck with additional information on our results and guidance. If you need a copy of the release and financial schedules for the supplemental deck that can be downloaded at investor Dot S. P Global Dot com.
The matters discussed in today's conference call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, including projections estimates and descriptions of future events any such statements are based on current expectations and current economic conditions and are subject to risks and uncertainties that may cause actual results to differ.
Materially from result anticipated in these forward looking statements additional information concerning these risks and uncertainties can be found in our forums 10-K, and 10-Q filed with the U S Securities and Exchange Commission.
In today's earnings release and during the conference call, we're providing non-GAAP adjusted financial information. This information is provided to enable investors to make meaningful comparisons of the companies operating performance between periods and to view the company's business from the same perspective is management. The earnings release contains financial measures calculated in accordance with gap.
That corresponds to the non-GAAP measures were providing and the earnings release on the supplemental deck contained reconciliations of such gap and non-GAAP measures.
I would also like to call your attention to certain European regulations, any investor who has or expects to obtain ownership of 5% or more of SMP global should contact investor relations to better understand the potential impact of this legislation on the investor and the company were aware that we have some media representatives with us on the call. However, this call is intended for <unk>.
Festers and we would ask that questions from the media would be directed to our media relations team, whose contact information can be found in the release.
At this time I would like to turn the call over to Doug Peterson Doug.
Thank you Mark as we look at this quarter's highlights I want to remind you that the financial metrics will be discussing today refer to non-GAAP adjusted metrics unless explicitly noted otherwise we're pleased to report 11% revenue growth in the third quarter, excluding the impact of engineering solutions, we saw acceleration revenue growth in every day.
<unk> in this quarter as.
As we discussed last quarter, we took decisive action to protect margins in the second and third quarters last year and will lapping that impact contributed to her expense growth. This quarter were pleased to see margins expand approximately 100 basis points despite that headwind.
Adjusted EPS increased 10% year over year, and we're raising our adjusted EPS guidance by approximately 10 cents at the mid point to reflect the better than expected results through the third quarter <unk>.
A strong financial results like these come as result of continued innovation execution. So we're excited about the rapid pace of product launches coming from S&P global this quarter.
We will be discussing a few of them on the call, but encourage you to look through the releases available in our online press center to get a better sense of the sheer volume of new products and features we've introduced this quarter.
We've seen acceleration each of the strategic growth area as we've been reporting since our Investor day.
We also saw her vitality index, which 12% of total revenue in the quarter as new products continue to generate value for both customers and shareholders.
We also made progress on her AI initiatives, which I'll touch on briefly today, but we plan to provide a more holistic update on our progress next quarter.
We continue to align our goals with operations against the five strategic pillars, we introduced to the Investor T.
I'm thrilled a soda a team was able to deliver for our customers this quarter.
As we leaned into our customer conversations and continued to provide innovative solutions to the problems that most need solving our customers are increasingly viewing SMP global is a trusted strategic partner.
In the third quarter sales cycles were consistent with the longer cycle. We've seen in the last few quarters. They were encouraged that these conversations with customers are often leading to larger deals.
In times of market volatility uncertainty or change the global markets has learned to count on S. P. Global for differentiated data powerful work flow tools important insights and unrivaled benchmarks.
We're seeing confirmation of our strategic emphasis on private markets as well as sustainability and energy transition as revenue growth accelerated meaningfully in both of those areas this quarter.
As we continue to engage with customers. We are clear indications of long term optimism, despite the near term uncertainty and volatility in the markets.
Our conversations with financial institutions corporates, and others generally revolve around interest rates in the short term with everyone interested in identifying peak interest rates.
Large maturity walls, along with other factors contribute to our optimism about the multiyear growth trajectory for S&P global.
Related to ratings global build issue installed very strong third quarter was 21% growth year over year with credit spreads tightening through the third quarter issuers, who were more comfortable coming to the market they'll refinancing activity continues to drive the majority of issuance.
We also saw better than expected activity in bank loans, particularly around amend and extend transactions, which we expect to continue in the fourth quarter still perhaps not to the same extent. We also saw a relative positions yellows improve again in the third quarter working a continuation of the trend we've seen all year.
Vitality revenues another area of accelerating growth for SMP global this quarter or vitality revenue metric consists of revenue derived from new or enhanced products. These innovative products contributed 12% of revenue in the third quarter and grew a combined 22% year over year, a significant acceleration from the forties.
10% growth last quarter.
You'll notice that the largest contributors toward vitality revenue are unchanged from last quarter.
Well products can and will move out of the vitality index over time as they mature it's encouraging to see growth from these products remained steady and resilient.
We're also encouraged by the early signs of growth in traction among many of the smaller products that will likely scale to be the top contributors in the coming quarters and years, including the trends, we seen private markets for more transparency and valuation and benchmark products I'd.
I'd like to turn to some of those new product launches now.
We're seeing strong cross the visual collaboration driving new ideas with much of that innovation now turning into generally available products in the third quarter. We introduced multiple data sets for mobility Division tour market intelligence marketplace, making crucial vehicle forecast and registration data available via both express feed.
And snowflake.
We also launched the new single unified platform that marks of product integration of both plants and IHS connect.
The new platform is called Plats connect and allows customers access to a comprehensive range of products benchmarks data and insights from one easy to use interface on desktop and mobile.
These two products mobility and marketplace and plats connect also highlight two of our early opportunities to integrate new AI capabilities in the coming months and quarters will be introducing intelligence search another AI powered functionality that we're currently developing and testing within market place and <unk> connect will have more details on that.
As we get closer to launching those new features.
We also introduced entity insights in the third quarter, which brings data from sustainable one to our network and regulatory solutions to power K Y C third party risk management and vendor management within a single workflow tool leveraging data for 27 million global entities.
I also want to provide an update on our development of Cheddite Q as we've shared with you chat I Q as agenda today I product developed jointly between Ken show in a market intelligence team.
During the third quarter, we had a new beta release that we continued to test internally, but this is a step function improvement over her last internal release.
Given our strategic focus I wanted to provide a bit more detail on the acceleration of our sustainability and energy transition products as we expected in the third quarter cut.
Customer needs or evolved away from ESG scores and move towards climate and energy transition. We believe we are uniquely positioned to win in this market well.
Well, we talked to customers, we hear clear trends customers don't just need a set of opaque scores, they're building internal sustainability frameworks and they need high quality raw data.
