Hinduja Global Solutions Limited · NSE:HGS
Hinduja Global Solutions — IDFC Conference (November 2018)
38 slides from Hinduja Global Solutions's conference presentation, Nov 19, 2018
Slide 1: Investor Presentation Nov, 2018
Investor Presentation Nov, 2018 November 16, 2018
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties
Slide 3: HGS Overview
CHGS HINDUJA GLOBAL SOLUTIONS
Slide 4: About the Company
About the Company HISTORY Part of the Hinduja Group, in the BPM business since 2000 Erstwhile HTMT, IT & BPM business demerged October 1, 2006 Rebranded as HGS in 2008 FINANCIAL DETAILS (FY’18 & H1 FY’19) SNAPSHOTS FY’18 H1 FY’19 In INR term, CAGR of 10.4% in Revenue over last 5 years Revenu
Slide 5: HGS Core Capabilities to Enable the Unified Customer Experience
HGS Core Capabilities to Enable the Unified Customer Experience Analytics Customer Experience Customer Marketing Digital Enablement Assessment Experience and Digital Customer Experience Strategy Enablement Social Media Strategy Services Services Engagement Digital Experience Digital Marketing Strate
Slide 6: Relatively diversified business portfolio
Relatively diversified business portfolio Almost all HGS day to day activities relate to consumer transactions and interactions Healthcare/ Insurance Telecommunications Consumer Products Financial Services 58 Million transactions, 10 Providing extensive consumer Supporting many consumer Only
Slide 7: Who we are and what we do - update
Who we are and what we do - update Significant Local Core Business Scale Operations Who we are Global provider of industry 44,800 employees with 46% of HGS’s revenue is A focused global specific business process business services services and end to end multi 70 centers located in delivered in 18 lo
Slide 8: How have we grown
How have we grown Acquired Business Revenue Revenue Trend (In INR Mn.) Core Business Revenue 38,494 37,110 33,282 28,076 25,048 10,762 10,587 22,595 9,645 8,544 8,713 7,990 26,348 27,907 23,637 16,335 19,532 14,605 FY 14 FY 15 FY 16 FY 17 FY 18 H1 FY 19 8 8 HGS Confidential – www.teamhgs.com HGS Con
Slide 9: Revenue Composition
Revenue Composition Revenue by Verticals Offshore/Near-shore to Onshore Onshore Offshore/Nearshore Telecom & Technology Consumer Products Healthcare BFS Others 16.1% 15.3% 11.7% 9.9% 10.0% 9.8% 6.9% 7.3% 8.0% 7.9% 8.0% 7.8% 37.0% 39.7% 42.3% 44.7% 46.5% 47.0% 27.8% 34.9% 41.8% 45.9% 49.2% 52.5% 15.9
Slide 10: Revenue Composition
Revenue Composition Revenue by Delivery Revenue by Originations INR USD GBP CAD India Philippines USA UK Canada Jamaica 1.9% 3.3% 4.7% 4.3% 17.7% 12.2% 10.3% 9.9% 11.4% 12.7% 10.6% 10.2% 11.4% 22.4% 22.4% 17.7% 8.6% 6.9% 8.6% 6.9% 6.6% 10.5% 6.6% 10.5% 10.6% 10.6% 9.8% 9.8% 25.2% 25.1% 26.8% 31.1% 2
Slide 11: Revenue Composition
Revenue Composition Voice to Non-Voice Mix OPEX seats & Owned Seats Voice CRM Transaction processing Digital CRM Owned Seats Seat for Opex 21.2% 19.8% 2% 3% 3% 4% 4% 16.9% 5% 16.4% 16.0% 19% 21% 23% 24% 24% 6,837 6,856 7,243 8,817 9,507 25% 79% 35,979 34,956 35,637 35,690 35,372 77% 74% 73% 73% 70%
Slide 12: Revenue Composition: Client Concentration
Revenue Composition Client Concentration Top Clients Top 20 Clients Top 5 Clients 78% 77% 75% 73% 72% 71% 50% 50% 51% 46% 46% 47% 16% 18% 18% 17% 13% 15% FY 14 FY 15 FY 16 FY 17 FY 18 H1 FY 19 12 12 HGS Confidential – www.teamhgs.com HGS Confidential – www.teamhgs.com Driving November Results.16, Co
Slide 13: Strong and Tenured Client Relationships
