Hsenid Business Solutions Plc · CSELK:HBS.N0000
Hsenid Business Solutions — Q3 FY2024 Earnings Presentation
18 slides from Hsenid Business Solutions's earnings presentation, Feb 1, 2024
Slide 1: Quarterly Investor Forum 3Q FY2024
Quarterly Investor Forum 3Q FY2024 Page 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain forward-looking statements for which there are risks, uncertainties, and assumptions. Forward-looking statements may include any statements regarding strategies or plans for future operations; any statements concerning new features, enhancemen
Slide 3: HBS at a Glance
HBS at a Glance Offering a comprehensive $10 Bn+ TAM Seamless Connection to Third-Party Systems OpenAPIs to connect to third-party ERP, Accounting and range of HRIS solutions other software solutions Market Opportunity APAC and MEA Geared to Handle Large and Complex Organisations $3.0 Mn Exit ARR* L
Slide 4: 3Q FY2024 - At a Glance
3Q FY2024 - At a Glance Recurring Revenue LKR mn (Q1 FY22 to Q3 FY24) 300.0 250.0 Total exit ARR surpassed USD 3M 200.0 o Growing 12% QoQ and 42% YoY in USD cc 150.0 100.0 o Non-linear growth profile of ARR now visible 50.0 Continuous QoQ improvements in both 0.0 core-EBIT and core-EBITDA margin
Slide 5: Key Business Updates
Key Business Updates Product, Talent and recognitions received Product Development o Continued to investments in product localization for ASEAN markets o Completed payroll RPAs with MS Power Automate o Key feature additions to PeoplesHR Recruitment module Video sentiment analyser for interviews
Slide 6: Key Business Updates: Sales and Marketing
Key Business Updates Sales and Marketing Focus remains on transforming our sales function and building a global sales team o We continue to strengthen our sales teams in APAC and MEA markets o Increasing average deal size and securing deals with higher proportion of ARR are key priorities Market
Slide 7: New Deal Bookings
New Deal Bookings New Deal Bookings USD 0.5 Mn in New deal closures – down by 16% USD mn compared to 2Q FY24 o Primarily due to prolonged sales cycles for several high value 2.5 deals. However, it is anticipated that the backlog of these new deals will be closed in 4Q FY24. ~64% of new deals in
Slide 8: Quest to be the Most Preferred HR Tech Player in APAC and MEA
Quest to be the Most Preferred HR Tech Player in APAC and MEA On-Prem to Cloud shift trend continues; notable increment Sri Lanka generates majority revenue; MEA has picked in On-Prem revenues due to GoU project invoicing up due to GoU project invoicing 4% 15% 14% 9% 14% MEA Other † 22% 24% 24% 5% 2
Slide 9: Business Segments PHR On-Premise and Cloud
Business Segments PHR On-Premise revenues PHR On-Premise and Cloud LKR mn 3yr CAGR +0% (-17% in USD cc) 450 +3% YoY (+7% in USD cc) 375 PHR On-Premise revenues stabilizing with a 300 +33% QoQ boost (if any) coming from MEA new deal 225 (+35% in USD cc) closures. 150 o Slight increment of revenue i
Slide 10: Business Segments PHR Outsourcing and Tracking Solutions
Business Segments PHR Outsourcing and Tracking Solutions Tracking Solutions revenues PHR Outsourcing revenues LKR mn LKR mn 3yr CAGR +32% 150 (+34% in USD cc) 90 3yr CAGR +34% (+13% in USD cc) 120 75 60 90 +4% YoY (+9% in USD cc) +4% YoY (+12% in USD cc) 45 60 +23% QoQ (+30% in USD cc) +19% QoQ grow
Slide 11: Core exit ARR surpassed USD 3 Mn, 3yr CAGR of 31%
Core exit ARR surpassed USD 3 Mn Growing at 3yr CAGR of 31% Core-recurring† revenues reached 57% in 3Q FY24 Annual core recurring revenues LKR mn 800 3yr CAGR +31% 36% 700 42% 41% 48% 50% 57% 600 +34% YoY 500 (+42% USD cc) 400 +11% QoQ (+12% USD cc) 64% 59% 300 58% 52% 50% 43% 200 100 FY20 FY21 FY22
Slide 12: Revenue Drill Down
Revenue Drill Down 3Yr CAGR YoY growth All in LKR millions FY20 FY21 FY22 FY23 3Q FY23 3Q FY24 (in LKR / USD cc) (in LKR / USD cc) PHR Cloud 208 278 372 678 168 235 Recurring revenue 168 192 261 502 127 180 +48% / +21% +40% / +54% Non – Recurring revenue 41 86 111 176 41 55 PHR On-premise 359 374 40
Slide 13: Cost of Sales Drill Down
Cost of Sales Drill Down YoY All in LKR millions FY20 FY21 FY22 FY23 3Yr CAGR 3Q FY23 3Q FY24 growth On-site and third-party implementation 58 58 59 94 +18% 23 41 +77% costs† Infrastructure costs†† 25 34 53 170 +90% 50 43 -15% Cost of devices sold 25 28 54 64 +38% 14 16 +13% Mobile solutions related
Slide 14: Analysis of Normalized EBITDA
Analysis of Normalized EBITDA Normalised COGS Admin expenses†† S&M expenses††† EBITDA margin † as a % of Sales as a % of sales as a % of sales 56% 54% 29% 29% 26% 49% 50% 24% 25% 24% 24% 47% 43% 16% 16% 11% 13% 14% 8% 13% 12% 12% 12% -5% FY20 FY21 FY23 FY22 FY20 FY21 FY23 FY22 FY20 FY21 FY23 FY22 FY
Slide 15: Summarized Income Statements
Summarized Income Statements In LKR millions FY20 FY21 FY22 FY23 3Q FY24 Revenue 955 961 1,091 1,464 454 Gross profit 491 513 617 644 207 Gross profit margin 51% 53% 57% 44% 46% Normalised EBITDA 227 280 313 114 (21) Normalised EBITDA margin 24% 29% 29% 8% (5%) FX gain 11 27 287 71 (0) Net interest
Slide 16: Cash Position and IPO Fund Utilization
Cash Position and IPO Fund Utilization Cash position at ~LKR 1.2 bn IPO fund utilization at 49% LKR mn LKR mn 1,600 700 1,400 600 342 1,200 500 1,000 400 800 300 600 200 350 350 400 100 202 140 200 0 Market Product Potential Strategic Total 0 Development Development Acquisitions FY19 FY20 FY21 FY22†
Slide 17: Free Cash Flow Generation
Free Cash Flow Generation Annual free cash flow generation LKR mn 300 200 100 - (100) (200) (300) (400) FY20 FY21 FY22 FY23 1Q FY24† 2Q FY24† 3Q FY24† Operating cash flow Capex Free cash flow to the firm † Includes higher capex on product development, and negative impact from working capital Page 17
Slide 18: Q&A Session
Q&A Session You can use the Q&A functionality in zoom to send in your questions; OR ALTERNATIVELY Click on the "Raise your hand" button to be given an opportunity to unmute your microphone and pose your questions. Investor Relations Contacts Nilendra Weerasinghe – Chief Financial Officer +94 11 462
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