Ladies and gentlemen, thank you for standing by. And welcome to the Q1 2021 IHS Markit Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Eric Boyer, Head of Investor Relations. Please go ahead.

Good morning and thank you for joining us for the IHS Markit Q1 2021 earnings conference call. Earlier this morning, we issued our Q1 earnings press release and posted supplemental materials to the IHS Markit Investor Relations website. Our discussion on the quarter is based on non-GAAP measures or adjusted numbers, which exclude stock-based compensation, amortization of acquired intangibles, and other items. IHS Markit believes non-GAAP results are useful in order to enhance understanding of our ongoing operating performance, but they are not a supplement to and should not be considered in isolation from or as a substitute for GAAP financial information. As a reminder, this conference call is being recorded and webcast and is a copyrighted property of IHS Markit. Any rebroadcast of this information, whole or in part without the prior written consent of IHS Markit is prohibited. This conference call, especially the discussion of our outlook, may contain statements about expected future events that are forward-looking and subject to risks and uncertainties. Factors that could cause actual results to differ materially from expectations can be found in IHS Markit’s filings with the SEC and on the IHS Markit website. After our prepared remarks, Lance Uggla, Chairman and CEO; and Jonathan Gear, EVP and Chief Financial Officer, will be available to take your questions. With that, it is my pleasure to turn the call over to Lance.

Okay. Thank you, Eric. And just before we start the call, we do have a moment of silence for all of those who have passed from COVID over the past year. This has taken place at the moment in our UK offices. And I’d just like to pause for a moment here to respect all those that have passed and people that we know and love and friends and family that may have passed away through the pandemic. So if we could just take a moment silence and then get started. Okay. Thank you. Thank you, Eric. And thank you for joining us for the IHS Markit Q1 earnings call. We started the year with a very strong set of Q1 results, which provides a great foundation for the full year. Q1 revenue was $1.12 billion, with organic growth of 3%. Adjusted EBITDA of $467 million and margin of 41.7%, up 180 basis points year-over-year, an adjusted EPS of $0.71, up 8% over the prior year. Overall, we are pleased with the start of our year and now expect to deliver results in the upper half of our 2021 guidance. In terms of our core industry verticals, let me first start with our Financial Services segment, which had record organic growth of 10% in Q1. Within Financial Services, Information had another quarter of solid organic growth of 6%. Main contributors included increased demand for our pricing, reference data, and valuation services, as well as continued growth in our SFTR reporting platform and indices businesses. Solutions had a very strong quarter with 15% organic growth, driven by solid performance across our Solutions businesses. Increased capital market issuance and greater adoption of our corporate actions, private markets, and regulatory compliance offerings were all significant contributors. We continue to expect Solutions to be a large growth contributor for the full year. Finally, our Processing business grew 6% organically, with strength in loans and derivative performance as expected. For the full year, we now expect Financial Services to be in the higher end of our 6% to 8% targeted organic growth range. I just want to congratulate the team on that record 10% quarter. That's the first time record since Markit went public and IHS Markit together that we had a 10% quarter. So congratulations to everybody. Moving on to Transportation, which had organic revenue growth improved to 4% in Q1. As expected, we continue to see the rebound across our businesses at varying speeds. We’re particularly pleased to see our recurring revenue growth improved to 8% in the quarter. Our dealer-facing businesses experienced strong growth across CARFAX and automotiveMastermind, with revenue growth rates approaching pre-COVID levels. New business was strong across the portfolio in Q1, and we remain confident about the outlook for the rest of the year. Also in Transportation, our Maritime & Trade business had a very good start to the year, which was in line with our expectations. We also hosted a successful virtual conference in March. We expect strong new business and retention performance will drive an acceleration of recurring revenue growth through the rest of the year. For the full year, we now expect Transportation’s organic growth to be in the 13% to 15% range, which is up from our original 12% to 15%. Moving on to Resources, where organic decline was negative 10% in Q1. Our Resources business is playing out as expected. In 2020, given the industry conditions, we put into place a number of drivers that should help us return to growth in 2022. As expected, our annual contract value has bottomed in Q1 and we expect for it to slowly recover through the rest of the year, which bodes well for 2022 recurring revenue. Our downstream organic revenue growth performed as expected and should accelerate through the rest of the year. In the beginning of March, we held our conference, which had over 19,000 participants. Even with the virtual event, we were able to bring together leaders in the energy industry, world governments, finance, and technology to discuss the future of energy. We also hosted a successful virtual World Petrochemical Conference. In 2021, we continue to expect organic revenue results within Resources to improve compared to 2020 and to be down year-over-year in low single digits, as upstream improves and downstream continues its growth trajectory. Finally, CMS organic revenue growth was in line with our expectations of negative 1% for the quarter. We expect improving results across Product Design, TMT, and ECR to continue through the year. For the full year, we still expect CMS to deliver mid-single-digit organic growth. Now on March 11th, the shareholders of both IHS Markit and S&P Global overwhelmingly voted to approve the merger. We are working with the relevant regulatory bodies and still expect a second half close. And now I’ll turn the call over to Jonathan.

