NIIT Limited · NSE:NIITLTD
NIIT — Investor Presentation (October 2008)
33 slides from NIIT's investor presentation, October 2008
Slide 1: Education, Employability, Productivity – October 2008
Education, Employability, Productivity October 2008 1 Agenda Part I: NIIT Overview Part II: Environment Current Performance Business Direction 2 1
Slide 2: Part I: NIIT Overview – The Global Talent Shortage
Part I: NIIT Overview 3 The Global Talent Shortage Huge gaps in talent demand and supply in all sectors of the economy Increasing Globalization – Work mobility Changing Demographics – Ageing population Services led economy – New skill sets Talent Gap at the top; Skills Deficit at the bottom 4 2
Slide 3: India's Demographic Advantage and Skill Supply Chain
India’s Demographic Advantage: Global Workforce 2020 56 million shortage in the World 46 Million surplus in India Note: Potential surplus is calculated keeping the ratio of working population (age group 15-59) to total population constant. Source: US Census Bureau; BCG analysis Considerable investme
Slide 4: NIIT in this environment
Education, Employability, Productivity “Growth will get choked out if skills development does not take place”, Montek S. Ahluwalia – Planning Commission Huge gap in talent supply and demand, in all sectors of the economy Only 5% of labor force in 19-24 age group has one certifiable skill School infr
Slide 5: Leadership in Global Talent Development
Leadership in Global Talent Development Global Opportunity Set Globalization Demographics Services Led Economy Ageing Work Multi-Sector Population Mobility Growth Potential Personality Individuals Corporates Skills Knowledge Schools Multiple Government Delivery Distributed Formats Global Skills Deli
Slide 6: NIIT: Servicing the full labor supply chain
NIIT: Servicing the full labor supply chain School Learning Individual Learning Corporate Learning Solutions Solutions Solutions Target Audience School children Young adults Working professionals Value Proposition Academics Employability Productivity Customer School Individual Corporate • IT Trainin
Slide 7: NIIT's growth in the last 3 years
NIIT’s growth in the last 3 years 12,000 49% CAGR Revenue 10,068 10,000 7,951 8,000 6,000 4,507 4,000 2,000 - FY06 FY07 FY08 31% CAGR 37% CAGR 1100 1036 800 756 1000 EBITDA 700 PAT 900 774 800 600 547 700 + 13 % + 43 603 500 % 600 401 500 400 400 300 300 200 200 FY06 FY07 FY08 FY06 FY07 FY08 Acceler
Slide 8: Capital Structure
Capital Structure Total Capital employed – Rs. 7627 Mn Sources of Funds • No of Shares - 164.7 Mn • Face Value – Rs. 2 per share Secured • Outstanding ESOPs – 1.45Mn Debt 26% Unsecured Debt Reserves 12% 58% Equity 4% 15 8
Slide 9: Multiple Levers of Growth for NIIT
India Employability Training Opportunity Total Working Professionals 16.3m 19m Working Pros Target 2m 2.0m Non- Tech Tech Grads Graduates 0.4m Grads 2.9m 3.3m Non-Tech Tech Students Students Students 11.0m 9.8m 1.2m Currently addressed 400k; 40x opportunity 17 Multiple Levers of Growth for NIIT Expa
Slide 10: ILS - IT Training
ILS - IT TRAINING 19 IT Training • Individuals, 16-25 years • Career, Career-edge and Skills Upgrade courses • For Engineers, Science / Arts /Commerce graduates, Working Professionals • Instructor-led, supplemented by e-learning • India. China. Developing World Improving Individual Employability in
Slide 11: IT Industry is Expected to Sustain Robust Growth
IT Industry is Expected to Sustain Robust Growth Worldwide IT services Spend India IT-ITES revenues 60 525 556 588 40.3 467 495 Domestic Exports 23.6 13-15 12.8 11.5 7.7 6.7 $Bn 1.9 4 2.6 3.9 2006 2007 2008 2009E 2010E 2000 2002 2004 2006 2008 2010 CAGR 6% CAGR 29% 3,589 IT Manpower Requirement (000
