Hinduja Global Solutions Limited · NSE:HGS
Hinduja Global Solutions — Investor Day (November 2019)
88 slides from Hinduja Global Solutions's investor day presentation, Nov 21, 2019
Slide 1: Annual Investor/Analyst Day - November 21, 2019
C;HGS HINDUJA GLOBAL SOLUTIONS November 21, 2019 SSE Limited National Stock Exchange of India Ltd. Corporate Relation Dept. "Exchange Plaza", P. J. Towers, Dalal Street Sandra Kurla Complex, Sandra (East) Mumbai 400 001. Mumbai - 400 051. Scrip Code: 532859 Symbol:HGS Dear Sirs, Sub: Annual lnvestor
Slide 2: Driving Results Consistently
DRIVING RESULTS De ONSISTENTLY een acoso? CUSTOMER SERVICE TH ANALYST & reshaping CX delivery.» J CX. Think HGS. defining cieheieiness processes &
Slide 3: 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 4: HGS is Transforming
HGS is Transforming Partha DeSarkar 3
Slide 5: The Future… What's Next!
The Future… What’s Next! • Addressing the modern customer • Providing agile technology-led solutions • Be Brilliant at the Basics 4
Slide 6: BPM Industry – The Shift
BPM Industry – The Shift Next-generation contact center Traditional contact centers – Not well operating models built to align with equipped to meet the changing needs of today’s customers… Shift customer needs… Primary toward a Digital First Model along dependence on Voice with evolved Voice servic
Slide 7: Voice is NOT Going Away… it's Changing!
Voice is NOT Going Away… it’s Changing! Text analytics | Speech analytics | Sentiment analysis | Bots & Brains | Call centre in a Box Installed base for Voice Contact Center A Healthcare client Outsourcing is massive (>$65 Bn) Speech analytics and RPA Decrease in no. of interactions and – AHT and
Slide 8: The Global BPM Market…
The Global BPM Market… Global BPM Spending ($Bn) Traditional BPM market dominates the BPM market Global BPM Services Forecast ($Bn) 180.1 188.5 197.3 206.7 161.2 172.2 62.0 46.9 2017 2018 2019 2020 2021 2022 125.2 144.7 Source: Gartner Service line Forecast 2018 Q1 2018 2022 Tradional BPO BPaaS 7
Slide 9: The HGS Story… in Numbers
The HGS Story… in Numbers Channel Mix Digital CRM Transaction processing Voice CRM 76.5% 73.7% 72.7% 72.7% 67.8% 66.4% Our platform revenues crossed the $100-million mark in FY2019 23.4% 23.8% 23.8% 25.0% 25.5% 21.0% 7.2% 8.1% 2.5% 2.9% 3.5% 3.5% FY 15 FY 16 FY 17 FY 18 FY 19 H1 FY 20 HGS Non-voice
Slide 10: Moving up the Healthcare Spend Chain
Moving up the Healthcare Spend Chain Key priorities in global healthcare industry Trends Financial sustainability Value/ outcome-based care concepts Regulatory compliance AI across clinical and non-clinical segments Care delivery Digital health tech in out of hospital settings Patient
Slide 11: Bringing in Technology in the mix
Bringing in Technology in the mix HGS is Transforming – From a Service Provider to a Technology-led BPM Services Provider Investing in Automation-led Launched Colibrium Go-To-Market & R&D for new services turning HGS Digital revamped into technology capabilities revenue R&D arm for partnerships gene
Slide 12: HGS is Transforming… to Manage this Shift
HGS is Transforming… to Manage this Shift HGS 2.0 – Solution provider at heart. Customer first in practice. Our strategy is to leverage people capital + technology innovation to intelligently deliver value for clients and make a difference to millions of lives each day Adopt technology-led BPM solut
Slide 13: We Transform Organizations into Digital Innovators
WE TRANSFORM ORGANIZATIONS INTO DIGITAL INNOVATORS 12
Slide 14: Revenue Cannibalization by Technology… We can handle it!