Great. Thanks, Lance. Q1 results included revenue of $1.12 billion, which represents organic growth of 3% and total revenue increase of 4%, with recurring growth of 4%. Net income of $149 million and GAAP EPS of $0.37. Our adjusted EBITDA of $467 million, an increase of 8%, with margins of 41.7%, this represents margin expansion of 180 basis points. And we also delivered adjusted EPS of $0.71, an increase of 8%. Regarding revenue, our Q1 organic growth of 3% included recurring organic growth of 4% and non-recurring organic decline of 7%. This decline in non-recurring was primarily driven by lower automotive OEM activities, lower energy consulting activities, and transactional content purchases for upstream and product design when compared to Q1 of last year. Moving on to segment performance. Our Financial Services segment drove organic growth of 10%, including 9% recurring in the quarter. Solutions, in particular, had strong performance, delivering 15% organic growth, primarily from strength in equity capital markets, corporate actions, and regulatory compliance offerings, and strength in our core portfolio monitoring management tools, while information and processing each had a 6% organic increase, driven by pricing and valuations and loan market activities, respectively. Our Transportation segment delivered organic growth of 4% in the quarter. This included growth of 8% recurring, as Q1 had strong growth within our CARFAX and automotiveMastermind businesses. Non-recurring revenue declined by 8%, primarily driven by continued lower activity in digital marketing and recall. Our Resources segment had 10% organic decline, which is comprised of a 9% recurring decline and a 20% non-recurring decline. Q1 organic annual contract value decreased by $7 million in the quarter and our trailing 12-month organic annual contract value is down 11%, as we have largely cycled through our subscription renewals since the North American energy market was severely impacted at the end of Q1 last year. Our CMS segment had a 1% organic decline, including a 2% increased recurring and a decline of 25% non-recurring. Moving now to profits and margins. Adjusted EBITDA was $467 million, up $35 million versus the prior year. Adjusted EBITDA grew 8% with a margin of 41.7%, up 180 basis points. Moving on to our segments. Financial Services adjusted EBITDA was $233 million, with a margin of 48.1%, up 100 basis points. Financial Services margin was driven by strong revenue growth while supporting continued investment. Transportation’s adjusted EBITDA was $147 million, with a margin of 47.1%, up 740 basis points. We do expect margins to moderate in forward quarters, as we see more expense tied to revenue growth. Resources adjusted EBITDA was $74 million, with a margin of 36.6%, a decrease of 340 basis points, as a result of lower revenue. CMS adjusted EBITDA was $26 million, with a margin of 21.5%, down 250 basis points. This quarter decrease was primarily driven by mix shift, which we expect to improve during the year. Adjusted EPS was $0.71 per diluted share, an increase of 8%. Our GAAP tax rate was 17%, and our adjusted tax rate was 20%. Q1 free cash flow was $172 million. As a reminder, Q1 is seasonally our lowest free cash flow quarter. Turning to the balance sheet. Our Q1 ending debt balance was $5.1 billion, which represented a gross leverage ratio of approximately 2.7 times on a bank covenant basis and 2.6 times net of cash. We closed the quarter with $172 million of cash, and our Q1 undrawn revolver balance was approximately $1.022 billion. Our Q1 weighted average diluted share count was 401 million shares. As we mentioned in Q4, the merger agreement with S&P Global restricts our ability to purchase our shares. And therefore, our share repurchase program is currently suspended, other than for the repurchase of shares associated with tax withholding requirements for share-based compensation. Moving to guidance. We had a great start to the year, and now expect to deliver results in the upper half of our 2021 revenue, adjusted EBITDA, and adjusted EPS guidance ranges, which include the following: revenue of $4.535 billion to $4.635 billion, with organic revenue growth of 6% to 8%, including recurring organic growth of 6% to 7%, adjusted EBITDA of $2 billion to $2.03 billion, with adjusted EBITDA margin expansion of 100 basis points when adjusted for FX, and adjusted EPS of $3.11 to 3.16. Finally, we expect cash conversion in the mid-60s as we lap our 2020 one-time cash impacts. And with that, I will turn the call back over to Lance.

