Trinet Group, Inc. · NYSE:TNET
Trinet — Bank of America 2023 Business Services Conference
31 slides from Trinet's conference presentation, Mar 16, 2023
Slide 1: HR solutions for the people that matter.
HR solutions for the people that matter. TriNet Group Inc. Bank of America 2023 Business Services Conference March 16, 2023 © 2022 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or dist
Slide 2: Disclaimer
Disclaimer Cautionary Note Regarding Forward-Looking Statements and Other Financial Information This presentation contains statements that are not historical in nature, are predictive in nature, or that depend upon or refer to future events or conditions or otherwise contain forward-looking statemen
Slide 3: Disclaimer: Non-GAAP Financial Measures
Disclaimer Non-GAAP Financial Measures In addition to financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), we present other non-GAAP financial measures in this presentation that we monitor and use to manage our business, to make planning decisions, to
Slide 4: Agenda
2023 Regional Bank Crisis Update TriNet Overview Agenda Financial Review Q&A Appendix 3
Slide 5: 2023 Regional Bank Crisis Update
2023 Regional Bank Crisis Update 4
Slide 6: Regional Bank Crisis: TriNet Actions
Regional Bank Crisis: TriNet Actions Crisis Management Liquidity Bank Exposure • Triggered our cross-functional • Drew down approximately $495 • Consolidated our corporate crisis management team on million from our revolving credit cash at our core bank Thursday March 9 facility first thing Friday m
Slide 7: Regional Bank Crisis: Our Customers
Regional Bank Crisis: Our Customers Bank Exposure TriNet Zenefits WSEs and HRIS Users • Approximately 8% of TriNet • TriNet Zenefits used Silicon • Many of TriNet and TriNet customers across many Valley Bank as one of its Zenefits Users maintained verticals banked at Silicon operating banks accounts
Slide 8: PEO Technology Vertical Update
PEO Technology Vertical Update The Silicon Valley Bank receivership is disruptive to the Technology start-up ecosystem • Other regional banks who have sizable technology exposure are also experiencing volatility TriNet’s Technology Vertical represents ~28% of clients as of February 28, 2023 Technolo
Slide 9: TriNet Overview
TriNet Overview 8
Slide 10: Investment Highlights
Investment Highlights Innovation leader serving Differentiated PEO vertical large, under-penetrated product offerings and market HRIS software platform Increased operational Profitable growth scale and financial supported by strong leverage corporate cash generation* * See Appendix B 9
Slide 11: Large Market Opportunity
Large Market Opportunity ~61 million Underpenetrated SMB Market Number of Employees who work for companies with 500 or fewer employees6 7% ~ 61 Million Employees6 Approximate percentage of SMB Worksite Employees (WSEs) who work for SMBs using a PEO 480+ PEO industry is made up of over 480 PEO servic
Slide 12: Challenges Facing SMBs
Challenges Facing SMBs Compliance ⦁ Significant regulatory oversight ⦁ Risks for federal, state, and local noncompliance are high Complexity ⦁ Federal, state, and local regulations continue to diverge ⦁ Managing HR across multiple jurisdictions Cost ⦁ SMBs pay multiple vendors and employees for a va
Slide 13: Servicing SMBs Throughout Their Business Lifecycles
Servicing SMBs Throughout Their Business Lifecycles IOM PEO A leading cloud-based An industry-leading, Integrated TriNet PEO Industry leading provider HRIS platform service and expertise and brokered benefits of comprehensive human delivering HR, Payroll, driven, fintech solution solution delivered
Slide 14: Common PEO Product and Service Capabilities
Common PEO Product and Service Capabilities HR Expertise Benefit Options Payroll Services Risk Mitigation Technology Platform • ACA compliance guidance • Medical (PPO, HMO, HDHP) • Payroll processing and • Workers’ compensation • Employee and manager self- management service platform • Employee onbo
Slide 15: Leading PEO Technology Platform
Leading PEO Technology Platform • Benefits Enrollment • Workforce Analytics • Expense Management • New Hire Onboarding • Mobile App • Marketplace • Automatic Payroll • Time Tracking • Integration Center 14
Slide 16: Scaled Service Model