13 Revenue Cannibalization by Technology… We can handle it! Technology = higher opportunity for BPM players to penetrate into core processes AI to expand the scope of BPM/ BPaaS 2-3x times* What we are doing – Higher growth + Better margins: New revenue streams – Analytics, Automation, Cloud and
Slide 15: Taking a Portfolio Approach to Business
Taking a Portfolio Approach to Business Doing well Bread & Butter M&As Cost optimization +ve Cash generation Margins Debt reduction Less capital intensive technology Opex based infrastructure Selective divestments if needed -ve for improving margins Low Turnover, negative margin Pulling
Slide 16: Innovating for Healthcare
Innovating for Healthcare Ramesh Gopalan 15
Slide 17: Healthcare in Numbers
Financial Performance Revenue (INR Mn) 25,144 Acquired Healthcare in Numbers 2,739 Business 19+ Years 22,405 Core 13,881 17,036 18,932 Business 5 Delivery Geos 9,792 2015 2016 2017 2018 2019 47 Clients 157% growth between FY 15 and FY 19 FY19 Growth in Healthcare Portfolio: 32.8% 19,900 Employees
Slide 18: Industry Direction – Healthcare is Ready for Digital Disruption
Industry Direction – Healthcare is Ready for Digital Disruption Growth in Wearables Cost Shift to Customer Government Analytics and Remote Alpha Value Experience Programs Automation AI/ML Monitoring Blockchain Healthcare Market Drivers Business Technology Drivers Model Vertical Integration – Payer –
Slide 19: HGS Healthcare Strategic Imperatives
HGS Healthcare Strategic Imperatives Leverage Deep Reimagine Healthcare Experience Customer Experience Process Strategic Digital Ready Embedded Imperatives Talent Analytics, AI/ML Build Healthcare Deploy Solutions and BPM Systems Process Automation at Scale 18
Slide 20: Our Healthcare Practice Organization
Our Healthcare Practice Organization Payer Provider Services Services Membership, PDM Claims Revenue Cycle Payment Integrity Quality, Risk Adjustment Management Clinical Services Coding Services Healthcare Engagement Solutions 19
Slide 21: Practice led Solutions Leveraging our Acquisitions
Practice led Solutions Leveraging our Acquisitions Care Management Service Provider Revenue Cycle Powered by analytical models and clinical competencies e.g. Aging in Place including Management 3.0 remote monitoring, Population Health and Powered by AI, Analytics and Automation Care Coordination (Ax
Slide 22: Improve Stakeholder Satisfaction and Reduce the Cost of Operation
Improve Stakeholder Satisfaction and Reduce the Cost of Operation Case Study: Improved stakeholder engagement, reduced rework and escalations for a Top # 5 National Health Plan Client Background: HGS Solution: Outcome: One of the top # 5 Health Plan was Team HGS in partnership with the 95% reducti
Slide 23: Delivering Exceptional Customer Service while Reducing the Cost of Claims Operations by $12 Mn
Delivering Exceptional Customer Service while Reducing the Cost of Claims Operations by $12 Mn Case Study: Reduced the cost of operations by $12 Mn for a Top # 5 National Health Plan Client Background: HGS Solution: Outcome: A top # 5 Health Plan was looking to Team HGS provided the following $12.
Slide 24: Delivering Exceptional Clinical Services with 4x ROI and Reduction in Cost of Care
Delivering Exceptional Clinical Services with 4x ROI and Reduction in Cost of Care Case Study: Improve the health, coordinate the care, and lower the health care costs for our clients and their members. Client Background: HGS Solution: Outcome: A State Medicaid program with high Placed regional care
Slide 25: Enhancing value beyond transaction processing to improve Provider Experience
Enhancing value beyond transaction processing to improve Provider Experience Case Study: Transforming the Provider Engagement Services from a Cost Center to a Provider Experience Center Client Background: HGS Solution: Outcome: A top 5 National Health Plan was Implemented several initiatives for “
Slide 26: Leveraging Digital in Healthcare – a Collection of Case Studies
Leveraging Digital in Healthcare – a Collection of Case Studies NCI-Designated A Top 5 US A Leading US One of New York’s Comprehensive Healthcare Payor Academic Medical Most Renowned Cancer Center in Center in Chicago Health Systems Los Angeles Digital transformation Launched digital Enhanced the us
Slide 27: The Social Impact of our Work in the Healthcare Ecosystem
The Social Impact of our Work in the Healthcare Ecosystem We are helping 30 Mn members stay healthy and reduce their Healthcare Cost We process over 150 Mn manual claims annually valued over $33 Bn in payments Annually we are delivering 50 Mn perfect healthcare engagement experiences We are
Slide 28: We are also Helping our Clients Change the Game with New Age Metrics!