Okay. Thanks, Jonathan. It was a great start to 2021, which puts us on track to deliver strong full-year results. I want to thank our colleagues for their continued focus and dedication during the challenges of the pandemic and as we work towards closing the exciting merger with S&P Global. With that, we’re ready to open up for questions. Operator?

Thank you. Our first question comes from Kevin McVeigh with Credit Suisse. You may proceed with your question.

Great. Thanks so much. And congratulations on the great results. Hey, Lance or Jonathan, could you unpack maybe just within Financial Services, you gave really good detail there. But the 10% organic growth overall, it was just really outsized growth in non-recurring. And want to get a sense of, given that strength, does that impact the overall business as you think about it over the balance of the year both on the non-recurring side and then some of the more episodic issues as for core Financial Services business? Is that a structural step-up as you think about the business?

So were you - you're referring to Financial Services 10% organic growth? Yeah, to just take the breakdown. Okay. I’ll pass that to Adam and he can give you a bit breakdown of the 10% and where the real strong parts are and what he sees on the go-forward as well. Adam?

Sure. Thanks. So yeah, we’re obviously very pleased with the quarter. We’ve built strong platforms and strong capabilities in a few markets that have really seen strength through Q1. We do expect some of that strength to continue throughout the year, particularly in equity capital markets, you saw a very strong first quarter. Second quarter continues to look strong. We’ll see what the balance of the year brings. And similarly, in some of the loans markets, we’ve seen strength as well. So we feel pretty good about the core businesses. They continue to grow at the rates that we’ve targeted, in some cases, towards the higher ends of those targets. With the addition of strong capital markets, that gives us the opportunity to deliver a double-digit quarter like we did here. I’d love to say we’ll continue that into the future. We’ll see what the future brings. But it’s about just really about positioning our product to take advantage of those opportunities when the markets are strong.

Okay. Thanks, Adam. Also, the performance in private markets and performance generally across Solutions as asset managers are assessing their cost structures has really been a strong tailwind for the team. And it’s great to see the Solutions teams back to 15%, which we hadn’t seen for a while. So, great results all around. Next question?

Thank you. Our next question comes from Manav Patnaik with Barclays. You may proceed with your question.

Thank you. Good morning. Lance, I was hoping you could help just provide some of the key takeaways from CERAWeek when you look out over the next couple of years and maybe 3 to 5 years. You know, there’s obviously a lot of movement. And I was hoping some of those insights could help us just figure out what the trajectory for Resources is?

Yeah. Okay. No, that’s a great question, Manav. So the first off, I guess when you look at the agenda for CERAWeek, you see a strong formation of discussion in plenaries around energy transition, which is a step away from the big discussion around climate change. And when you think about how the world is responding now with the new Biden administration, with the COP26 coming up, you know, real strong support for the 1.5-degree pathway. And I think that positions IHS Markit’s energy team very, very well for the energy transition associated growth that’s going to come as the industrial participants start to shift gears and look for how they might participate in their businesses with respect to energy transition. That being said, it was pretty clear from the CERAWeek discussions that 100 million barrels a day is still a level of demand post-COVID that is in the crosshairs of what needs to be supplied. And therefore, our upstream business will need to continue to support and play an important role in the provision of the fossil fuels needed, as the world transitions towards 2050. So I think we win both ways, thought leadership, a player in the upstream to support the required supply, and a team that’s working very hard to transition itself through solar, wind, hydrogen storage solutions and a variety of other activities that are expected to decarbonize our world. So I think we’re doing a good job. I think CERAWeek to me really sung a story of energy transition stronger than it ever has. And I think we’re well-positioned to get the new growth and to maintain our contracts that we’ve managed through 2020 to longer term and a bit lower price. And so, we’ll see the slightly negative impact through this year. And I’d expect mid-single-digit growth as we go into 2022. Brian, do you want to add to that at all?

No. Yeah, I just think the team did a great job taking the physical event and migrating into a virtual event. And we’re looking forward in October to having a physical event in India, and of course, next March. But, I think you’ve hit all the high points with energy transition, ESG, clean tech, carbon capture. All of these things that our customers are looking forward to, we’re in a good position to help them.

Okay. Thanks. Hey. Thanks, Manav. Next question?

Thank you. Our next question comes from Gary Bisbee with Bank of America. You may proceed with your question.