Strong and Tenured Client Relationships 17% Top Client 29% Others Top 20 clients Client contribute 71% of the Concentration Total Revenue 12% Clients 11-20 30% 12% Clients 2-5 * Based on H1 FY’19 Financials Clients 6-10 Strong Client relationships demonstrated by tenured and multi- geography engagem
Slide 14: Digital and Automation/RPA
Digital and Automation/RPA
Slide 15: HGS is developing industry leading Digital Customer Experience solutions
HGS is developing industry leading Digital Customer Experience solutions, creating value for our clients, and their customers Enabling the Optimized Consumer Journey… with clear objectives in mind Revenue generation and Kiosk Voice optimization Customer Experience – with In-person IVR NPS/RTF meas
Slide 16: The Automated Enterprise
The Automated Enterprise Automation everywhere enables each touchpoint through the digital end-to-end journey Virtual Agent Insights (chat, text, social) (Reporting, dashboards, analytics) Live Agent (Navigation, Customer ID, Policy Accurate IntelliFORM Compliance) Record (email) Updating (Real-ti
Slide 17: Automation – Evolution
Automation – Evolution Characteristics of Data, Information & Process Unstructured Unstructured Trigger-based Rules-based Structured Data data - Patterns data – No Patterns Artificial Intelligence Robotic Process Basic Automation Unified Desktop Cognitive Automation Robotics / Virtual Agents Mostly
Slide 18: What does it mean for our Business - Opportunities
What does it mean for our Business - Opportunities AI will help BPaaS penetrate into the core, “heart of the business” processes Current scope of BPM/ AI to expand the scope of BPaaS BPM/ BPaaS 2-3x Core Back Core Back Mid-Office Mid-Office Processes Office Processes Office 1 As a multiple of curren
Slide 19: Key Highlights of HGS Process Automation Solution
Key Highlights of HGS Process Automation Solution Easy to set-up + Easy to use & change = High returns No need to Replace - uses Easy to Train - can work 24/7 15-50% Cost reduction existing enterprise applications and does not quit 50-75% TAT reduction No need to Integrate - Non- Easy to Run - keeps
Slide 20: Healthcare Practice overview
Healthcare Practice overview
Slide 21: How HGS Healthcare business has grown
How HGS Healthcare business has grown HGS Healthcare Vertical Trend 53.3% 49.2% 45.8% 41.7% 360 34.9% 26.2% 25.9% 27.8% 23.8% 24.7% % of Total Revenue 21.3% 22.4% 294 Revenue in USD Mn 254 211 160 115 90 Acquired 73 Acquired 61 41 49 Colibrium 34 Acquired EBOS FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY
Slide 22: Healthcare Revenue by Segment
Healthcare Revenue by Segment Healthcare Segmentations 16.5 9.5 46.4 5.2 32.6 Figures in USD Mn 12.6 25.8 14.7 17.1 9.5 287.5 255.8 215.8 10.6 179.7 150.2 5.8 103.9 84.0 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 H1 FY 19 Annualized Healthcare Payer Healthcare Provider Healthcare Platform Healthcare Clinic
Slide 23: HGS Payer Capabilities
HGS Payer Capabilities Provider Sales & Policy Claims Patient Care Network Distribution Administration Management Management Management Lead management Plan Setup Fulfillment services Nurse triage Provider credentialing Utilization mgmt. Contract review Tele-marketing Policy Maintenance
Slide 24: Provider Services Value Chain
Provider Services Value Chain Billing Services Payment Services AR Services Transcription Financial Clearance Denial management Coding EOB analysis Recovery / collections Charge capture Third party liability Carrier outreach Claim submission COB Patient outreach Self Pay
Slide 25: Financial Overview