Slide 12: ILS: India Centre Distribution; Partnership with Leaders
ILS: India Centre Distribution 23 Partnership with Leaders Pillars of Information Technology OPERATING SYSTEMS NETWORKS INFORMATION APPLICATIONS DATABASES STORAGE 24 12
Slide 13: NIIT: In China; Rest of the World
NIIT: In China • 185 centers • Ultra modern center in Shanghai • New center in Wuxi Software Park • “Best IT Training Company of the Year” Award 25 NIIT: Rest of the World • 159 centers • Vietnam, Nigeria, Botswana • Latin American Centers of Excellence Continued expansion. Increasing recognitions 2
Slide 14: ILS – Financial Services and Management Training; English & Professional Life Skills
ILS – Financial Services and Management Training (FMT) Logos used are trademarks of respective organizations Partnership with leaders in the industry 27 English & Professional Life Skills • Alliance with ETS for TOEIC testing • Acquisition of Evolv for English language training • Market potential –
Slide 15: English & Professional Life Skills; NIIT Institute of Process Excellence
English & Professional Life Skills Common Test existing Train to get acceptable employees employees to standard with against the given achieve standard employers standard Train potential Define employees to recruitment qualify standards 29 NIIT Institute of Process Excellence (NIPE) The latest addit
Slide 16: School Learning Solutions
Another Step Forward…. District Learning Centre-Chhindwara Then….. Now….. 31 School Learning Solutions 32 16
Slide 17: Opportunity Space
Opportunity Space • Teachers Training - 10 million Teachers • Vocational Education -24x7is an emerging area 3,000 schools Collaboration Portal ERP Math LAB & Science LAB 100,000 schools IT Education Class Room 1 Mn schools 33 Next 3 years addressable opportunity Sarv Shiksha Abhiyan 600 districts IC
Slide 18: NIIT:SLS Credentials; eGuru differentiators
NIIT:SLS Credentials 7,850,000Students 335,000Teachers 62,000 Nodes 14,000 Hrs of Content 13,161Instructors 9,626 Schools June 30, 2008 NIIT has the widest reach in the market 35 NIIT eGuru differentiators Teaching & learning Materials eGURU LAB IT LAB Computer aided experimentation Server Academic
Slide 19: Hole In The Wall Education Limited (HIWEL)
14,000+ hours of Content School Mind Champions Academy covering Science, Maths, Infra ERP & Digital Arts festival Consultancy Social Studies, English & IT Collaboration FOR Teacher SCHOOLS Development Assessment Solution Lab Staff FOR FOR Geography Solution TEACHERS STUDENTS Lab Class Language Solut
Slide 20: Corporate Learning Solutions – Our Credentials
Corporate Learning Solutions 39 Our Credentials Largest 12000 + e-Learning Person Years Content 12,000 Hrs of 20,000+ Training 150+ University of Experience e-Learning Days per Year Courses Library 1500+ print 3500+ e-learning 285,000+ Student 20,000 Hours catalog library Learning Hours of ILT 1500+
Slide 21: Diverse Customer Portfolio; Corporate Training Market
Diverse Customer Portfolio Sales, Channel, and Customer Education Business Process Improvement Training Administration Services Regulatory Compliance New Product Rollout Employee On-boarding and Corporate Communications IT Productivity and Skills Development Other Solutions Management and Leadership
Slide 22: Corporate Learning Solutions
Corporate Learning Solutions • 3500+ titles; SAAS model Learning • 3Mn+ learners on Khub Invest • Largest print & eLearning library - High growth (21%) Products • Virtual labs now available ‘in a box’ - High margin (SAAS) • Field sales force doubled in North America # 2 position • Partnership with r
Slide 23: Part II: Global Economy in turmoil