Hey, guys. Good morning. So the question I continue to get asked most as it relates to the pending merger is just for a bit more granular color on synergies within some of segments. I guess with Adam slated to run Market Intelligence, I wonder if he has got any more thoughts or Lance you do, just to give us a little more color on where you see the big opportunities merging your Financial business within S&P, you know, either on the cost side, or maybe more importantly on the revenue side? Thank you.

Okay. Well, maybe I’ll start and then hand that to Adam given he is engaged in that post-merger integration discussions. But one thing I can say is that the cost side of the equation has been very well mapped out. Teams are aligned, and my view is that that’s the low-hanging fruit over the next couple of years. And both teams are very focused on making sure they can deliver the results. The exciting side, of course, is the revenue opportunities that Doug and I spoke about. And we see substantive opportunity for revenue synergies. And the teams have started to map them out. They are meeting regularly. And maybe for Financial Services, to start, Adam, you want to chat, and you can probably add the index side in as well.

Yeah. And I really would refer you back to when Lance and Doug talked about it in the merger. Those core areas that were identified upfront continue to be the core areas of opportunity, whether it’s in bringing together multi-asset class benchmarks in our index franchise, the scale of data assets that we can make available to customers and more efficient delivery to those customers. The combined ESG capabilities and assets of the business, the strong ability to play a role in private markets, an area growing quite rapidly, and our deep knowledge of underlying company financials, as well as the tools that are used by the private equity and private credit industry to manage their portfolios. And then, of course, a significant set of data and capabilities around credit and risk looking into the supply chain of customers. So all of the areas that were identified upfront, as we’ve gone through a more extended period of discovery, have proven out to be quite significant opportunities for us moving forward. I think in the coming months, the teams will update publicly our views on synergies. It’s still early to do that. We’re still in a regulatory approval period and still in a discovery phase. But it’s – you know, as we dug in more and more, all of the expectations that we had have proven out.

Thank you.

Thank you, Adam. Next question?

Thank you. Our next question comes from Jeff Meuler with Baird. You may proceed with your question.

Yeah. Thank you. Question on Transport, so the recurring looks particularly good to me given that it’s still a tough comp, and I think you effectively lost a year or two price lift in that business. So is that the broader Mastermind product suite that’s resulting in more cross-selling or what’s driving that? And then on digital marketing, is it an environmental factor from your perspective where they just haven’t leaned back in yet, or is there some initiatives to improve the positioning of your business that we should be watching for? Thanks.

Edouard?

Right. And hi, Jeff. Thanks for your question. And you are right, the story of the quarter is our recurring revenue growth. We’re very happy with it. It’s developing according to plan. And it shows the strength of the underlying business, and it should strengthen throughout the year. What's driving it? I think it’s our core products, right? So if you look at the CARFAX offerings, if you look at the Mastermind offerings, or if you look at some of our core subscription products like supply chain and technology, all of these businesses are growing significantly and are showing good resilience in the first quarter. On the digital marketing side, so what we’re seeing is advertising spending is coming back relative to where it was two or three quarters ago. But it has not yet resumed to pre-COVID levels. Why is that? A couple of reasons, but one of the big ones is low inventories. The supply chain is still catching up and trying to rebuild inventory levels, in particular in the North American market. And when inventories are low, advertising spend tends to be lower. And we’re still seeing this in the industry today, and we will see subdued inventory levels for the next couple of quarters at least. And that’s why advertising spend in digital marketing is still not quite where we would like it to be. We are seeing strength in the business. We are - activities far higher than it was two quarters ago. So we expect digital marketing to be stronger as the year goes by.

Thanks, Edouard. Next question?

Thank you. Our next question comes from Alex Kramm with UBS. You may proceed with your question.

Hey, good morning. A quick one on the updated guidance. It sounds to me like financials and automotive doing a little bit better, and then the other business is kind of in line with expectations. Can you also talk about how FX has impacted your outlook change? You got a small benefit in the first quarter. But since then, I think, some of the major currencies have moved in kind of opposite directions. So just wondering, how much, if any, FX benefits are driving the guidance to the higher end of the range? Thanks.

Sure. This is Jonathan. I’ll jump and answer that question. We certainly are getting some benefit of FX at the top-line on revenue. That will impact some of the forward-looking guidance we’re saying about guidance being at the upper end of the range. However, lot of that is just core operational improvement that we’re seeing from AFS that we continue to see from Transportation and also the outlook for the rest of the year for both Resources and CMS. You should also note, Alex, because you know, we get a benefit from - at the top end from FX, it does impact our expenses. And so the improvement you’re seeing from EBITDA is really a reflection of both FX impacting both revenues and expenses. So the EBITDA and EPS flow through is I would call core operational improvement.