We are also Helping our Clients Change the Game with New Age Metrics! Member Experience measured beyond the CSAT, and NPS “Transition in Sentiments” % of members engaged with the device-based Wellness/Fitness Services “Engagement Rate” % of Hospital Re-admissions prevented through Patient Moni
Slide 29: HGS Recognized as a Leading Partner in Healthcare Payer
HGS Recognized as a Leading Partner in Healthcare Payer, Workers Compensation Gaining Credibility The prestigious NCQA Accreditation for Population NCQA Accreditation for Case Management assures Health and Disease Management Programs industry best practices implementation for clinical deployed f
Slide 30: Thought leadership based on Deep Industry Experience
Thought leadership based on Deep Industry Experience 29
Slide 31: Summing It Up …
Summing It Up … We are investing at the intersection of healthcare and technology Our mission is to address specific challenges that our clients face in our areas of expertise Our goal is to provide holistic solutions that combine services with digital, automation, analytics and AI Our commi
Slide 32: CES - Innovating in Core Customer Service
CES - Innovating in Core Customer Service Tim Schuh 31
Slide 33: In FY21, HGS will continue the Plan to be Brilliant at the Basics
In FY21, HGS will continue the Plan to be Brilliant at the Basics, Innovate Classic Care and Expand eCare Everywhere Innovation around Highest margin, EPS unpredicted needs and growth, largest investment E-CARE unknown requirements, Digital, Social, in innovation RPA, Bots, highest risk, capital eff
Slide 34: HGS is Innovating in Classic Care to Hire, Train and Retain
HGS is Innovating in Classic Care to Hire, Train and Retain our Invaluable Human Resources Retention is a multi-Billion-dollar industry Focus on process improvement and digital challenge innovation to: Retaining 250 people in North America = $1M to the Source Right bottom line Digital media dr
Slide 35: Workplace Flexibility Enhancing Employee Experience
Workplace Flexibility Enhancing Employee Experience More than one third (36 percent) of U.S. HGS Work@Home Expansion Feeds Off workers… Demand for More Flexible Work-Life Balance U.S. Workforce HGS W@H Agent Positions 1200 Online 800 Freelance Workers, 36% 400 0 Source: Forbes, Aug 31, 2018, quoting
Slide 36: HGS CES is delivering strong value in Strategic Industries
HGS CES is delivering strong value in Strategic Industries The Global CCO Market Spend Stood at Retail, Travel, BFS Grew Faster Than The CCO $83-86B in 2018, and grew at 3-4% Average… HGS Grew Faster than the Industry Industry Demand for CCO Services Travel grew at 15-20% on the back of demand for
Slide 37: HGS CES is delivering strong value in Strategic Industries
HGS CES is delivering strong value in Strategic Industries BANKING & FINANCIAL SERVICES TRAVEL RETAIL Credit Card Up-Selling Reservations Online Sales Achieved over $3Mn per month in Supporting over 1Mn members with Achieved over $2Mn in revenue additional revenue via up-selling our Work@Home soluti
Slide 38: Differentiating Thought Leadership in Social Care
Differentiating Thought Leadership in Social Care “HGS has developed an industry-leading social media and employee recruitment model. The company has built a world-class talent profile for hiring the agents best suited for social media work. The profile and recruitment model are both clear competiti
Slide 39: HGS is Leading Real Change in Social Media
HGS is Leading Real Change in Social Media and Delivering Major Business Impact for Enterprises #1 $21mn 19.2 in value created by Million likes, shares, Company on (in filtering more non- retweets, and sector) Twitter actionable posts via comments AI driven automation 38
Slide 40: Evolving Public Sector Position
