Huron Consulting Group Inc. · NASDAQ:HURN
Huron Consulting — Investor Presentation (November 2020)
39 slides from Huron Consulting's investor presentation, Nov 2, 2020
Slide 1: Investor Presentation Q3 2020
INVESTOR PRESENTATION Q3 2020 November 2, 2020
Slide 2: Forward-looking Statements
Forward-looking Statements Statements in this presentation that are not historical in nature, including those concerning the company’s current expectations about its future results, are “forward-looking” statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended, and the
Slide 3: Company Overview
1 COMPANY OVERVIEW
Slide 4: Trusted Advisor For Transformative Strategic Decisions And Execution
Trusted Advisor For Transformative Strategic Decisions And Execution FORMED IN 2002 With approximately 200 More than 3,800 2019 revenue of $877 million professionals professionals with leading expertise We are a global consultancy that helps our clients drive growth, enhance performance and sustain
Slide 5: Global Client Base And Footprint
Global Client Base And Footprint Clients Served 100 of the top 100 research universities 65 of the top 100 Great Hospitals in America(1) 45+ of the Fortune 100 (1) Based on Becker’s Hospital Review ranking. 5
Slide 6: Partner With Clients To Strengthen Their Business Today And Create Future Growth For Tomorrow
Partner With Clients To Strengthen Their Business Today And Create Future Growth For Tomorrow Improve How do I drive efficiency and improve my financial position Fundamental to make the strategic investments I need to? Performance Reinvent How do I spot, seize and scale opportunities to create new C
Slide 7: Focused Operating Segment Mix
Focused Operating Segment Mix on serving industries facing Education 27% significant Healthcare 42% disruption Business and/or Advisory regulatory 31% change… Segment percentages are based on year-to-date September 2020 revenue results. 7
Slide 8: Operating Segment Mix: Unified Platform
…with a Operating Segment Mix unified platform that drives Education 27% 21% strategic Healthcare 42% of total year-to-date advantage Business Advisory September 2020 Business Advisory through 31% segment revenue was collaboration. generated in the healthcare and education industries Segment percent
Slide 9: Strategic Priorities To Drive Shareholder Value
Strategic Priorities To Drive Shareholder Value ACHIEVE SUSTAINABLE DRIVE MARGIN DEPLOY CAPITAL INVEST IN OUR ORGANIC GROWTH EXPANSION STRATEGICALLY PEOPLE 9
Slide 10: Huron's 2022 Strategic Framework
Huron’s 2022 Strategic Framework VISION MISSION VALUES INTEGRITY To empower our clients, our people To enable organizations to improve fundamental COLLABORATION INCLUSION and the communities we serve to performance, reinvent their business, generate new HUMILITY IMPACT OWN THEIR FUTURE. growth platf
Slide 11: Services Overview
2 SERVICES OVERVIEW
Slide 12: Healthcare Segment Overview
Healthcare AT A GLANCE • Served more than 450 health systems, Segment Overview hospitals and physician organizations, including 65 of the top 100 Great Hospitals in America (Source: Becker’s Hospital Review) Health systems, hospitals and medical clinics are under immense pressure to • Over 1,000 spe
Slide 13: Healthcare Revenue & Operating Margin
Healthcare Revenue & Operating Margin % 37.9% Clients We Serve 34.8% 33.3% 31.5% $500 40% 29.6% $450 35% Integrated Health Systems $400 30% $350 In millions Academic Medical Centers $300 25% $250 20% Children’s Hospitals $200 15% $150 Community Hospitals 10% $100 $447 $425 $357 $365 $399 5% Public H
Slide 14: Market Trends
Market Trends SUSTAINING MARGINS WHILE TECHNOLOGY INVESTMENT TRANSFORMING 92% of C-Suite respondents say growing margins, Trends indicate healthcare organizations are investing in the future and restoring dollars back investing in ways to activate valuable data from into the community is a top focus