Very good. Thanks.

Thank you.

Thanks, Jonathan. Next question?

Thank you. Our next question comes from Andrew Steinerman with JPMorgan. You may proceed with your question.

Hi. Within Resources, could you tell us, if the non-subs business, like the Energy Consulting business and other non-subs business, has lifted off the bottom yet? And kind of what is IHS doing for the industry as the industry recovers, in terms of non-subs?

Yeah, hi. This is Brian. So yeah, the consulting business is already bouncing back. When we look out forward, we’re going to be having double-digit growth even in upstream on consulting, which is a good sign for us, because usually when consulting bounces back, then you have your subscriptions following.

Next question?

Thank you. Our next question comes from Hamzah Mazari with Jefferies. You may proceed with your question.

Hey, good morning. Thank you. My question was just around the market serve JV with CME. I know you have that listed as assets for sale. Any mechanics we should be thinking about, on that particular JV? And, as it relates to sort of the larger merger? Thank you.

Adam, you want to answer that one?

Yeah. I think, that's a combination that we've talked about for a couple of years, in looking to pull together some of the core assets in the industry around post-trade processing and really not related to the merger. It wasn’t done in anticipation or in connection with that. It was really part of a larger strategy around maximizing the value that assets set. It will continue to be an important part of the business. We’ll look to continue to leverage it in terms of data sets and opportunities that will come out of making that process much more efficient for our customers and those joint offerings. So I think it continues to be complementary to the combined business, but no direct connection. Thanks.

Thanks, Adam. Next question?

Thank you. Our next question comes from Ashish Sabadra with Deutsche Bank. You may proceed with your question.

Thanks for taking my question and congrats on a solid quarter. Just a question on the robust margin expansion that we saw in the quarter, we’ve seen several quarters of this margin expansion. My question was - are there further opportunities for cost takeout and accelerate the margin expansion? And this is more through some structural changes within IHS Markit itself? Thanks.

Maybe I can start, Jonathan, and then you can add. So, first off, we have a strong view at IHS Markit, and that will carry on with the strategic merger, there is an opportunity to continue to see Resources, especially through this new understanding of the virtual world, to see Resources in some of the better cost locations that we operate in. And that can be within North America, within South America, India, Eastern Europe, Europe, and the Far East. All of our major centers have close proximity to some better cost on or offshore locations. So location plays a big role. The second thing that’s playing increasingly big role is technology and the use of technology to manage our more operationally-focused jobs and that also gives us a continued opportunity for margin expansion. So as we look forward, we see that 100 basis points of margin a year, as one that we can continue to support. And there will be opportunity for margin expansion in the combination as well. Jonathan, do you want to add to that at all?

No, Lance. I think you covered it really, really well. I guess, the other thing I’ll just add on top of the cost levers that you’re always pulling is, of course, we get the natural benefit of the scalability of our revenue as it comes through, which helps with that lift. But, Lance, as you said it well, I think we see a very clear path to 100 basis points at that suggested for this year.

Okay. Thank you.

Thanks.

Thank you. Next question?

Thank you. Our next question comes from Shlomo Rosenbaum with Stifel. You may proceed with your question.

Hi. Good morning. Thank you for taking my question. Hey, Lance, can you give us a little more insight on how the sales are going from the Data Lake going commercial and how the new product innovation is going? Some of the stuff that you’ve been building to generate the flywheel momentum for years into the future. Is there any quantitative info you can share or, if not, just qualitatively.

Yeah. What I can say is that - and if Adam, Edouard or Brian want to add anything after this, they can. What I’ve been impressed with is the pipeline, the growing pipeline and connectivity to the Data Lake, and the assessment of the Data Lake as a new way to consume data from us more efficiently. But also to reach some broader contracts, especially around the hedge fund community, where quantitative and qualitative decision-making from vast quantities of data, you know, it’s some of the bigger hedge funds that have those tools and have those capabilities. We’re also seeing some mid-size vendors and some corporates who have been grappling with their own construct of a Data Lake, where they can leverage us as a technology platform to be able to, not just provide them our data, but to provide them connectivity for their own and even distribution for their own. So some very strong discussions that are starting to lead to revenue. There are paying customers for the Data Lake now, and that starts to grow. Edouard, do you want to add to that? How you're using it within automotive? And then maybe, Adam, you might want to do the same on AFS.