Evolving Public Sector Position Adam Foster 39
Slide 41: HGS is a Tier 1 Partner to Crown Commercial Services
HGS is a Tier 1 Partner to Crown Commercial Services CCS Contact Centre Framework is core to Government service delivery. It enables departments and agencies access to pre-selected organisations with a proven record for successful delivery of services. CCS Annual Procurement One of 8 companies pre
Slide 42: HGS UK Continues to be Successful in Securing Critical Government Contracts
HGS UK Continues to be Successful in Securing Critical Government Contracts Recognised as a Tier 1 provider of service. We are pre-approved by Central Government for the delivery of Contact Centre operations used daily by the public. 2011 2012 2013 2015 2019 50 - 300 30 - 85 40 -130 70 - 500 2017 12
Slide 43: New Logo Wins in 2019 from the CCS Framework
3 New Logo Wins in 2019 from the CCS Framework and growth of existing Government Accounts 2 Lines of Business (DSCC & Supporting the issuing of over Supporting complex information CLA) 6 million certificates per annum and guidance for those in debt, or Poverty Involves development of Deliv
Slide 44: Future Opportunities – Public Service Delivery Model
Future Opportunities – Public Service Delivery Model We have secured over 50% of the opportunities we have bid for in FY20. Opportunities in next 12 months… Delivering more Supporting CCS complex, data Framework in development and digital driven remains valid of new solutions which until 2021 Govern
Slide 45: North American Federal Agencies Trust HGS
North American Federal Agencies Trust HGS USA & Canada Significant seasonal ramp Multi-channel – chat, voice Complex transactions requiring SMEs Cost savings through process optimisation 44
Slide 46: Growth Strategy
Growth Strategy Tom Hricik 45
Slide 47: HGS Consumer Journey Framework Solves Client Problems
HGS Consumer Journey Framework Solves Client Problems Educate buyers to increase client revenue and improve share of buyer wallet CUSTOMER STAGES Returns/ Awareness Research Buy Use Service Retention Warranty Acquire Support Retain SOLUTION HGS Engage Buy Bill Care Repair Retain “Attract new “Increa
Slide 48: Our Sales Eco-system Identifies Value across the Consumer Journey
Our Sales Eco-system Identifies Value across the Consumer Journey SOLUTION HGS Engage Buy Bill Care Repair Retain Marketing aligns the Lead Generation Sales presents new Account Management maps HGS value story to key opens the door to solutions with higher clients against the journey verticals and t
Slide 49: Improves Positioning & Increases Pipeline Thickness
Improves Positioning & Increases Pipeline Thickness Right relationships, Right companies, Right time, Right HGS Solution Journey mapping to industry/ client Persona targeting & capability mapping Digital education Productization & trademarking 48
Slide 50: Focus on Retention & Growth
Focus on Retention & Growth 68% of revenue comes from GLOBAL clients with >10-years tenure Account Management Invested in deepening client relationships & growth $170 Mn in revenue +42 40 18% NPS clients growth 49
Slide 51: Channel Program is Boosting Pipeline Thickness and Velocity
Channel Program is Boosting Pipeline Thickness and Velocity, Leveraging Partners and Their Sales Teams Leading Channel Partners Pipeline increases as we add more Partners Opportunity Count 39 9 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Actual Forecast 50
Slide 52: Tip-of-the-Spear Strategy is Opening Doors
Tip-of-the-Spear Strategy is Opening Doors Social Media programs offer unique opportunity HGS growing social media globally across to land and expand major consumer verticals Global fast food HGS EPIC™ Social Care 500 Mobile telecom USA India UK Global retailer 400 “HGS is bringing significant