Part II: Environment Current Performance Business Direction 45 Global Economy: in turmoil Buffett’s “time bomb” goes off on Wall Street sparking crisis of confidence* Fear of recession looming large on global economies Low liquidity and tight credit markets Corporate sector operating in a state of u
Slide 24: Indian Economy: also affected, but relatively better off
Indian Economy: also affected, but relatively better off GDP growth estimates, while lowered, still at 7%+ for FY09 IT exports target on track for now, at the revised growth rate of 21 - 24% for FY09. Zinnov study indicates that Indian IT spend will grow by 17.6 - 24% by 2010. Indian banking sector
Slide 25: Education & Training Sector: current environment
Education & Training Sector: current environment Tech, BPO sectors see slower hiring – However, IT bellwether, Infosys maintains hiring guidance; to hire 25000 employees in FY09 Moderation in Net Employment Outlook for Q3 FY09 in Banking and Financial Services* – Banking sector under recruitment fre
Slide 26: JAS'08 Consolidated Financials
JAS’08 Consolidated Financials (Rs in mn) JAS'08 AMJ'08 JAS'07 YoY (%) QoQ (%) System Wide Revenue 4,680 3,664 3,986 17% 28% Net Revenues 3,095 2,595 2,702 15% 19% Operating Expenses 2,689 2,408 2,343 15% 12% EBITDA 406 187 358 13% 117% OM 13% 7% 13% -16bps 589bps Depreciation 146 126 142 3% 16% Oth
Slide 27: JAS'08: Results Highlights; ILS - IT: Highlights
JAS’08: Results Highlights Performance: H1 SWR up 17% to Rs. 4,680 Mn SW Revenue Net revenues up 15% to Rs. 3,095 Mn 8344 6921 EBITDA up 13% to Rs. 406 Mn; +21% EBITDA% at 13% PAT up 41% to Rs. 297 mn H1 FY08 H1 FY09 Operational PAT up 64% to touch Rs. 208 Mn EBITDA EPS of Rs 1.8 (40% YoY) 593 503 G
Slide 28: FMT: Highlights
FMT: Highlights Rs. Mn JAS’08 JAS’07 YoY H1 FY09 YoY Net Revenues 104 76 37% 194 62% EBITDA 6 1 548% 9 - EBITDA % 6% 1% 490 bps 4% - • Enrolments grow 89% YoY • H1’09: revenue + 62%; enrolments + 56% • Partnership with Reliance Retail for Certificate Program in Financial Services • Launched SWIFT Pe
Slide 29: CLS: Highlights
CLS: Highlights Rs. Mn JAS’08 JAS’07 YoY H1 FY09 YoY Net Revenues 1447 1409 3% 2846 2% EBITDA 43 90 (53%) 45 -68% EBITDA % 3% 6% (347 bps) 2% (347 Bps) • 15% YoY growth in Training Outsourcing & Learning Products revenues balances sluggish Custom Content revenues • India revenues grow at 48%YoY • Qo
Slide 30: Q2 Results: pointers to business prospects for medium term
Q2 Results: pointers to business prospects for medium term ILS SLS CLS Direction Evidence Impact/Outlook • Government • Steady growth in • Expect strong spending on order book in growth to continue education will government/ non- in SLS continue as government planned business • Greater adoption of •
Slide 31: Response to the current environment
Response to the current environment • Capture higher market share • Align products to current Aggression demand • Conquer empty spaces; launch new products/services Transparency • Enhance employee communication • Deeper connect with customers and partners Prudence • Open channel with shareholders •
Slide 32: Response to current environment: Long term
Response to current environment: Long term • Higher education partnerships ILS • Expansion of product portfolio; expansion in focus geographies • Increased market size by moving down the pyramid (DLC, CLC) • Growth in GSA; balance risk, profitability, resources • Excellence in Math, Science, IT, Eng
Slide 33: NIIT: Today and Tomorrow
NIIT: Today and Tomorrow • We are today, the market leader with strong credentials and competencies • We have a strong financial track record, and in the past have successfully dealt with market adversities and uncertainties • We have successfully transitioned from an IT Training Company to a Global