Yeah. Sure, Lance. And I’ll address the broader point about kind of innovation, product innovation. I think that is the story, right, over the past 3 or 4 years. We measure internally - we use a metric recall with the vitality index, right? I don't think we publish it. But we measure the contribution of new products to our growth. And for a division like Transportation, that contribution has increased year after year over the past 5 years. New products and high growth products are an increasing part of our kind of overall revenue growth. To give you an example, right, in concrete terms. If you look at our Maritime and Trade business, it’s always owned a number of incredibly valuable legacy data assets. But over the past 3 years, it has repositioned essentially a data business into a solutions business targeting risk management workflows, trade compliance workflows, and commodities analytics workflows. And through this transformation, it has become essentially a high single-digit growth business. A lot of these innovations have been enabled by the Data Lake and which strongly reduces the product development life cycle. So it’s certainly a good innovation story there. Adam, I don't know if you want to add something?

Yeah. I guess what I would add is, we’ve been pretty excited about the uptake and adoption of our catalog, which allows customers to integrate our data sets over 1500 data sets in the Data Lake today into their own data sets. We’re seeing that uptake, not just in asset managers, but also in corporates, banks and obviously, other parts of the buy side. One of the interesting aspects of their discovery of our data sets is the vast amount of, what you’d call alternative data within those data sets, which we’ve always believed had strong value, as more and more clients adopt our catalog and ability to access the Data Lake that seems to be proving out. We do have paying customers today and we do see the pipeline forward. And I think we’re also particularly excited about how that will come together, as we down the road finalize the S&P merger and think about their marketplace and how all of these data sets can come together in a really efficient and exciting way for our customers.

Thanks, Adam. Brian, do you want to add from energy, some of the initiatives you’re using the Data Lake for and how it started to drive opportunity?

Sure, yes. So first of all, just to support what you said. So we do see a nice pipeline of, especially chemical companies and banking companies looking into the Data Lake for solutions they perhaps can’t get in other places. Like Edouard said, when we’re looking at developing kind of clean energy, clean tech products, we can go into the lake and take information both from what we’re doing and what our customers are doing. So it’s just a good place where we can shorten product development life cycles to build out things like emissions and things that our customers are interested in.

Okay. Thank you. And just to remind everybody, when I think back to the IHS Markit merger, we said two things about building out the Data Lake over the coming years. One, that it would give us efficiencies in terms of managing our own content, which we see through margin expansion. But secondly, that would give us opportunities for distribution, combination of data with customers and third-parties and give us a real competitive edge in our ability to sell and distribute our content. The piece that I think is additive to all that, that we’re starting to learn about is more that there are significant numbers of larger customers who want to be able to interrogate large data sets to identify decision-making signals and decision points. And that’s been leading us to some of the bigger quantitative hedge funds, but it also exists within the corporate world for analytics and analysis. So I think we’re well on our way to gaining the efficiencies, and we’re starting to see the revenue follow through as well. So a good story. Next question?

Thank you. Our next question comes from George Tong with Goldman Sachs. You may proceed with your question.

Hi, thanks. Good morning. In the Transportation business, dealers saw strong growth in Automotive, Mastermind and CARFAX. Can you discuss trends that you are seeing among your OEM customers?

Yes. Hi, George. This is Edouard. So the OEM customers last year had a slightly different cycle to the dealers in the sense that in Q2 they were operating sort of more normally. But if you will, the COVID crisis really hit them in Q3, and they are still recovering from this. So today they are doing much better. As you know, demand for vehicles is picking up significantly in the US and globally in 2021, as is production. The one caveat I would bring is that the supply chain is still adjusting to this post-COVID world. So the - some of those supply chain issues have been well-documented, in particular the semiconductor shortages. And they have led us to revise our 2021 forecast down by 0.5 million vehicles. So that is a temporary kind of shock, but it is a shock nonetheless. And it's slowing down the recovery of inventories in Western markets. There are some other challenges, right? So there was a bout of severe weather in the southern US a few weeks ago. That has actually created a shortfall of chemical feedstocks. That’s also impacting the supply chain. There was a fire last week in Japan in a major semiconductor plant. So all of these are sort of impacting our customers. But in the end, it’s delaying the recovery, but the recovery is coming back. We’re in a good place in the sense that we are supporting OEMs and suppliers with some of these secular structural transformations in the industry, and those are multi-year transformations, and our data and our solutions are critical to helping them. So slower recovery, but recovering nonetheless and the outlook for the industry is positive.

Thanks, Edouard.

Got it.

Next question?

Thank you. Our next question comes from Toni Kaplan with Morgan Stanley. You may proceed with your question.