Scaled Service Model Rapid access to HR expertise: when they want, how they want Personalized strategic resource Account Manager Specialized experts On-demand HR Guidance support Benefits Payroll Platform Customer Responsive support for your employees, 24/7 Solution Center 15
Slide 17: Insurance Services
Insurance Services Workers’ Compensation ⦁ Provide fully insured, industry Health Insurance standard $1 million per claim deductible policies ⦁ Offer 500+ fully insured health plans, including plans in all 50 ⦁ Assist clients by providing risk states management services ⦁ Scale enables us to offer n
Slide 18: Vertical Strategy
Vertical Strategy Financial Services Life Science Main Street Nonprofit Professional Technology Services Full-service HR solutions tailored to our targeted Verticals for PEO clients • Different industries have different needs • SMBs want partners who know their industries and can scale with them • V
Slide 19: Servicing SMBs with PEO and with HRIS Software
Servicing SMBs with PEO and with HRIS Software + The SMB TAM is our SMB Lifecycle Configurable Model Opportunity Process of growing from An SMB may need a PEO PEO + HRIS Software or HRIS software at ~ 61 Million small to medium to TriNet can now better different times for Employees6 large, addressin
Slide 20: TriNet Zenefits Leading HRIS Software Platform
TriNet Zenefit Leading HRIS Software Platform People Operations Platform HR Time Payroll Benefits Talent Wellbeing Collaboration Analytics Compliance Engine Zen Assistant 19
Slide 21: Clarus R&D – Enabling SMBs Easier Access to Tax Credits
Clarus R+D – Enabling SMBs Easier Access to Tax Credits Specialize in Growth Technology-First Align with CPAs Compliant and Businesses Platform and Payroll Defensible Focused on helping Web-based platform Partners with Secure software solution growth businesses take enables customers to customers’ C
Slide 22: Prior Fiscal Year Financial Review
Prior Fiscal Year Financial Review 21
Slide 23: Financial Model
Financial Model Revenue EPS Growth Strong Corporate Growth from Operating Operating Cash Leverage Flow* • Vertical strategy drives • Disciplined Operating Expense • Efficient Working Capital volume growth management • CAPEX light • Customer experience drives • Use scale in operations and • Profitabi
Slide 24: Consistent Total Revenues Growth
Consistent Total Revenues4 Growth $4,885 $4,540 $754 $4,034 $3,856 $639 $3,503 $544 $530 $487 $4,131 $3,901 $3,326 $3,490 $3,016 FY2018 FY2019 FY2020 FY2021 FY2022 Insurance Service Revenues Professional Service Revenues 9% Total Revenues & 12% Professional Service Revenues CAGR5 From 2018 Through 2
Slide 25: Historical Insurance Cost Ratio
Historical Insurance Cost Ratio 1,4 Insurance Cost Ratio FY2018 - FY2022 95% 88.0% 86.5% 85.4% 85.6% 85% 83.8% 75% FY2018 FY2019 FY2020 FY2021 FY2022 Insurance Cost Ratio 1 Priced for Stable Insurance Cost Experience 24
Slide 26: Attractive EPS Growth & Adj EBITDA Margin Expansion
Attractive EPS4 Growth & Adj EBITDA Margin3,4 Expansion 14.1% 12.5% 11.6% 9.9% 9.8% $7.07 $5.64 $5.61 $5.07 $4.44 $3.99 $3.02 $2.99 $3.33 $2.65 FY2018 FY2019 FY2020 FY2021 FY2022 2,3 2,3 GAAP EPS ANI per Share-Diluted Adj EBITDA Margin 21% GAAP EPS CAGR5 and 24% Adjusted EPS3 CAGR5 From 2018 Through
Slide 27: Capital Allocation
Capital Allocation 1 2 3 Reinvest in business — Potential Acquisitions — Share repurchases — drive revenue growth drive growth through intended to offset dilution and margin expansion, acquisitions of technology, and return capital build capabilities product, and services to shareholders 26
Slide 28: Appendix
Appendix 27
Slide 29: Appendix A: Reconciliation of non-GAAP financial measures
Appendix A Reconciliation of non-GAAP financial measures to GAAP financial measures 28
Slide 30: Appendix B
Appendix B Please refer to our most recent Annual Report and Quarterly Reports for a more detailed discussion of our Statement of Cash Flows 29
Slide 31: Appendix C – End Notes
Appendix C – End Notes 1 Insurance costs to insurance service revenues ratio, or Insurance Cost Ratio, is a ratio obtained by dividing GAAP Insurance Costs by GAAP Insurance Service Revenues. 2 Non-GAAP financial measure. See End Note 4, Slide 2 and Appendix A for more information about these non-GA
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