With true cost we have what we believe to be the most robust and comprehensive climate data set in the world. We also offer detailed sustainability data on 17000 companies, including approximately 3500 to provide robust granular data through our corporate sustainability assessment survey.
Companies are seeking to operationalize the risk management around climate and we have the largest set a real asset level data available with a mission stayed in climate hazard Smith to 1.6 million physical assets.
We also hear consistently from customers that they need help with energy transition, including developing and executing a viable energy transition strategy, we have solutions that cater to customers in different industries, including our automotive value chain carbon accounting solution and the power evaluate or solution for energy transition strategies [noise] within the crucial power.
Utility sector.
We see this customer need across all industries. So this quarter. We also launched the sustainability starter pack. This is a comprehensive solution help companies start from scratch or from wherever they may be as the developed sustainability strategies, we help them assess materiality measure greenhouse gas emissions and develop the reports necessary to.
Comply with disclosure requirements and stakeholder demands.
Customers need help generating things like a T. C F D report and measuring things like greenhouse gas emissions, they need help benchmarking their own progress against peers and they need help managing the transition to renewable energy sources.
We're confident that SMP global is unparalleled in its ability to provide both the breath and the depth of offerings necessary to adequately cover all these areas.
We're continually increasing the data that we make available through express feet and we're pleased to be adding datasets around net zero commitments and biodiversity before year end.
Clearly, we're meeting customers at their point of need and that's showing up in our results.
True cost revenue growth accelerated to 55% year over year energy transition continues to grow up nearly 40% and our total sustainability and energy transition revenue growth accelerated is 36% year over year in the third quarter.
While we're very encouraged by these results we will not rest on our laurels, we remain committed to accelerating our product leadership in this vital area and look forward to many new exciting products to come in future quarters in years.
Of course, our commitment to innovation and customer value also powers or ability to generate value for shareholders.
This is an incredible quarter of accelerating growth. We also continue to demonstrate disciplined around expenses as margin expansion in the third quarter to help keep trailing 12 months margins relatively flat year over year Troy.
Trailing 12 months margins improve sequentially from the second quarter, and we expect margins for the full year to expand more than 100 basis points based on the mid point of our guidance is Eva will explain in more detail.
The economic factors facing the company are largely unchanged as we look to the final few months of 2023 <unk>.
Secular trends continue to serve as strong tailwinds for the company, while cyclical trends can impact different parts of the business in different ways.
Despite increased geopolitical uncertainty and evolving regulatory landscape around things like sustainability and continued uncertainty around the timing of the capital markets recovery S&P global remains committed delivering value in all market conditions.
Turning to the conditions of the debt markets were tightening the range of our expectations for build issuance as we now expect growth of 5% to 7% compared to our prior expectations of 4% to 8%.
As we've discussed previously we introduced the build issuance reporting metric this year as well as a full year forecast to provide context for the issuance assumptions embedded in their ratings revenue guidance.
Build issuance remains the issuance metric most tightly correlated with our transaction revenue and ratings.
Our latest forecasts from the ratings research group now calls for positive market issuance growth for the full year up from last quarter's expectation for a full year decline as.
As a reminder, market issuance can differ materially from build issuance with divergence. This year Jones by declines in unrated dead and sovereign an international public finance, which don't impact build issuance.
And now I'd like to turn the call over to Eva Steenburgen to go through more details around our financial results and outlook <unk>. Thank.
Thank you Duck as a reminder to financial metrics that we'll be discussing today refer to non got adjusted metrics unless explicitly noted otherwise this wasn't exciting court if a SMP global extra salt growth accelerated across all five of our Deficience and revenue and margins both outperformed our internal.
<unk> adjusted earnings per share increased 10% year over year, while reported revenue grew 8%. This actually understates the accomplishments of the team during the third quarter, because excluding engineering solutions and the small <unk> earlier. This year revenue growth wasn't impressive 11% will also expand it <unk>.
Mustard margins by 100 basis points and reduced our fully diluted shutdowns by 4% a year over year as you saw in the press release earlier. This morning, we plan to continue sure counts reduction with the launch of an incremental 1.3 billion dollar accelerated share repurchase program in the coming weeks.
Revenue in the quarter Australian that growth across all Deficience, let's bet outperformance in our ratings deficient, which benefited from elevated issuance activity into high yield and bank loan markets. While the environment remains unpredictable for the debt markets, we saw stronger issuance volume throughout the third quarter than we expected, particularly.
In September.
Adjusted expenses were up 6% year over year multi adjusted operating income increased 10%.
Acceleration is further demonstrated by our strategic growth initiatives sustainability and energy transition revenue grew 36% to $78 million and a quarter driven by strong demanding climate in physical risk products and our energy transition products as duck highlighted earlier, we're fulfilling our customer needs.
For raw data and reporting capabilities around sustainability and energy transition and this is evidenced by the third quarter growth. This acceleration reconfirms, our continued optimists and around to the long term potential of this important part of our growth.
Moving to private market solutions, we saw revenue increase by 18% year over year to $109 million driven by strong growth and market intelligence private market software solutions, including eye level and a return to strong growth and ratings private market revenue as bumped issuance private credit estimate activity.
[noise] both improved in the quarter were also encouraged by the demands we're seeing it now a private market valuation and benchmark offerings.
Vitality revenue, which is the revenue generated by innovations through new or enhance products from across the organization was $369 million in the third quarter, representing a 22% increase compared to prior year importantly, fidelity revenue represented 12% of our total revenue in the quarter.
Making it a third consecutive quarter of improvement in our Fidelity index score.
Now turning to synergies in the third quarter of 20 twenty-three recognize of $149 million of expense savings due to cost synergies [noise], an hour and relax run rate exiting the quarter was $588 million, we expect to complete our cost synergy program by year end with a run rate of approximately 600.
<unk>, we continue to make progress on our revenue synergies as well with $25 million in synergies achieved in the third quarter, and then and your life's run rates of $112 million.
Turning to expense growth, we are pleased to see that our efforts to optimize our portfolio and deliver cost synergies offset most of the year over year expense growth in the third quarter or total expenses increase in less than 6% year over year [noise], though we continue to see some inflationary pressure on compensation expense due to to do.