Slide 53: Analyst & Investor Meet 2019
ST & INVESTOR MEET 2019 | Se e 5 N
Slide 54: Our Digital Story
Our Digital Story Enabling HGS to compete, differentiate and outperform Nat Radhakrishnan & Venk Korla 53
Slide 55: We Transform Organizations into Digital Innovators
WE TRANSFORM ORGANIZATIONS INTO DIGITAL INNOVATORS 54
Slide 56: The contact center industry is projected to grow
The contact center industry is projected to grow $330 Billion $400 Billion 2018 2022 Source: Everest Group Customer Experience Management (CXM) Services Annual Report – September 2019 55
Slide 57: But the Services Stack is Transforming…
But the Services Stack is Transforming… Customer analytics 59.4 Artificial intelligence (e.g., virtual assistants, machine learning) 48.0 Digital integration 44.8 Service personalisation 32.9 Robotic process automation 25.7 Reinventing our operating model 23.0 Proactive automation 19.4 Emerging tech
Slide 58: HGS already has the capabilities to address this transformation
HGS already has the capabilities to address this transformation. We have unified them into a new brand. 57
Slide 59: Transform Existing Client Relationships, Drive Revenues through New Customers
Transform Existing Client Relationships Drive Revenues through New Customers 58
Slide 60: We create frictionless experiences
We create frictionless experiences that solve business problems and improve people’s lives. Transform Existing Client Relationships Drive revenues through new customers 59
Slide 61: Addresses the tip of 3-tiered Pyramid
Addresses the tip of 3-tiered Pyramid in order to simultaneously (bi-modal) transform our Classic and E-Care Innovation around unpredicted Highest margin, E-Care needs and unknown EPS growth, largest Digital, Social, requirements, highest risk, investment in innovation RPA, Bots, C capital efficient
Slide 62: Exceptional CX and Conversations are the most Powerful Way to Engage and Retain Customers
Exceptional CX and Conversations are the most Powerful Way to Engage and Retain Customers Buyers will pay more for a 86% better CX All people point to CX as an 73% important factor in their purchasing decisions Find a positive experience with 65% a brand to be more influential than great advertising
Slide 63: Companies must have Customer Intelligence and Context across all Channels
Companies must have Customer Intelligence and Context across all Channels Delivering effortless, in-context, omni-channel CX is challenging: Ever evolving Rising consumer Siloed Data Scarcity of Talent Digital Channels expectations Leading companies to focus on 62
Slide 64: Experience, Intelligence, Engagement, Automation, Scale
EXPERIENCE INTELLIGENCE ENGAGEMENT AUTOMATION SCALE Designing & building Drawing on insights by Creating campaigns Automating repetitive By adopting secure, digital touch points integrating data with exceptional and simple tasks to let open, and elastic that personalize and across the content to eng
Slide 65: Our Services, Our Partners
OUR SERVICES OUR PARTNERS DIGITAL EXPERIENCE DATA + ANALYTICS MARKETING + ENGAGEMENT CLOUD SERVICES INTELLIGENT AUTOMATION 64
Slide 66: How Clients Engage Us
How Clients Engage Us $$$$ $$$ Center of $$ Excellence Solutions Looking to develop a $ Looking to solve a program that can Project specific problem support multiple Basis projects & initiatives Experts on Looking get an Demand We lead with initiative off the Looking for expertise ground solutions t
Slide 67: Next Generation Contact Centers Enable Agents to focus on Complex Tasks
Next Generation Contact Centers Enable Agents to focus on Complex Tasks Front-office Back-office Leverages a holistic knowledge base for required information Knowledge base Customer CRM System insights Customer Data Analytics Highly complex queries are Exceptions routed to agents Post Transactions i
