Douglas L. Peterson
President and Chief Executive Officer, S&P Global at S&P Global
Thank you, Mark. 2023 was an exciting year for S&P Global, a year of innovation and growth. Our results in 2023 serve as a testament to strong execution and S&P Global's unique position at the center of the global markets.
Excluding Engineering Solutions, which was divested in the second quarter of last year, revenue increased 8% year over year. We expanded adjusted operating margins by almost 300 basis points year over year in the fourth quarter to finish the year with approximately 100 basis points of margin expansion and we surpassed our $600 million target for cost synergies by $19 million. We delivered adjusted EPS growth of 13% to come into the high end of our guidance range as we continue to benefit from strong revenue growth, disciplined expense management and a commitment to strong capital returns.
On the topic of capital returns, 2023 marked the 50th consecutive year that S&P Global has increased its cash dividend, and we've already announced the board approval to make 2024 the 51st. In 2023, we returned $4.4 billion to shareholders through dividends and buybacks, representing more than 100% of our adjusted free cash flow. In addition to strong financial performance, we created a formal artificial intelligence leadership team in 2023, which we'll discuss in more detail shortly.
We also delivered double-digit growth and significant innovation in key strategic investment areas. Private Market Solutions and Sustainability & Energy Transition both delivered double-digit growth in 2023, and we're well positioned to continue growing in these important areas in 2024. Our Vitality Index, which we target to remain at or above 10% of company revenue, actually exceeded 11% in 2023 and also increased at a double-digit rate. In 2023, we delivered key wins in each of the five strategic pillars we introduced at the end of 2022. We look forward to accelerating that success in 2024 and continuing our track record of creating value for our customers and our shareholders.
We know that our success depends on creating value for our customers, and we delivered for them in 2023. We improved customer retention rates in several of our divisions last year, while continuing to introduce new products and features more quickly and more frequently. Through deep engagement with customers around the world, tens of thousands of customer touch points, we saw continued adoption of enterprise contracts and market intelligence and acceleration of enterprise agreements and commodity insights.
We know that certain customer verticals, particularly financial services and regional banks, had unique challenges in 2023. While we discussed longer sales cycles through 2023, we were able to keep our sales pipeline moving and continued to demonstrate value for our customers, even in challenging times. As we looked at 2024, we continue to see macroeconomic, market and geopolitical challenges. Our customers need unique and differentiated data sets and key insights for the markets they serve, which means our role as a trusted and strategic partner is more important than ever.
Now, nearly two years after the merger, we've put the work of operational integration behind us and we have fully turned to the exciting work of growth, innovation and execution. We remain committed to balancing margin expansion with strategic initiatives and long-term growth. We will also look for ways to optimize our portfolio of products and services. With the merger integration behind us, we plan to continue reviewing and optimizing our portfolio of assets to meet our customers' needs either through tuck-in acquisitions or potentially further divestitures as you've seen us do historically.
Turning to the 2023 issuance environment, we saw strong growth in build issuance in 2023, particularly in the second half. In the fourth quarter, we continued to see issuers returning to the market with build issuance growth driven primarily by strength in bank loans, structured finance and high yield. This contributed to a successful rebound for the full year 2023 with build issuance increasing 8%.
Turning to Vitality. We're pleased to see the continued outperformance in our Index to close out 2023. As we shared with you when we introduced this metric a little over a year ago, our goal is to make sure at least 10% of our revenue comes from new or enhanced products each year. As products mature, they'll naturally age out of the Vitality Index, even if they continue to grow rapidly. But we remain committed to that 10% target as a steady stream of innovation takes the place of any products that graduate from the Index.
We view the Vitality Index as a direct measure of the value our customers are realizing from the improvements we're making in our products and services each year. With 18% growth in revenue from Vitality products in 2023, we ended the year with more than 11% of our total revenue coming from these new offerings. This is an incredible achievement by our product development and commercial teams as they not only built great products and features in 2023, but also made sure our customers were aware and equipped to benefit from the innovation we were bringing to the table.
Across divisions, we've seen new products in 2023 that demonstrate our commitment to powering global markets in a world of rapidly evolving technology. First, in another compelling example of our cross-divisional development between Market Intelligence and Commodity Insights, we launched our Power Evaluator tool. It's already received great feedback from power utility market participants.
Additionally, in Commodity Insights, we combined the most powerful features of two leading commodity platforms, Platts Dimensions Pro and IHS Connect, to create Platts Connect, which we believe is the market's most holistic source of data, insights and tools custom built for commodity market participants.
In Market Intelligence, we also significantly enhanced Capital IQ Pro. June saw the release of one of the largest and most important updates in years, and we're thrilled with the preliminary release of our new generative AI solution, ChatIQ, to a set of pilot customers in December. We're excited for more customers to get access to these proprietary tools as 2024 progresses. We also launched powerful new tools with our new Supplier Risk Indicator and Entity Insights offerings.
In Ratings, we continued to deliver assessments and insights to help market participants evaluate different assets, and we leveraged our expertise in blockchain technology and cryptocurrencies to launch the first stablecoin stability assessment in late 2023. 2023 saw the launch of several new indices as well, including the S&P/B3 Corporate Bond Index in Brazil, multiple cross asset indices and new sector factor and thematic indices that we believe will contribute to strong growth in the years to come.