Thank you. Sort of a long-term question for you, Lance. Your business spans a number of end-markets that are going through significant industry changes. You’ve talked about the energy transition. And also within Transportation, there seems to be a shift more towards technology long-term. And I know you are providing companies with solutions to help them with these changes and shifting their strategies. I guess can you just talk about what this means within IHS? Does this mean selling different products to your existing customers as these changes take place? Do the traditional datasets become sort of less used, but new datasets receive more demand? And does this enable more up-selling to existing customers, but also opportunities to get new customers, maybe technology players, et cetera, as these changes take place? So any color there would be helpful? Thanks.

Okay. That's a good question and one that definitely encompasses our strategic vision. And for all my team, they are very focused on the impact of the changing marketplaces around us that are being driven by either technology or a quest for decarbonization, and therefore, participating in a change in the net-zero world as we look forward. So you have to take those and go, are we going to be able to participate and take revenue from that and adjust our business positively? Or are we going to find that we get dis-intermediated because some of the revenue streams will shrink? So our strategy is very, very clear. If you look in Transportation, you are seeing it right now in Maritime and Trade, and you see it in our strong automotive recovery. And that is, is that, when you look at those revenue streams and you dig into them, you start to see how they are shifting their customer base to new solutions, new platforms, and new decision-making tools. And within automotive, we are an independent supplier of information that helps people make decisions. And the world – the automotive world has got more complex. And it will continue to get more complex, as we look forward, given this drive towards net zero. So I feel like the information sets around automotive are very buoyant and participating and forecasting in good or bad markets is a good thing. The second thing I’d say is that Mastermind, when we’ve acquired Mastermind, I think it was around $80 million of revenue. It’s now running towards $120 million this year. And that’s getting driven because Edouard and his team have taken the Mastermind platform, married it with Polk data, married it with CARFAX data, took full views for the OEMs. And the OEMs for the first time are saying, why do I want to provide an incentive that blankets the US? Why don’t I target market down to post codes, or even right down to individuals? And that’s where the Mastermind platform, which we called an enterprise Mastermind, is adapting to this new digital world, and even a world where there are fewer dealerships and the car just lands in your driveway. So we want to participate in that, and the team is doing a great job shifting. There are some other ones around automotive, but I’ll shift for a second. Maritime, there, the shift is the new services. It’s supply chain, it’s decarbonization. It’s – you’ve got all the Maritime fleet information. All of your suppliers that are trying to be ESG compliant need to know what’s the carbon footprint of the delivery of my goods? And so we’re now producing a full carbon fleet analysis for our customers, and that’s a growth area. It’s being driven from the Data Lake. It’s new technology. It’s just old products adapting to new worlds and making sure we’re participating. If you go over to Energy, I think we covered that. Energy, we’re going to have to make sure that we maintain the upstream $250 million to $300 million of revenue. And the rest of the revenue, we’re going to have to grow as the Energy markets transition. And we’re very well positioned. We do consulting around all those services, that’s helpful. We know where the assets are, so that’s helpful for global warming. We know where the pipelines are, the distribution. We have a lot of data that plays into the new world. And we’re transitioning and growing our solar, wind, and hydrogen storage businesses, and this is a growth market. So it's going to be a tough. For the Energy folks, this is going to be a year where it’s tough because we gave discounts last year, and they got to recover into next year. But I think that by the time they get to 2022, they might be the darlings again in the company, and you’ll see somebody else on their back. And then Financial Services, I think we’re in all the right growth markets. So there, I feel good about it. And I don’t want to leave CMS out because, sometimes, we do, but RootMetrics, which is small, I know, but they are into 5G, and 5G is important. And if you go over to the CMS product design folks, their pipeline is all about digital transformation and focusing on the vast amounts of specs and standards that need to be added together to in-house documentation for engineers to make decisions. And we’re playing that game with our digital platform, and we’ve got a great pipeline because we can save people money. So net-net, I think, for a great – great people, a great company. We’re well-positioned to get our share. The question always is, is IHS Markit, now S&P Global, will they get their share of the growth in total addressable markets that are substantive? And my bet is, yes, of course, they will. They are filled with great people and great customers, and therefore there’s lots to do.

Thank you.

Thank you. Next question?

Thank you. Our next question comes from Jeff Silber with BMO Capital Markets. You may proceed with your question.

Thanks so much. At the beginning of the call, you mentioned the very successful CERAWeek. And I’m just curious how these virtual events compare to your in-person events in terms of economics and profitability? And going forward, what do you think your strategy is going to be on the event side?