Slide 68: Cognitive Contact Center
Cognitive Contact Center Conversational Next Gen Solutions AI Smart Agent Desktop (Unified, Contact Center Robotic Process Analytics Automation Contextual, Omnichannel) Agent Assist Bots CRM Cloud Customer Cognitive Bots Integration Data Platform Contact Cognitive IVR Center Knowledge Cognit
Slide 69: Driving Friction Less Experiences
Driving Friction Less Experiences Reduces Customer Effort Increases First Call Resolution Improves Agent Experience 68
Slide 70: HGS Digital
CHGS digital
Slide 71: Financial Overview
Financial Overview Srinivas Palakodeti 70
Slide 72: Q2 Revenue Growth: 11.4%
Q2 Revenue Growth: 11.4% Q2 FY 19 vs Q2 FY 20 Growth (In Rs. Mn) 11.4% (0.1%) (2.0%) 13.5% 11,586 12,906 Q2 FY 19 Organic Growth FX Impact Sale of GuidePoint Q2 FY 20 71
Slide 73: H1 Revenue Growth: 14.2%
H1 Revenue Growth: 14.2% H1 FY 19 vs H1 FY 20 Growth (In Rs. Mn) 14.2% 0.9% (1.9%) 15.3% 25,811 22,595 H1 FY 19 Organic Growth FX Impact Sale of GuidePoint H1 FY 20 72
Slide 74: Q2 EBITDA Growth: 65.8%
Q2 EBITDA Growth: 65.8% 120.5% Q2 FY 19 vs Q2 FY 20 Growth (In Rs. Mn) 73
Slide 75: H1 EBITDA Growth: 59.7%
H1 EBITDA Growth: 59.7% 112.8% H1 FY 19 vs H1 FY 20 Growth (In Rs. Mn) 74
Slide 76: Q2 PAT: 9.7% growth
Q2 PAT: 9.7% growth Includes one-off item of Rs. 119 Mn 75
Slide 77: H1 PAT Growth: 5.3%
H1 PAT Growth: 5.3% Includes one-off item of Rs. 119 Mn 76
Slide 78: DSO Days Improvement
DSO Days Improvement DSO (In Days) 84 82 80 77 73 71 Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Q2 FY 20 77
Slide 79: EBITDA/FCF conversion: Rs. 8,321 Mn FCF in last 3.5 Years
EBITDA/FCF conversion: Rs. 8,321 Mn FCF in last 3.5 Years Figures in (Rs. Mn) 78
Slide 80: Debt Details
Debt Details Gross Debt, Net Debt & Cash (In Rs. Mn) Gross Debt Cash Net Debt: 1,293 Net Debt: 1,761 Net Cash: 298 5,546 5,996 5,726 6,024 4,253 4,235 QE Sept 18 QE Mar 19 QE Sept 19 79
Slide 81: Debt of Rs. 5,726 Mn: 42% has fixed interest rate
Debt of Rs. 5,726 Mn: 42% has fixed interest rate USD (Fixed: 6.30%), 16% External Commercial Borrowings (Fixed: 3.77%), 26% USD (LIBOR +3.15%), 54% GBP (LIBOR +3%), 4% As at 30th Sep 2019 80
Slide 82: Debt of Rs. 5,726 Mn: 53% are Term Loans
Debt of Rs. 5,726 Mn: 53% are Term Loans Total Capital Lease, 1% Repayable by 2022 Total Term Loans, 27% Total Working Capital Loans, 46% Repayable by 2024 Total ECB Loan, 25% As at 30th Sep 2019 81
Slide 83: Business ROCE: Significant improvement
Business ROCE: Significant improvement Average Capital Employed (Rs. Mn) Increase in Capital employed in FY 20 is due to impact of IndAS 116. Right of use asset as of 30th Sept 2019 is Rs. 7,050 Mn. 82
Slide 84: Forward Cover
Forward Cover Forward Cover - India Forward Cover (In USD Mn) FC Rate 80.84 80.87 79.31 77.53 75.20 74.57 74.87 75.48 75.49 73.18 74.21 72.94 24.0 24.0 24.0 24.0 23.0 20.0 12.5 7.5 7.5 8.0 8.0 7.5 Q3 FY 20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 83
Slide 85: Reconciliation between GAAP on FY 19 Financials
Reconciliation between GAAP on FY 19 Financials For Consolidated PAT (Rs. Mn) As per Local GAAP Comments (IndAS) Includes one time HGS Colibrium (1,649) (605) impact of Rs. 200 Mn HGS Mauritius (3,387) 34 HGS Canada (212) (132) Total (5,248) (704) 84
Slide 86: Summing Up
Summing Up Healthy Revenue Growth - 5 Year Revenue CAGR of 11.4% Improved Margins – 265* Bps improvement in EBITDA margins for H1 FY 20 Over FY 19 Cash Generation – Rs 515 Crore of FCF generated in last 1.5 years Net Cash as at 30th Sep 2019 – Rs 298 Mn (Net of Debt) EV/ Trailing 12 months
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Slide 88: Thank You
Se a YST & INVESTOR il MEET 2019;
Hinduja Global Solutions — Investor Day (November 2019) on 6ix