Size of expense actions, we took last year, the reset of incentive compensation dishy or continued to contribute meaningfully to expense growth, though we do not expect any further headwinds from dish going forward are confident that we continue to strike the appropriate balance between disciplined expense management and investing in our business as evidenced by.
<unk> of new products coming to the market this year and our expectation to live a more than 100 basis points over Justin March an extension for the full year at the midpoint of our guidance arrange.
Now, let's turn to the deficient results market intelligence revenue increased 8% [noise] driven by strong growth and data and advisory solutions and enterprise solutions desktop grew 5% in the third quarter driven by strong subscription growth is ACP Grove continued to outpace of revenue growth, partially offset by multiple.
Softness and one time seals renewal rates continue to remain strong and the myths too high nineties range data and advisory solutions and enterprise solutions each group, a 9% in the quarter benefiting from double digit growth and subscription based offerings credit and risk solutions continues to see strong new sales for ratings.
Express and ratings direct products as well as continued double digit growth and credit analytics adjustments expenses increased 9% year over year [noise], primarily due to compensation expense operating profit increased 6% and you're operating margin decreased 60 basis points to 33.3 per cent on the trading.
12th month basis, [noise] margins improved 140 basis points.
As we progress through the fourth quarter, we expect continued acceleration in revenue growth as we move into the most favourable comparison quarter 40 year. Furthermore, we see the business continuing to benefit from the launch of new products and monetization of cross sell referrals as part of the deficient overall revenue synergy program as a result.
We're tightening our full year guidance for revenue growth by 100 basis points to a range of 6.5% to 7.5%, while reaffirming our food year margin outlook.
Now turning to ratings in the third quarter, we shall continue to improvements in issuance activity, particularly due to refinancing in a bank loan in high yield markets revenue increased 20% year over year, well above our internal expectations. However Grove was helped by a 90 million dollar cumulative catch up for customers cell.
Reported commercial paper issuance in known transaction revenue, which primarily benefits. It's structured finance, excluding this impact ratings, who would have grown approximately 17% in the third quarter transaction revenue grew 34% in the third quarter, driven primarily by growth in bank loan in high yield issuance.
Known transaction revenue increased 13%, primarily due to an increase in annual fees, which includes to catch up revenue I mentioned previously as well as growth in ratings evaluation surface activity and gristle, excluding the impact of the catch up revenue known transaction revenue would have grown approximately 8%.
Just that expenses increased 18% [noise], primarily due to to write down of incentive compensation expense in the year ago period. This resulted in a 22 per cent increase in operating profit and a 70 basis points increase in operating margin to 56.6% on the training 12 month basis margins are still.
Impacted by the relatively low margins in the fourth quarter of last year.
As Doug mentioned were tightening are are built issuance growth assumption for 2023 to 5% to 7%. This reflects the outperformance we saw in the third quarter, but also reflects our slightly lower expectation for investment grade issuance in the fourth quarter relative to our prior forecast, while we expect continued growth and.
<unk> Transection, we're still she had twins, an issue or credit ratings revenue as fewer new issuers come through the market. As a result, we're increasing ratings revenue guidance range by 100 basis points now expecting growth of 6% to 8% for the full year and reiterating our margin guidance.
And now turning to commodity insights revenue growth increased 11% following a second consecutive quarter of double digit growth in both price assessments and energy and resources data and insights upstream data and insights increased approximately 2% year over year [noise] benefiting from better than expected demand for both content.
And software as well slightly improved retention rates. The business line continues to prioritize growth and its subscription base price assessments and energy and resources data and insights group, 12% and 10% respectively growth was driven by continued strength in our benchmark data and insights products.
We'll also continue to see strong commercial momentum in our subscription offerings for both business lines.
Advisory and transactional surfaces revenue grew thirty-three per cent [noise] driven by strong trading volumes across all sectors and global trading surfaces and strong performance and advisory revenue in the quarter. The business line continues to benefit from market racing volumes, but we're also seeing positive results in key areas of strategic investment.
Including energy transition adjusted expenses increased 6% operating profit for commodity insights increased 17% and you're operating margin improved 260 basis points to 48.4% [noise] trailing 12 month margins improved 240 basis points.
We continue to seek commodity insights benefits from strong secular trends around energy transition and sustainability and demand for benchmarks data and insights full.
Following discord, a strong performance or erasing the low end and tightening commodity insights overall revenue guidance range [noise] now expecting growth of eight and a half two 9.5% for the full year, there's no change to our margin guidance.
In our mobility deficient revenue increased 10% year over year. The team continues to execute well with the third consecutive quarter of double digit growth in the dealer segment and continued growth in new business in the manufacturing and financials and other segments dealer Avenue increased 13% year over year [noise] different by the.
<unk> benefit of price realization within the last year, and new store growth, particularly in car fixed for life and used car subscription products as well as the addition of market skin manufacturing grew 4% year over year [noise] driven by elevated recall activity and continued strength in marketing solutions.
Financials, and other increased 9% as the business line continues to see healthy underwriting for use in a favorable pricing environment similar to last quarter adjusted expenses increased 10% [noise] driven primarily by increased incentive compensation expense, but also due to the inorganic contribution to expenses from the markets can X.
Position. This resulted in a 10% increase and adjusted operating profits [noise] and 20 basis points old operating margin contraction year over year [noise] trailing 12th month margins have contracted 100 basis points.
We expect continued strong growth and used car subscription products as we progress through the fourth quarter. We also expect mobility to continue to benefit from dealerships in Oems increasing get incentive spent on new vehicles as affordability is hampered by rising rates as a result, we're a narrowing our guidance for revenue growth.
To arrange of 9% to 10% for the full year [noise], there's no change to our margin guidance.
Now turning to S&P Dow Jones indices revenue increased 6%, primarily due to gains in exchange traded to refer to <unk> as it linked vies, we're very pleased to see acid link fees return to positive revenue growth in the third quarter revenues were up 4% year over year [noise] driven by higher E. T F. A U N [noise], which <unk>.
Benefits from both markets appreciation and net inflows [noise], but it was partially offset by mix shift into lower priced products [noise] continuing the pattern from last quarter exchange rate of to retrofit folium increased 18% [noise], primarily driven by in approximately 20 per cent increase in S. P 500 index options fall you.
Data and custom subscriptions increased 2% year over year [noise] driven by continued strength in end of day contract growth.