Slide 15: Healthcare Expertise
Healthcare Expertise Care Financial and Technology and Leadership Transformation Operational Excellence Analytics Excellence • Improved transitions of • Increased cash flow • Activated technology to • Developed accountable care • Leveraged resources create a competitive leaders • Improved quality mo
Slide 16: Business Advisory Segment Overview
AT A GLANCE Business Advisory • 2019 Small Company Transaction of the Year Award Segment Overview • Winner, Turnaround Management Association 2018 Best Innovation Strategy Consulting, ALM Intelligence Across industries worldwide, increasingly complex challenges are making • 2018 Restructuring Award
Slide 17: Business Advisory Revenue & Operating Margin
Business Advisory Industries We Serve Healthcare, Education, Financial Services, Life Sciences, Energy and Utilities, Manufacturing and Industrials, Government and Other Revenue & Operating Margin % Commercial Industries 26.7% 19.7% 22.4% Clients We Serve 21.4% $300 30% 19.4% $250 25% Fortune 500 an
Slide 18: Market Trends
Market Trends SHRINKING CORPORATE LIFESPANS TECHNOLOGY INVESTMENT The 33-year average tenure of companies on the Global IT spending is projected to total $3.9 trillion S&P 500 in 1964 narrowed to 24 years by 2016 in 2020, with software being the fastest growing and is forecast to shrink to just 12 y
Slide 19: Enterprise Solutions & Analytics Expertise
Enterprise Solutions & Analytics Expertise Advisory Customer Enterprise Performance Analytics and Managed Services Relationship Resource Management Reporting Services Management (CRM) Planning (ERP) • Developed • Increased revenues • Streamlined • Increased cash flow • Maximized return on • Improved
Slide 20: Legacy Business Advisory Expertise
Legacy Business Advisory Expertise Capital Commercial Operational Restructuring & Transaction Valuation Advisory Dispute Improvement Turnaround Advisory Advisory Services • Strengthened • Achieved most • Increased cash flow • Increased cash flow • Mitigated risk during • Assessed asset competitive f
Slide 21: Strategy & Innovation Expertise
Strategy & Innovation Expertise Create Growth Build Innovation Accelerate New Strategies Capabilities Growth Initiatives • Achieved growth ambitions in fast-moving • Developed the internal capabilities required • Identified and scaled high-potential and unpredictable environments to make innovation
Slide 22: Life Sciences Expertise
Life Sciences Expertise Strategy and Innovation Asset Market Access and Provider Commercialization Pricing Engagement Strategy • Created clear plan for the • Optimized clinical strategy • Defined product value • Increased provider future to strategically position • Defined go-to-market proposition a
Slide 23: Education Segment Overview
Education AT A GLANCE Segment Overview • Worked with more than 500 institutions, including all top 100 research universities Higher education institutions, academic medical centers and research • Conducted over 7,000 organizations face mounting pressures from increased public scrutiny, evolving succ
Slide 24: Education Revenue & Operating Margin
Education Revenue & Operating Margin % Clients We Serve 25.6% 24.8% 24.8% 24.0% 24.1% $250 30% Colleges $200 25% Universities 20% In millions $150 15% Academic Medical Centers $100 10% Children’s Hospitals $134 $150 $168 $194 $225 $50 5% Cancer Centers $- 0% Research Institutions 2015 2016 2017 2018
Slide 25: Market Trends
Market Trends $1.6T 49% Student debt is $1.6 trillion and rising, driven Tuition discount rates were at an all-time Only 49% of public university chief by increasing education costs high (44.2% for all undergraduates), executives are confident in their (source: Forbes, 2020) extending the gap betwee