OHIGS Financial Overview HINDUJA GLOBAL SOLUTIONS
Slide 26: Q2 FY19 Actuals vs Q1 FY19 vs Q2 FY18 Actuals
Q2 FY 19 Actuals vs Q1 FY 19 vs Q2 FY 18 Actuals – With Acquisition Quarterly Performance - Consolidated (With Acquisition) Figures in Rs Mn unless otherwise indicated Actual Actual Growth Actual YoY QE Sept'18 QE June'18 % QE Sept'17 Growth % Revenue 11,586 11,008 5% 9,426 23% Operating Costs (excl
Slide 27: Free Cash Flow to EBITDA Conversion
Free Cash Flow to EBITDA Conversion FREE CASH FLOW to EBITDA Ratio EBITDA FCF/EBITDA (%) Figures in (INR Mn) 4,424 4,061 3,219 3,173 48% 3,130 47% 31% 16% -4% -26% 1,507 FY 14 FY 15 FY 16 FY 17 FY 18 H1 FY 19 H1 FY 19 Free Cash flow excludes the impact of Income tax refund of Rs 34 Mn, Service tax r
Slide 28: Business ROCE
Business ROCE Average Capital Employed (Rs mn) Business ROCE % 18.6% 15.4% 17.0% 14.4% 14.6% 14.3% 17,071 17,145 17,464 17,834 19,082 20,100 Q1 FY 18 Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Excluding the impact of AxisPoint and Elements Acquisitions, Business ROCE of the legacy business was at
Slide 29: Summary Cash Flow Statement
Summary Cash Flow Statement (Rs. Million) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 H1 FY 19 Cash flow from Operations and after working capital 2,352 1,924 1,589 4,031 3,517 1,047 changes Cash Flow due to Capex (net) (1,137) (1,621) (2,472) (1,779) (1,261) (734) Total Cash Flow from Operations and Re
Slide 30: Summary Financial Profile – As at 30th September 2018
Summary Financial Profile – As at 30th September 2018 HGSL Particulars Rs. USD Net Worth (in millions) 15,635 215.6 Book value per share 751 10.4 Price per share 719.5 9.9 Dividend per share (FY 18) 2.5 0.03 EPS (TTM) 89.0 1.2 P/E Ratio (TTM) 8.1 8.1 Gross Debt (in millions) 5,546 76.5 Total Cash (i
Slide 31: Stock price movement
OHIGS Stock price movement HINDUJA GLOBAL SOLUTIONS
Slide 32: Share Price movement
Share Price movement 32 HGS Confidential – www.teamhgs.com Driving Results. Consistently.
Slide 33: Annexure - BPO/BPM Market
Annexure - BPO/BPM Market
Slide 34: The BPO/BPM Marketplace
The BPO/BPM Marketplace Marketplace Dynamics Demand Environment Total BPM market is over $160 billion In-house BPM 4 times the size of the outsourced BPM market Next 5 year CAGR for BPM expected to be 5.9% (Gartner Q1, 2013 forecast) Billion Dollar Plus players in this are still only a handf
Slide 35: Global BPO/BPM Market: Industry Estimates for Growth
Global BPO/BPM Market: Industry Estimates for Growth Global BPO Market Global BPO Market by Geo 11.5 193 10.6 183 9.8 23.9 9.1 22.9 174 8.1 22.1 166 In Billions of $ 8.3 21.4 158 20.2 In Billions of $ 153 18.5 40.8 39.1 37.5 36 36.3 35.5 110.6 116.7 99.9 104.9 89.7 94.7 2015 2016 2017 2018 2019 2020
Slide 36: North America BPO Spending Macro Market Overview
North America BPO Spending Macro Market Overview U.S. BPO End-User Spending Canada BPO End-User Spending (US$ bn) (US$ bn) 105.6 5.0 90.4 85.5 4.2 4.2 In Billions of $ In Billions of $ 2015 2016 2019 2015 2016 2019 Gartner Forecast: IT Services by Geography, 2014-2020 36 HGS Confidential – www.teamh
Slide 37: Europe – UK BPO Spending Macro Market Overview
Europe – UK BPO Spending Macro Market Overview Europe BPO End User Spending market Europe BPO End User Spend Forecast – by BPO Segment (US$ bn) 37.5 100% 80% 11.5 13.4 In Billions of $ 60% 40% 34.9 23.3 25.7 20% 34.1 0% 2015 2020 2015 2016 2019 Traditonal BPO BPaaS UK BPO End User Spending market UK
Slide 38: Thank You
Thank You
Hinduja Global Solutions — IDFC Conference (November 2018) on 6ix