During the quarter expenses increased 9% year over year [noise] with the majority of the increased driven by to write down of incentive compensation and the year ago period.
Rating profit and indices increased 5% and you're operating margin decreased 90 basis points to 69.4% [noise] trailing 12th month margins have contracted 80 basis points [noise], there's no change to our revenue outlook for indices. However, as a result of the continued costs discipline and outperformance year to date [noise].
We're increasing our margin guidance for the division to a range of 68% to 69% for the full year.
Now, let's move to the latest views from our economist or forecasting global GDP growth of 3.1% and 20 twenty-three while outlooks vary somewhat by region are economists are forecasting periods of subdued global growth fueled by higher for longer rates with a soft landing base case assumption is she.
Move through the first half of next year.
We continue to expect inflation to remain above the targets, Rachel central banks and energy commodity prices, such it's crude oil to remain above the historical efforts just as well for the full year, we assume Brent groups will efforts approximately $84 per barrel slightly higher than our last estimate as to.
Expect Brent crude to average $88 in the fourth quarter.
Now, let's turn to our guidance disliked represents our got guidance for headline metrics.
Adjusted guidance for the company reflects the results through the third quarter as well as our most recent views on the macro economic environment and market conditions were narrowing our expectations for total revenue growth to arrange a 4.5% to 5.5% for the full year [noise] to reflect the changes discussed earlier.
[noise], an hour deficient or revenue outlook. Furthermore, we're maintaining our operating profit margin guidance of 45.5% to 46.5% with the expectation that will achieve full year margins close to the midpoint of the range.
We have provided the granular guidance on corporate unallocated expense do related amortization interest expense and texts right into supplemental deck posted it to our I R. Site. This includes a 50 basis point reduction in our justice effective tax rates to arrange of 20 and a half 221.5%.
As a result of this quarter strong performance and our expectations for the remainder of the year, we're increasing and tightening or a full year adjusted diluted EPS guidance to arrange of $12.50 to $12.60.
The final slights indistinct illustrate our revenue and margin guidance by deficient, reflecting the dry first that I mentioned previously.
In conclusion, our business has demonstrated exceptional growth across deficiency disorder [noise], while we continue diminish expenses prudently. Furthermore, I'm pleased with the progress being made across our cost synergy initiatives and growth across revenue synergies as we see more and more new products coming through the market [noise] that would have been impossible.
Without the merger that teams have done a truly excellent job executing on our key strategic initiatives, while still driving profitable growth across all deficiency disorder, and we look forward to delivering a strong finish [noise] 220, twenty-three and with that I would like to invite Martina Chung president of SMP global ratings and.
Executive lead for sustainable one to join Us and it will turn to call back over to Mark for your questions.
Thank you about for those on the line. If you would like to ask a question. Please press star one and record your name to cancel or withdraw your question simply press star too.
Participants will be limited to one question in order to allow time for others. During today's Q&A session. Operator will now take our first question.
Thank you. Our first question comes from Ashish <unk> with RBC capital markets. Your line is open.
Thanks for taking my question really strong bond issuance momentum in September of 35 per cent there was comment around ITV potentially weak in the fourth quarter of like just wondering if you can comment on the strength that he saw in higher than bank loans in the third quarter.
The rest of the year and also if you can talk about any any ship color on the firewall and he shut bite line quickly for thanks.
I see thank you very much for the question. It's Martini here, Yeah, very pleased with that with keeps Q3 overall as it and <unk> sat without the 21% and I'm very very strong September in high heels. We were very pleased to see it was about 150 per cent out.
Growth in issuance over all your ear and of course, you're in high yield year to date is up about 50 per cent rated insurance in the markets. We see strong we find activity there in Q3 and sat and sat looking to see more of that as we go forward certainly into its next year, It's Keith <unk>.
Marked I think uhm and notable point in terms of the issue is willing to come back and have the market for high yield sat and then in bank loans. You know like we said before we didn't have her own consumption from bank loan volume for this year overall, while we saw at an increase in Q3 year over year was still down year over year year in case in.
To an issue and there we saw a lot of some refinancing interesting me I'm very strong trying to hear that we saw in Q3 and are monitoring closely going forward is that a lot of the men to extend activity. Our amendment extend that to the router in in the bank and states and upset that's been a boost in that area from an insurance standpoint.
For 24, obviously, we're we're not commenting yet for 24 will certainly get more on that in in February but you know the factors that we were watching closely refinancing walls are very healthy or laughed at me to report on refinancing showed the five your total dropped about 11% and between now and <unk>.
26, we see about eight trillion in refinancing so that's something that we we watch closely and and that's a very robust close in that area. But we also are you looking at unusual factor macroeconomic factors certainly heightened geopolitical uncertainty.
M&A has not been grace this year as that as we've seen it's been down by quite a bit. This year. So we're looking to see that come back in next year as well and just the other point that I would make on as we're looking ahead <unk> in in the next couple of quarters is that C. P balance is our our commercial.
Pay per balances are quite high so that could at lead to some issue in that if we see corporate <unk> transitioning from C. P. T to fixed income and and we've commented in the past that we continue to see corporate cash balance is <unk> at pre pandemic level, which we think will continue to debate.
<unk>.
Thank you. Our next question comes from Monothelite Nyack with Barkley Your line is open.
Thank you good morning, I just wanted to focus on the end my margins if I could I mean, I understand you know trailing 12 month, it's up but you know just the low 30th how should we think about that going forward. You know I would think that the synergies a combination that there should be a lot of upside there, but you know, perhaps just a lower relative.
Go with the maybe it's an investment area, but just any thoughts on unit cost control and margin improvement, they're going forward would be helpful.
Good morning, Manav a couple of comments on this first if we look back at last year, we took very decisive actions in terms of pulling back expenses when did margaret's earns more south in the second and the third quarter in several areas among which also incentive compensation. So we have some.
Difficult comes for for this year, having set that number two point number two we acknowledged at M. I can do better with margins and we're seeing several opportunities to expand margins as we have also guidance for the for the poo here and implicitly for the fourth quarter. So that brings me to my my third point is that'd be <unk>.
<unk> March actually to improve significantly beginning with the next quarter due to the sheer issue compare but also due to several management actions that we're putting in place, including tight management will head count and other expenses, while we still continue to invest in growth and other strategic initiatives.
[laughter].