As we mentioned last quarter, we want to provide an update on our AI strategy. We've elevated the focus on artificial intelligence to make sure we have executive leadership, governance and sponsorship at the enterprise level. In late 2023, we announced internally that our former Chief Information Officer, Swamy Kocherlakota, would take on the new role as Chief Digital Solutions Officer, including executive sponsorship of AI and Kensho. Bhavesh Dayalji, CEO of Kensho, has expanded his role to now lead cross-divisional AI initiatives as our first Chief Artificial Intelligence Officer.
These changes to our leadership structure around technology, and especially around AI, are the next logical steps in the commitment to AI that began with our initial investment in Kensho nearly seven years ago. As part of this strategy, we've developed an AI accelerator to fast track high-priority AI initiatives and build common capabilities that can be deployed and used by teams across the enterprise.
There are four important ways that we expect our AI to impact our performance: First, through the development of new products and services; Second, leveraging Kensho to accelerate and automate manual processes and data operations; Third, amplifying the productivity of our internal experts, freeing up more capacity for higher order work; And fourth, embedding AI functionality in existing products to increase customer value and improve user experience. We're committed to keeping you informed about these initiatives. So we've launched a new AI page on our public website, spglobal.ai, which includes important research, our key thought leadership and insights into our developments.
At S&P Global, we have a strategic vision of the importance of AI to our industry and the world going forward, as we believe that AI will quickly become embedded in everything we do. And we have a framework to deliver the best capabilities in as many products as we can and, by extension, into the hands of as many customers as we can, as fast as we can.
Fortunately, S&P Global starts with some of the most powerful proprietary data sets in the world sourced from all five divisions. Our proprietary data layer is a key differentiator that we believe sets us apart. As we've outlined for you in the past, we remain committed to sound governance, protecting this proprietary data and preventing third parties from monetizing or commercializing our data independently.
A challenge that even data-rich companies will face is that much of this data isn't ready to be ingested or used by large language models. The data requires traditional machine learning preprocessing, things like data cleaning, data transformation, data reduction and data integration. But it also requires tokenization and tagging, which can be very resource intensive. This is the Kensho layer. The proprietary tools developed over the last several years by the teams at Kensho automate much of the pre-processing work for both structured data like finance reports, but also unstructured data like the transcript from this very earnings call. Tools like Scribe, NERD, Link, Extract and Classify do much of this heavy lifting and allow our proprietary data to be leveraged more easily and updated more quickly and frequently.
This leads to the third element of our framework, the open ecosystem. As we've shared with you before, we aren't dependent on any individual technology partner. Having so much AI expertise in house means that we can leverage infrastructure and compute platforms from multiple hyperscale cloud providers, third-party LLMs, our own proprietary LLMs, and a wide array of other vendors without having to lock ourselves in or cede economics to one ecosystem or another. Ultimately, the goal is to have generative and traditional AI capabilities embedded everywhere that makes sense.
We'll track our progress through improving customer win rates, retention rates, price and, ultimately, growth. It should also show up in our own workflows to improve productivity and efficiency, improving our unit economics and our operating margins over time. We are excited about the significant progress we've made in 2023, and we are even more excited about what this company will accomplish in 2024 and beyond.
Our innovation also extends to the efforts we make to develop our people and improve our communities. In 2023, we held an internal event called Accelerate Progress LIVE to reinforce our commitment to our teams around the world and highlight our purpose and values as a global employer of choice. We provide dedicated time for our people to pursue volunteer opportunities. We saw an 89% increase in the number of S&P Global people, who took advantage of these programs in 2023. And as more of our people returned to our offices around the world, our global people resource groups saw a nearly 50% increase in engagement.
We also demonstrated our commitment to continuously improve our reporting and transparency around our sustainability and related initiatives. In 2023, we published our 12th annual impact report and our fifth annual TCFD report. We also published our first ever diversity, equity and inclusion report, taking much of the information that we have been reporting for years, enhancing our disclosures and making that information more accessible in a dedicated report. We're very pleased that our efforts have been recognized by many external organizations in the last year. S&P Global has iconic global brands and is well known as a desirable destination for highly-skilled professionals around the world. We look forward to building upon that hard-won reputation in 2024.
Turning to our financial results. Ewout will walk through the fourth quarter results in more detail in a moment, but the headline numbers tell a strong story for 2023. We are pleased to see accelerating growth and margin expansion in almost every division in 2023. The 2023 results and the 2024 guidance we are introducing today give us confidence in our trajectory toward the growth and margin targets we introduced at our 2022 Investor Day.
As we approach the two-year anniversary of the merger, we can definitively say it has been a success. In the last two years, not only have we brought together two world class organizations, but we've delivered through a challenging period against our aspirational and ambitious targets. We integrated major software systems in record time and consolidated our offices around the world. We were able to close many of our data centers due in part to a transformational partnership with AWS. We've maintained a disciplined approach to managing our product portfolio and we demonstrated this commitment through the divestiture of Engineering Solutions and the after sales business in our Mobility division, and also through the decommissioning of a number of low margin or slower growth products.
Lastly, since the merger closed, we've returned $17.5 billion to shareholders through share repurchases and dividends. We initially set a target of $480 million in cost synergies, then raised that target to $600 million, and have now exceeded that higher target by $19 million. We are ahead of schedule on our revenue synergies to date and we'll continue to report our progress there. Lastly, we told you when the merger closed that we believed it would be accretive to adjusted EPS by 2023, and I'm pleased to confirm that we have delivered. Both our internal analysis and independent external analysis indicate that in 2023, we delivered higher adjusted EPS than we likely would have generated with S&P Global as a standalone company. I'm thrilled to be able to call the merger success and to move forward to powering global markets as one company.
Now I'll turn to Ewout to review the financial results. Ewout?
