Jeffrey Meuler: Yeah. Thank you. Edouard, Ewout said, I think, in the description of Mobility growth that there was new store growth for CARFAX new subscription products. That’s always a little surprising to me, but good to hear given that I think of it as a more penetrated product. So, just maybe if you can give us some color there. Is this further penetration of the heritage products? Is it something in terms of innovation or new versions of the used car products that are going through an upgrade cycle? And then just any other growth drivers you want to highlight for CARFAX. I think there was a call-out of the service line opportunity on CARFAX for Life. Thank you.
Edouard Tavernier: Thanks Jeff. So, I’ll — I can give you quite a simple answer to that question. You’re right that we work with most dealerships in North America. We work with most global OEMs, and we work with most suppliers. So, in that sense, we feel quite penetrated, because we have relationships with most of the potential customers out there. But we also have a portfolio of offerings, whether it’s at CARFAX, Mastermind or elsewhere. And within that portfolio, we have more mature offerings. But we have lots of fairly young offerings which have been developed over the past five or six years and which have a lot of mark-to-market penetration to go. So, if you take a look at the examples that Ewout mentioned, products like CARFAX for Life, used car listings, Mastermind or supply chain and technology are all products which have a huge amount of runway ahead of them, right?
They’re still younger products. They’re evolving very fast. And we have a long way to go before we get to full penetration. So think of — so if I take a step back and now think about those secular drivers, think of them as follows. We have a lot of product innovation. And from a commercial execution, we have a lot of white space with all of these offerings we’ve developed over the past five or six years, which are maybe 30%, 40%, 50% penetrated. And then, we have all of these secular tailwinds, which are those massive disruptions going on in the industry, which are creating demand for information. And we see we’re very well positioned to capture that demand. Thank you, Jeff.
Operator: Thank you. Our last question comes from Russell Quelch with Redburn. Your line is open.
Russell Quelch: Yeah. Hi. Thanks for squeezing me in at the end there. A question on fixed income Indices, please. Given you have lots of data on corporate debt at the point of issuance and you now own an incumbent brand in the space post the IHS acquisition. And the underlying market for benchmarking fixed income is accelerating as we see sort of greater participation in that space, do you see this as a major opportunity for S&P Global? And perhaps if so, can you talk about what you’re doing to invest behind that opportunity and the speed at which you think that can start delivering increased revenue growth and the degree to which it influences your 10% medium term growth ambition for Indices? Thank you.
Douglas Peterson: Yeah. Thank you, Russell. Thanks for joining the call today. We — if you take a step back — and one of the key drivers of our merger with IHS Markit was to look at what we think is happening with the transformation of capital markets globally. As you know, in the U.S., the capital markets for corporate financing is somewhere north of 70% of the market, probably even higher than that. In Europe, it’s probably only about 35%, maybe 40% at the most. And across Asia, it’s in the 20% range. We think that, that transition of capital markets globally is going to continue. We see the United States has a very sophisticated set of institutional investors that can go across the entire stack of capital. In Europe, we’re starting to see more of that.
In fact, one of the signals, which is positive for a business in Europe, is the withdrawal of liquidity programs like the LTRO from the central bank, from the ECB. We’re also known now with the combination of the products and services. Starting with Market Intelligence, we have the data services from DVA, which provide prices on over 13 million securities, loans, swaps, other types of fixed income products and loans. That’s a really incredible set of data, which we’ve now added into Capital IQ Pro. And that kind of data is used by the markets. We have the ability to expand into private credit as well. The private credit asset class is right now about $1.5 trillion, of which $1 trillion is probably out in the market in place. And there’s another $500 billion which is dry powder, which is going to be available as that asset class continues to grow.
We have ways we can serve that. So, if I look across the entire stack of capital, but let’s now look only at the debt and credit side. In the debt and credit side, we have credit ratings. We have private information, private market information. We’ve got pricing information about bonds and loans and swaps. We also are now covering the issuance with issuance data. We have Wall Street Office, WSO, which is supporting the underlying — underwriting of loans, et cetera. So, we have — we are covering products, data services, software services across the entire stack of debt and credit. And finally, also in our index business that you asked about, we also have a set of credit products, iTraxx, CDX, et cetera, that are providing information for the markets.
And we can use those for Indices. And we’re seeing opportunities there not only in the fixed income indices themselves, but also extending into ESG fixed income indices as well as multi-asset class indices. But let me hand it over to Ewout, who can supplement some of what I just said.
Ewout Steenbergen: Yes. Let me give you a couple of additional data points in addition to what Doug said. If you think about the expenses for the index business, actually this is the only division where the growth initiatives were a little bit higher than the incentive compensation we said. And that’s for a good reason. Because as Doug highlighted, there are so many areas of growth initiatives in our index business. Think about fixed income data that we can sell together with the indices itself, multi-asset class, sustainability, factor based thematics, Kensho and so on and so forth. But the most important thing here is, as we have told you at our Investor Day, this is going to be a business that we are committed to deliver double-digit growth in 2025 and 2026 at a level of margins in the high 60s.
So, of course, phenomenal outlook for this business, given all the growth initiatives. So, we think it’s the right thing to do to invest into this business line, both in fixed income, but also many of the other categories that I just mentioned. So, thanks Russell.
End of Q&A:
Douglas Peterson: Thank you, Russell. And I want to thank everyone for joining the call today and your excellent questions. And I also want to thank Edouard for joining us today. I’m so excited about the progress that we’re making at S&P Global and our focus on growth and innovation, which you heard about. I’m thrilled that we’re at the forefront of AI and gen AI and that we’ve got Kensho that’s going to help lead us and bring that together. I’m also very excited that we’re the center of what’s happening in global markets and in particular, sustainability and energy transition. This is something that’s changing every day. And we’re having the most important dialogues and building the products and solutions that people need. And as always, I want to thank our people.
I feel fortunate that this year, I’ve been able to travel again, and I’ve been meeting with our people in Tokyo, Dubai, London and Denver. And I’m always inspired by their passion and their commitment to S&P Global. And I’m always impressed by their great work. So, again, thank you, everyone for joining the call today. And I hope that everybody gets a chance to enjoy the rest of the summer, and have a great day. Thank you so much.
Operator: Thank you. That concludes this morning’s call. A PDF version of the presenter slides is available for downloading from investor.spglobal.com. Replays of the entire call will be available in two hours. The webcast with audio and slides will be maintained on S&P Global’s website for one year. The audio-only telephone replay will be maintained for one month. On behalf of S&P Global, we thank you for participating, and wish you a good day.