Thanks Manav.
Thank you. Our next question comes from Tony Kathline with Morgan Stanley. Your line is open.
Thanks, very much uhm, it's French for Martina Your belt issuance was markedly ahead of our industry data during the quarter and so I was hoping you could discuss if you've seen any notable share gains in particular ratings categories. This year and just any color around around share gains. Thanks.
I'm Tony for the question I I gave a couple of comments on this certainly we would look at the differences between Mark an issue in San Embellishments 19, Doug any of that cover that that routinely in terms of that how to assess the outperformance specifically for <unk>.
Data and T. Three was that with strong for a number of reasons sorry, you know first day, it's a bit of a next question. So more high yield more a bank loan less frequent issuer compared year over year, which is which is just a function of when the high yield an average known issue would cap the market.
I would also say we're extremely pleased with the progress and momentum that we have the number of off the classes that you know when we talked he lost here at Investor Day, We said, we were making investments and structured finance, we were making investments in infrastructure. We had acquire jazz this very shades of green and making enough in N F. P O the weight seem really <unk>.
<unk> perform and <unk> and all of those areas, which we had tagged and and very very pleased to see those results.
Thanks, Tony.
Thank you. Our next question comes from five that all V with Deutsche Bank. Your line is open.
Yes, hi, Thank you. Good morning email would have wanted to follow up on your comments around expenses can you help us think too expensive in the fourth quarter and more importantly, as we look ahead to 2024, yeah. That's almost the now that you're at the end of the road in terms of.
Oh Jeez, how should we think about expensive in 2024, just generally across the desert.
There is of course, good morning, <unk> first of all I would like to comment that if we think about expenses. We have a very full of telecom in 2022. So I moved around a lot in decor does last year due to the good reason that he pulled back very hard and very on top of <unk>.
<unk> management at when we had the difficult markets lossy are dishy or actually our twins are far more stable. So year over year. There is a lot of noise, but I think this year actually from a Patrick perspective looks much much better I think if you look at corrected the expenses actually and if you take out.
Engineering solutions, we are having expense growth that is below rubbing you grow so where she nice healthy margin expensive expense margin expansion, if you're correct for no shame items, particularly for engineering solutions, we're very happy to see how expenses of margins have developed <unk>.
<unk>, so very nice margin expansion, there as well as a rethink about incentive compensation swing year over year. If you would correct for that actually we're looking at quite modest expense growth in ray thinks mobility and indecision as well for the full year, we're expecting <unk>.
Full year of 2023 expense grow in the low single digit level. So implicitly. If you then would look at the fourth quarter expenses should be down in the low single digit level in order to get the two does the overall guidance range.
Mmm Thanks <unk>.
Thank you. Our next question comes from Alex Kramlich UBS. Your line is open.
Yes, good morning, just coming back to the market intelligence discussion from early on it's it's a question to ask a couple of times since you've done this deal, but part of our thesis on on the I just market acquisition was that that's a business on the market financial sites that had been cobbled together by a <unk> physician is over over many many many years.
And you know I think we're kind of hoping that you know you'll get in there with your essence peak global viewpoint, and say like what businesses makes sense, what do not and maybe make this a leaner and meaner machine. So just wondering to what degree that's an effort that you guys are focused on right now and maybe any any anything that you've seen way.
Well, you're echoed ads that there may be some some things to do you wanted that does this could still look a little bit different in the future or if you're very happy with the business portfolio today. Thank you.
Alex This is Doug and thank you for the question and let me just take a step back to O for one second to a higher level about the integration in the merger overall, we're thrilled with the progress and you've seen that today with some of the new product launches that we described which are bringing it together information data research from across the portfolio and within market Intel.
Urgence, we have the same kind of integration going on as you know we always looked at the integration of the integration we realized that <unk> had done a lot of acquisitions had grown a lot of products and one of the opportunities is to continue to consolidate those and put those together and we see a lot of progress. There. This is something you should hold us too and watches.
How we're going to continue to bring together the areas as you know within a market intelligence, we've got a lot of opportunities to attack new markets. As an example, corporates of financial services that I just mark it truly was focused on financial services a lot of their products are very attractive to corporate we're finding a lot of opportunities.
As you'll hear us talk about and you know related to sustainability and uhm and private markets. So we look at this opportunity to continue to consolidate the businesses internally, which is gonna bring upside from an expense point of view.
And we're also gonna be investing for growth, especially in areas like sustainability private markets and then expanding areas like our reference pricing, which can be used in so many different ways, but your thesis is right. We're going to continue to consolidate and we will also look very carefully at the overall portfolio.
[laughter].
Thank you. Our next question comes from Andros Diner men with J P. Morgan Your line is open.
Hey, about it's Andrew could you just tell us how M&A revenues in dollars contributed to M. I mobility ratings in overall it in the third quarter.
Of course, Andrew and I I hadn't expected you to ask about organic constant currency revenue. So let me first give that give that number <unk>, 10.4% for the quarter specifically for market intelligence seven for ratings 18.5.
Mobility 8.2 commodities 10.9, <unk> 5.8 in terms of adjustments with respect to acquisitions. It was 3.8 million of correction for markets intelligence given the acquisitions, we have done there and for more.
<unk> 5.6 million and then they'll watch the correction for engineering solutions from last year of $96 million. So if you combine that with your effects impact, which you can find it in the supplemental deck, you would come to that or get a constant currency growth of 10.4 and as you want.
<unk> are very much in agreement that that is a very healthy basis to look at the real performance of the Deficience.
Thanks, Andrew.
Thank you. Our next question comes from <unk> with BMO capital markets. Your line is open.
Thanks, So much so your investor day, with a little less than a year ago and I'm. Just curious can we just compare how you felt about some of the businesses then compared to how you feel about them now anything better or worse compared to that time period.
Hi, Jeff This is Doug well, let me take a step back again and if you recall, we had had our investor day. It was one year ago almost as on December 1st 2022 at that time, we laid out our new vision power in global markets and the five pillars that we use to manage the business as well as allocate capital at.
That time, we put in place longer term 25, 26 targets for revenue growth and for margins, where well on track for all of those and we also laid out the time, some some really interesting and for us ambitious targets for new products and new services and we also feel really confident about what we're saying we.
Feel like we we targeted and have identified the most important secular trends and market trends and there were growing in that direction theirs excellent reception for that so one year in almost one year into those.