Slide 26: Education Expertise
Education Expertise Strategy and Student Research Financial and Technology and Leadership Innovation Success Transformation Operational Analytics Excellence Excellence • Created roadmap for • Improved retention, • Optimized funding • Increased cash flow • Activated technology • Improved the future t
Slide 27: Financial Overview
3 FINANCIAL OVERVIEW
Slide 28: Revenue trend
Revenue trend Revenues from Continuing Operations (in millions) $1,000 $835 - $855 $900 $877 $800 $795 $700 $726 $733 $699 $600 $500 $400 $300 $200 $100 $- 2015 2016 2017 2018 2019 2020 Guidance 28 2020 Guidance noted in this presentation is effective as of September 30, 2020. Nothing herein should
Slide 29: Adjusted EBITDA trend
Adjusted EBITDA trend Adjusted EBITDA (in millions) and Adjusted EBITDA Margins from Continuing Operations $160 $140 $139 $120 $130 $100 $105 $105 10.0% - 10.5% $80 $91 Adjusted EBITDA Margin $60 $40 $20 19.9% 17.9% 14.3% 11.4% 12.0% $- 2015 2016 2017 2018 2019 2020 Guidance + 2020 Guidance noted in
Slide 30: Adjusted EPS trend
Adjusted EPS trend Adjusted Diluted Earnings per Share from Continuing Operations $3.50 $3.00 $3.21 $2.99 $2.50 $2.74 Within a range $2.00 $2.15 $2.08 of $1.95 to $2.15 $1.50 $1.00 $0.50 $- 2015 2016 2017 2018 2019 2020 Guidance + 2020 Guidance noted in this presentation is effective as of September
Slide 31: Free Cash Flow Per Share & Free Cash Flow Yield
Free Cash Flow Per Share & Free Cash Flow Yield $7.00 30.00% $6.61 $6.00 25.00% $5.00 $5.38 $4.83 20.00% $4.00 $3.93 15.00% $3.00 $3.49 11.1% 10.00% $2.00 10.6% 8.6% 7.7% 7.0% $1.00 5.00% $- 0.00% 2015 2016 2017 2018 2019 Free cash flow is defined as cash from operations minus capital expenditures.
Slide 32: Operating Metrics From Continuing Operations
Operating Metrics From Continuing Operations 2015 2016 2017 2018 2019 Number of Full-Time Billable Consultants 1,821 1,903 2,136 2,247 2,576 Headcount Leverage(1) 15.0 14.7 15.3 15.5 17.4 Full-Time Billable Consultant Utilization Rate 76.9% 74.6% 74.5% 77.5% 76.1% Average Full-Time Equivalents 230 2
Slide 33: Appendix
4 APPENDIX
Slide 34: Reconciliations Of Non-GAAP Measures To Comparable GAAP Measures
Reconciliations Of Non-GAAP Measures To Comparable GAAP Measures In evaluating the company’s financial performance and outlook, management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage of revenues, free cash flow, adjusted net income from continuing operations, and adjusted diluted e
Slide 35: Reconciliations of non-GAAP measures
Reconciliations of non-GAAP measures Reconciliation of net income (loss) from continuing operations to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) (in millions) 2015 2016 2017 2018 2019 Revenues $ 699 $ 726 $ 733 $ 795 $ 877 Net income (loss) from continuing oper
Slide 36: Reconciliations of non-GAAP measures
Reconciliations of non-GAAP measures Reconciliation of net income (loss) from continuing operations to adjusted net income from continuing operations (in millions, except earnings per share) 2015 2016 2017 2018 2019 Net income (loss) from continuing operations $ 62 $ 40 $ (170) $ 14 $ 42 Weighted av
Slide 37: Reconciliations of non-GAAP measures
Reconciliations of non-GAAP measures Reconciliation of cash from operating activities to free cash flow (in millions) 2015 2016 2017 2018 2019 Cash from operating activities $ 168 $ 129 $ 100 $ 102 $ 132 Less: Capital expenditures (19) (14) (25) (15) (23) Free cash flow $ 149 $ 115 $ 75 $ 87 $ 109 W
Slide 38: Leadership
LEADERSHIP
Slide 39: Our Leadership
Our Leadership Jim Roth Mark Hussey John Kelly Ernie Torain President & Chief Financial Officer General Counsel & Chief Executive Officer Chief Operating Officer & Treasurer Corporate Secretary 39
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