Well, what I can tell you is that the team - the team has found that they can profitably manage virtual conferences. So they’ve done that. We have three of those, TPM, World Petrochemical Conference, and CERAWeek. And all of them had record audiences. So the - and the audiences can be record because everybody’s online virtually. So instead of 4 or 5,000 physical conference seats, you can have tens of thousands of virtual seats. People are willing to pay for top-quality content and access to the right audience. And we had all the right audience. We had top government officials, new US Energy Minister John Kerry, in his new climate envoy role. We had Bill Gates. We had heads of pharmaceutical companies. We had technology, big sessions on hydrogen. It really was impressive, and we’ll see that growth come into our next quarter. And it was - all I can say is the team was well-ahead of their plan and pressed all of us in all three events, and we’ll give you those numbers next quarter. So, I think worst-case scenario is we’re always virtual and we’re going to get better and better at it and grow from there. Best-case scenario, which I think we’re all hoping for, is we get to be back together in rooms and feel safe, and can network and build relationships like humans like to do. So, let’s hope for the second. But if the first comes, it’s not going to hurt our growth path. I think the teams have proven they can make money and grow. Next question?

Thank you. Our next question comes from Andrew Nicholas with William Blair. You may proceed with your question.

Hi. Thanks for taking my question. With respect to the merger, a lot of focus has been paid to the cross-sell and new product opportunity for the Resources and Financial Services businesses. But I wanted to ask what that might look like for Transportation. What do you see as the major opportunity there? And since I believe one component will be to sell Transportation data and research through the Market Intelligence platform, I am wondering what are the specific client types already on that platform that make the most sense in terms of consuming that information? Thanks.

Hi, Andrew. Yeah. This is Edouard. Thanks for your question. So, yes, you’re spot on, right? We have unique proprietary automotive content. That content is highly valuable to the investment community and the financial community as a whole. We made some significant progress since the IHS and Markit merger 4 years ago in monetizing these data assets. But we’re still in the early stages of a fairly long growth runway. So, if you look at the Market Intelligence kind of customer base, there is very, very strong penetration in the investment community. That will be our number one target. But there are also pockets of other customers which are potentially highly valuable for the order business. So, that’s the idea where we’re working hard to refine these assumptions and some more of this later.

Thanks, Edouard. Next question?

Thank you. Our next question comes from Andrew Jeffrey with Truist Securities. You may proceed with your question.

Thanks. I appreciate you squeezing me in towards the end. It’s remarkable to see the strength in Financial Services. Lance, can you talk about any thoughts per investing for above-trend revenue growth? I mean, do you take opportunities around, for example, robust capital markets activity to plough excess back into the business? And if so, where are those areas of focus you think could support above-trend top-line growth down the road?

Right. Well, so in financial markets, we can start there. And we have made acquisitions to support our private markets activities this year. We made an investment in one of the world-class fund admins in that support the alternative space. We see substantive synergies and opportunities there to invest in our reporting services like iLEVEL and the integration of those products into the administration side. So, that’s an investing side. IHS Markit, and now S&P Global, Adam’s teams are investing with PIMCO, Man Group, McKinsey, Microsoft, and others around a product called HUB, which they will ultimately consolidate back into their Solutions businesses. That’s all about new technology and efficiencies for asset managers. So, yes, continued investment. When you get over into the automotive world, I mentioned already the enterprise Mastermind, which is the broader OEM platform, that’s been an investment through COVID. CMS has been investing in the digitization of their business. And all of these lead me to the upper half of our growth range if executed well. You know, I was really pleased. I’ve never seen a 10% quarter probably since 2014 or somewhere before that. So to see a 10% quarter in Financial Services if things coming back is your normal businesses performing, you know, at 5% to 6% growth range, but then your new investment areas, which are big into solutions are performing at above their ranges. And that sometimes is volume, but in this case, it’s a lot of the new product development and the hard work the teams have been doing. I think in energy, it speaks for itself. It’s renewables. Its – you know, we acquired the agriculture business, and decarbonization, they all kind of go hand-in-hand, land use in this new world that we head into. And I think the teams are investing. They are adding people. They are investing in their businesses. And we only - we give 100 basis points margin, but there is more than enough opportunity through the revenue side and cost management for us to create investment dollars. And all the teams are doing that. I’ll pause here and go to the next question.

Thanks.

Thank you. And I’m not showing any further questions at this time. I would now like to turn the call back over to the company for any further remarks.

We thank you for your interest in IHS Markit. This call can be accessed via replay at 855-859-2056 or international dial-in 404-537-3406, conference ID 9579446, beginning in about two hours and running through March 30th, 2021. In addition, the webcast will be archived for one year on our website. Thank you. And we appreciate your interest and time.

Thank you. Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.