And to those targets, we're very confident about achieving them and we're really excited about our prospects.
Thanks, Jeff.
Thank you. Our next question comes from Scott Wurtzel with Wolf Research. Your line is open.
Hey, Good morning, guys, just one for Martina would love to hear just your thoughts a little bit more on some of the performance and ratings in the context of the private credit market and then maybe also you know some of your thoughts on where you think the private credit market is heading relative to public that markets and how the company can further plan that's <unk>. Thank you.
Yeah, Hi, Scott. Thanks, so much for the question you know just reflecting on the prior question is why we when we when we did the I R. A day I said that 2.1 is that the private markets, we're not going away in the sense that Saturday, we're going to continue to grow and the second is that we saw that as an opportunity in both things has that I've played out as expected. This.
We're very pleased with our overall performance from a writing standpoint in the private markets. It comes in the form of a couple of areas. So increased demand for fund rating Saturday, it's been a real healthy Ah pipeline lot of dialogue out with with the the sponsors fat and.
<unk> and fund managers, we've also seen quite a bit of demand on the structure credit front, which we had highlighted as a key trend that we we thought we would see and that has certainly played out does here and and and as we see the the overall AUN an allocation city off the cloth increase that we're very well positioned we were out in the market.
With credit estimate.
Portfolio assessment, <unk> et cetera, without writing team and then having really really great dialogue with that with a market participant so very pleased from that from writing some point.
Thanks, Scott and.
Welcome to the call.
Thank you. Our next question comes from Andrew Nicholas with William Blair. Your line is open.
Hi, Good morning, Thanks for taking my question a lot of really good color on new product development fatality indexes is ticking higher growth. There's good I'm just curious.
And I don't know if this is one that you can quantify but just how much of that is a result of investments and product development on the journey I side or is that something that can create kind of a new leg of accelerated growth as you continue to kind of harvest your investments there. Thank you.
Thank you Andrew and we're very happy that you're recognizing the level of innovation the level of entrepreneurship the level of new product development within the company you were very happy and pleased around with that if you think about the background of this this is coming from first of all the merger the merger.
It gives us a lot of benefits in combining products feature datasets platforms capabilities and that is really driving a part of it second part of it is really the investments, we're making strategic growth initiatives and we're really pleased with what we are seeing and sustainability energy transition private markets and <unk>.
<unk> full out of that but are also very <unk>, you see growth in areas and industries like the <unk>, we launched something that is cold more the credits fix we have current listings and mobility in any other area, so generally investment and growth initiatives.
Are really starting to pay off and that is ultimately dentals are showing up and to fidelity index <unk> something that just may be unique as a metric and weird as far as we know the only company and our industry publishing dish, but it isn't clear indication of innovation that we would like to publish with respect to AI in January.
I, it's powering many of the products that we are having but it is more embedded I wouldn't say the new really <unk> features that it is really in the number so far because most of those products are still under development and we will get back to you. Once we are really at the production grade level kind of offering that we can.
Bring to our customers. So I think it's a little bit too early for the impact of January I, but more to call them that over the next few quarters.
Thanks, Andrew.
Thank you. Our next question comes from Georgetown with Goldman Sachs. Your line is open.
Alright. Thanks, Good morning, you narrowed the guidance for revenue growth and market intelligence with the mid point unchanged at seven per cent does that suggest stabilizing trends in your sustainability and energy transition business and how our broader client budget and spending trends in the segment performing.
Generally Ah George this is coming from multiple drivers within market intelligence no. The only from sustainability and energy to the transition. So first of all the core business of strong wishy healthy growth, we see a good sales momentum we see that the a C V.
The book is really growing a little bit faster than actually the revenue. We are reporting for example in desktop and as you know a C fee as an early indicator of future revenues. So we're ready really police by by death also the revenue synergies are becoming more meaningful at this moment, so that really helps to contribute growth.
Capital markets for you I'm sure stabilizing we don't see a lot of pick up all the M&A, yet, but last year. It was really a headwind and that <unk> is going away and then also the columns become more E. C. For example from an ethics perspective, and then you arrived sustainability and several other factors drive.
He are the growth is as well. So we are actually really bullshit day for about the outlook for markets intelligence growth in the fourth quarter and implicitly what you're seeing in our guidance ranges that we would expect fraud or acceleration of the growth of the top line of market intelligence in the next quarter.
Thanks George.
Thank you. Our next question comes from Craig Huber with Huber Research Partners. Your line is open.
Yes, hi, there could you just update us, please and where you're sitting at right now for the synergies for IHS with the cost and the revenue synergy with that run radius now or a year and where you aspire to be versus where your original expectations. Thank you.
Alright, <unk> <unk>. Good morning, if you think about the <unk>, we have <unk> Ah twice over the last superior to issue a she know so the 600 million is the targets that were aiming for we're almost done effectively long there are a few more projects that.
Will be finalized <unk> that just just purely timing of some of those projects and then we will be able to declare that hits. The 600 million and then we're going to talk about <unk> any more from that point onwards, because <unk> are also related to operational integration and we are more or less.
Running the company now is a fool the combined company, we're not talking about one part where should the other part anymore. So it's good to close off cost synergies and really think about the company is one company going going forward that doesn't mean that the wheel stopped with efficiency and productivity programs. Obviously, we have a track record to always look for new <unk>.
<unk> and we will get back to you at that point in time with new updates.
From a <unk> perspective, we actually like the progress that we have made during the third quarter, it's quite a big steps to 112 million old run re forgetting now close to one third of the overall target. We have always that that is a five year trajectory to get through 350 million more focus in the.
First part on cross shell most of what you see now reported the revenue synergies, which calling from cross-sell buffet.
Plus we have these new products that are being launched in those new products will help with the next phase of revenue synergy delivery. So we feel we're right on track, we're really on the right path to deliver on the 350 million. So we feel very good about it.
Thanks, Craig.
Thank you. Our next question comes from Seth Webber with Wells Fargo. Your line is open.
Alright. Thanks, Good morning, I just wanted to ask you about the Reacceleration and the sustainability and energy transition business. You know last quarter, you talked about some uncertainty with the regulatory landscape and political climate et cetera. I mean can you just frame you know <unk>.
The number of <unk> seemed to be back on track here has anything really changed or is it just more adoption of new products or our customers just.
Getting more used to the new normal or maybe just any perspective on that thank you.
<unk>, that's Martina I can I can take that question, yeah, very pleased with the the key treatments old. So we saw that 55 per cent growth and not in true confident about 37% in C. I, but the growth was actually across all divisions can be selling clothes into the core climate and and sustainability and disease for example.
As in Peter Jones, and really strong demand for Adam ability energy transition products that as well is that the F. P O as in in ratings, so really great progress on momentum across the board look I think the key thing here and and and we've been saying this for quite some time firstly, the the longterm drivers and the needs in this big.
Have not changed notwithstanding some of the <unk> minor slowdown that that we may have seen in the past year for various different reasons customers corporations still need to look at operation risking their supply chains, they still need to report against their and that's your transition plans if they're in exposed in any way to you or if they have to report.
Sure it's against some pretty compensated regulation sat there for example, we still have banks you were looking at financed emissions and looking to the play capital into sustainability and we have out sedona as an asset managers, who are obviously either looking for alpha looking to allocate to the off the topic. So the fundamentals haven't changed we believe we have the <unk>.
<unk>, most comprehensive and deep offerings in this area across all of our businesses commodity insights as a leader in in the energy transition analytics that an advisory for example, but one of the other things that I would say is and this is just what's so exciting to me around sustainability within merger, we are launching products now, bringing together somebody.
The most unique and fantastic I P across the division instead of a real asset data that we have launched brings together data from ability commodity insights market intelligence and sustainable one and it's gonna be a real powerhouse in that area going for it as as we see more and more needs to hurt much more specific emissions transition biodiverse.
City in nature data at the wheel at that level. So that's just one example, super excited that that going forward and I'm very pleased with that with Keith <unk>. Thanks for the question. Thanks F.
Thank you. Our next question comes from Oh, and laugh with Oppenheimer. Your line is open.
Good morning, and thank you for taking my question.
Could you please add more color on the strength in your <unk> in price of market and also <unk>.
<unk>, it's just demand coming from I mean did you take chairs from your competitor all your product can automate the process and replaced and <unk>. Thank you.
<unk> and this is Douglas let me take that let me start by taking a step back and talking about what we're seeing is this really interesting and and and very rapid transformation of the private markets. If you go back 25, 30 years ago private markets was just private equity, whose L. B OS as private equity, but over the last 25 years and it's accelerated.
<unk> the last three or four is a many many different asset classes many different strategies on the asset side and on the Investor side, you'll also see a whole diversification of the types of investors that have gone into private markets and private credit, which started obviously with pension funds and insurance companies endowment and add to that mail private well.
<unk> individuals even so you you see a completely different need for data analytics across those areas and as an example, this is a lot of this is brand new volume, it's not necessarily you're taking market share from anybody you're finding new applications to bring to the market to provide the information both to the G. P. S.
And the L PS, but also to.
<unk> now even and investors at a at a different level of the private market investors and individual investors. So we see that the kinds of tools that we're bringing for instance, the eye level software, which you mentioned this provides a data service. It provides transparency to the markets. It gives you more frequent information about the portfolio then you might see from from what.
It was coming directly from the G. P. S themselves. We also have products, which we believe are gonna be applied in the future from our DVA area, which is includes information about pricing. It brings a whole new level of transparency and timeliness to being able to provide pricing and information about the portfolios, we know that <unk>.
<unk>, especially from some of those sophisticated institutional investors they want to look across their portfolios and have mark to market look at concentration. So you want to look at it limits they want to manage their portfolios and the way that they need much more granular data in the area. So we think this is going to be one of our most interesting highest growth areas and so you asked where it's coming from.
It's new demand, it's new opportunities and its ways, we can bring together multiple products in our portfolio would meet the needs and the solutions of both sides of the equation the investors and the asset managers.
Thanks for the question Owen.
Thank you. Our next question comes from Russell Clouds with Redfin Atlantic Your line is open.
Yeah, how it goes what is the focus on the goodness. Please we've seen some interesting new product launches from you and the last cool with.
I'm wondering if you can give us some more detail and apply for new products. In this area may need countable areas should we expect you to focus growth I'm thinking comment in just the derivatives fixed income aware as you've had some good pulled up nodes within the law school, but what more is there to come and I was also hoping you could explain how <unk> revenue growth in this business, particularly in respect too.
Cough. Please thank you.
Mmm.
So let me start and then I'll hand, it over to give out to talk a little bit about the expenses and then what we're seeing on the financial side, but right. Now. There's also a lot of changes going on in the in the asset management industry I, just talked about what's happening with the private market side, but at the same time industries like traditional asset management, we see the shift from active duty.
<unk> and what that place too is one of our strengths and you asked about the type of products, which are coming out Ah. One set is related to sustainability, there's a whole type of new interest going on and maybe a few years ago that was more of E. S. G. Now, it's the tending more towards climate and energy transition we see.
With for instance, our own cross in across.
Divisional index, which is related to battery metals. We also see a lot of interest in the climate up the Paris accord climate transition indices. So there's a whole set of indices that we've been launching in particular for European investors and with European asset managers related to related to.
Climate, we also see a set of indices, which are a cross or multi asset class industries, which allows us to take advantage of what we have from S&P global from our index business traditional S and P. 500, another equity indices, you bring that along with the credit and fixed income indices that came with I just market, that's a whole new asset class for.
Is to be able to provide a multiasset class with the credit aspect to credit all politicians <unk>. There's another set of products, which are related to exchange traded derivatives, they're not direct indices, but there's a lot more interested in risk management and hedging and trading strategies and with our core foundation and our relate.
<unk> shifts the CBOE in CME, we're able to develop a whole new set of D. T DS and you've seen strong growth in that area as well so across the board. It's climate. It's Multiasset class. It's factors, it's a whole set of different types of indices on the on the fixed income side and then it's also exchange traded derivatives and new approaches to products, which were.
We're already been developing there, but let me hand, it over the email to give them more color on the numbers.
Russell specifically your question about mix and mix shift we are very pleased to see that the AUN fees are up again. This court R and that T. A U N levels N B a U M fees are again correlated in the same direction.
But a couple of more details comments I want to make the art is first as we have said many times. Please keep in mind today. If you look at a U N fish. There are also other categories going into the <unk>, it's not the only etf's their social mutual funds or insurance funds for O T. C fall huge and all of them grew a little bit less than the <unk>.
A U N levels of E. T. S. So that is one part why you will see always a little bit off the discrepancy between Elaine levels for ETS and the and the fees secondly at the trends that we talk to you about lost chord are often mix shift is continuing what we are seeing is that the market is a bit risk off.
That there is a move from more specialty tea extra more flagship ETS. Our flagship Etfs are taking in a lot of <unk> supposedly flows we had this quarter, but those funds are more lower level of basis point fees. We think this is a current market <unk> situation that will <unk>.
<unk> at some point in time, when the market there'll be more risk on and there's more interest in the special T. E. T. S. But this is a mix shaped trends that were still seem continuing also in the third quarter.
Thank you Russell.
Thank you. Our next question comes from Shlomo Rosenbaum with Steve stomach with your line is open <unk>.
Hi, This is Adam parents out for summer September issue is transfer strong do you see that as a start of improving trend or more indicative of companies rushing to get uhm financing ahead of further rate increases given the sharp a rape movements we saw on September.
Yeah, Hi, Thanks for the question Yeah. It looks September was set with higher than we expected for sure and we we do believe that some of that was essentially pull forward from Q4, having said that I I think there's a number of additional factors here that are important to think about Q4.
And onwards, and and some of those are are some that I referenced earlier you know do we for example, you know will we see some issue was actually pull forward from 24 in queue for it this year something we're tracking and as I mentioned earlier. We're also looking at that you know the and then extend activity in the banking space, which was very strong in in Q3 as well as.
Some of the refinancing in in bank loans as well. So a lot of factors you know the sort of net new factor there of course as well as the is the geopolitical overhang that we have to continue to watch. So overall, we taken prudent <unk> look for for Q4 and and that the usual factors that we.
<unk> watch going into next year, we we have a handle on all of those that as well one other point that I would just that and and this is something that I think is important of you know since it's a good indicator longer term is is the flow of funds into fixing confounds you know Q tree for.
Example into high yield and that and leveraged known funds within that positive. That's a good thing good indicator through the first half of the year, we saw the inflows back into fixing confounds overall against the huge net outflows from last year. So these are things that we have to continue to watch that you're going to keep foreign into into next year. Thanks for the question.
Thanks, Adam.
Thank you. Our next question comes from Jeff Miler with Bird Your line is open.
Yeah. Thank you there was a comment about improving relative position, it's yellows Martina how much of that was just about retaining capacity through and had gone through a challenging market versus what else are you doing and are there any kind of like I just synergy benefits and then just quickly tell you about if you can address what drove the lower tax rate.
And if there's any sort of like structural carryforward benefit from whatever's driving it beyond twenty-three. Thank you.
Hi, Jeff. Thanks, so much for for the the question actually we saw an improvement across the number of the Subacid classes in instruction finance a wrong. We're just frankly very very pleased certainly a lot of this is related to the additional investments and could have the and what what I have been saying.
And will continue to say it is not just about capacity, it's about the strength and the expertise of the talent and that is really incredibly important in these off the <unk>. The overall at the top is also experiencing some growth in part driven by the private credit issuers and so we can make sure that we have been.
You know on the street talking to everybody, we need to talk to making sure that all of the issues are aware of the talent and capacity that we have and and we continue to remain highly relevant in the space I would say just very pleased with the execution from the team. So far this here in this area. Thanks for the question and.
<unk> to the second part of your question or effective tax rate is lower in the quarter, primarily due to some new guidance came out during this quarter with with respect to the way how to apply for and texts credits and wound up impact our medium term outlook with respect to the tax rate.
Thanks, Jeff.
Thank you we will now take our final question from Heather Walski from Bank of America, You May I ask you a question.
Hi, Good morning, Thanks for taking my question I actually wanted to ask you a question about the commodity insight and if you can just talk about the drivers that you expect to I got to help you maintain your your current level of growth and and just help put in perspective, how much commodity prices.
K O R do not and perhaps progressing I bet that thanks.
Thanks, Heather this is Doug.
Well first of all when we look at this industry, it's being driven by a credible amount of transformation, we talked earlier in a different context about energy transition and you take what are the traditional oil gas commodity products, which we have a very strong position in both from price benchmarks as well as news research and analytics.
And we announced that we have just launched this plats connect which is a a platform where we take the two services from what had been plots and would've been eaten or from my chest market and put them together in a single platform that means that we can continue to serve all of the traditional markets and away with a very high quality platform with.
It's easy to use it's easier to search on will be enhancing it with AI tools over time and so that's just the beginning of where we already see the traditional markets growing and we're able to serve them better and faster in ways that are are much more compelling all the time and that that into that that there's a mix of new commodities new energy sources.
There's areas like the metals would you used for energy transition that we already have a position in but we're getting stronger all the time and then you have the energy transition products related to things like a carbon intensity carbon markets.
How we look at the transportation related to that the infrastructure that's related to that and then on top of that there's an incredible amount of synergies across all of this and P. Global with S. One for example, with new datasets, which you are being added to the marketplace and market intelligence, New datasets week, which can be added to Catholic you Pro So we look at this as a.
Business. It is in the right place at a time when the markets need transparency they need compatibility they need high quality data and they may need it delivered in a way that's easy for them to use and they can build it into their workflows. So we're really really very pleased with our progress and this is a business that we're we're going to continue to invest in so.
Thank you very much Heather and let me just give a couple of closing remarks I want to first of all thank everyone for joining the call today and your excellent questions is always I'm really proud as you can hear about the progress we've made with the merger with I just market and all of the integration that's taking place and now we're able to talk more and more about the <unk>.
Avenue side in the product launches and you saw them. This this quarter with plants connect and enter the insides and there's a lot more to come.
And this is combining the best across both businesses to create the new as in pretty global I also Wanna think Martina Ah for providing her perspective today and thank you for joining us and as always I want to thank our people for a great quarter their excitement and passion continue to inspire me personally and Wanna. Thank all of them for what they do.
So again, thank you for joining a call today and have a great day. Thank you very much.
That concludes this morning's call a P. D. F version of the presenters slides is available for downloading from Investor Dot S. P. Global Dot com replays of the entire call will be available in about two hours the webcast with audio and slides will be maintained an S. M. P. Globals website for one year the audio only telephone <unk>.
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