Hsenid Business Solutions Plc · CSELK:HBS.N0000
Hsenid Business Solutions — Q1 FY2025 Earnings Presentation
22 slides from Hsenid Business Solutions's earnings presentation, August 2024
Slide 1: Quarterly Investor Forum 1Q FY2025
Quarterly Investor Forum 1Q FY2025
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, enhanceme
Slide 3: hSenidBiz | PeoplesHR at a Glance
hSenidBiz | PeoplesHR at a Glance $10 Bn+ TAM $3.5 Mn Exit ARR ~$3.5 Mn in Cash* Market Opportunity APAC and Exit Annualised Recurring Revenue Earmarked for product and market MEA as at end 1Q FY2025 development subject to adjustment from cash dividend distribution 1675+ Customers 50% ARR Growth ~$0
Slide 4: PeoplesHR is poised to be the Most Preferred HR Tech Solution in Emerging Markets
PeoplesHR is poised to be the Most Preferred HR Tech Solution in Emerging Markets ► Hire-to-retire HR Tech Platform which thrives in digitalizing complex business processes in Human Resource Management ► Robust CoreHR, Time & Attendance and Payroll Engine with strong focus on statutory compliance an
Slide 5: Quarter at a Glance
Quarter at a Glance Core Exit ARR (Q2 FY23 to Q1 FY25) ► Revenue of LKR 466 Mn USD Mn 3.55 3.5 ♦ Growth of 30% YoY 3.12 3.02 3 2.73 ► Total Exit ARR surpassed USD 3.5 Mn 2.5 2.34 ♦ Growth of 50% YoY & 17% QoQ 2.02 2.09 2 1.91 ► Earnings margins of Q1 declined 1.5 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ♦ Higher Par
Slide 6: Key Business Updates
Key Business Updates Product Development & Engineering ♦ Transformation of Engineering Team to SAFe Agile Practices ♦ Product Stabilization with Security Fixes ♦ 9.6 Version Release for new customers in Sri Lanka and the Philippines ♦ Completion of localization activities for Indonesia Talent Update
Slide 7: Key Business Updates
Key Business Updates Sales Update ♦ Talent acquisition focused on pre-sales, sales and post-sales functions ♦ Focus on continuously increasing ACV by targeting enterprise customers in focus markets ♦ Revisiting product pricing and packaging strategy to improve ACV ♦ On boarded new partners to get ac
Slide 8: New Deal Bookings
New Deal Bookings New Deal Bookings USD Mn ► USD 357,482 new deal closures in Q1 3.5 ♦ Up by 44% compared to 1Q FY24 3.0 ► Sri Lanka & SEA accounted for the 2.5 majority of new deals in Q1 ♦ 48% originated from Sri Lanka 2.0 while 36% originated from SEA 1.5 ► PHR Cloud accounted for ~88% of 1.0 new
Slide 9: Revenue Compositions
Revenue Compositions ► PHR Cloud continued to drive >50% revenues ► APAC revenue contribution increases, with Sri Lanka remaining the largest contributor Product Breakdown Geographical Breakdown 9% 11% 15% 14% 14% 5% 17% 21% 6% 26% 4% 5% 9% 7% 9% 10% 30% 25% 23.6% 26% 28% 25% 25% 37% 54% 51% 58% 46%
Slide 10: Business Segments
Business Segments PHR Cloud and On-Premise PHR Cloud Revenue PHR On-Premise Revenue LKR Mn LKR Mn 450 3yr CAGR +1% 1200 3yr CAGR +48% 900 300 600 +178% YoY (+206% in USD cc) +27% YoY (+31% in USD cc) 150 300 0 0 FY22 FY23 FY24 Q1 Q4 Q1 FY22 FY23 FY24 Q1 Q4 Q1 FY24 FY24 FY25 FY24 FY24 FY25 ► PHR Clou
Slide 11: Business Segments
Business Segments PHR Tracking Solutions and Outsourcing PHR Tracking Solutions Revenue PHR Outsourcing Revenue LKR Mn LKR Mn 3yr CAGR +30% 150 100 3yr CAGR +27% 75 100 +22% YoY (+21% in USD cc) 50 +35% YoY (+38% in USD cc) 50 25 0 0 FY22 FY23 FY24 Q1 Q4 Q1 FY22 FY23 FY24 Q1 Q4 Q1 FY24 FY24 FY25 FY2
Slide 12: Core Recurring Revenue
Core Recurring Revenue Core Recurring Revenue Composition Annual Core Recurring Revenue Composition LKR Mn 1000 3yr CAGR +29% 43% 47% 45% 42% 58% 52% 800 600 57% 58% 400 +22% YoY (+21% in USD cc) 53% 55% 42% 48% 200 FY22 FY23 FY24 1Q 4Q 1Q 0 FY24 FY24 FY25 FY22 FY23 FY24 1Q 4Q 1Q Core - Recurring No
Slide 13: Revenue Drill Down
Revenue Drill Down 3Yr CAGR YoY growth All in LKR millions FY22 FY23 FY24 1Q FY24 4Q FY24 1Q FY25 (in LKR / USDcc) (in LKR / USD cc) PHR Cloud 372 678 893 186 250 236 Recurring revenue 261 502 670 135 188 195 +48% / +20% +27% / +31% Non – Recurring revenue 111 176 222 50 62 40 PHR On-premise 408 362
Slide 14: Cost of Sales Drill Down
Cost of Sales Drill Down YoY All in LKR millions FY22 FY23 FY24 3Yr CAGR 1Q FY24 4Q FY24 1Q FY25 growth On-site and third-party implementation costs† 59 94 150 +37% 34 30 24 -30% Infrastructure costs†† 53 170 162 +69% 40 43 40 +1% Cost of devices sold 54 64 49 +20% 8 16 12 +41% Mobile solutions rela
Slide 15: Analysis Normalised EBITDA Margin
Analysis Normalised EBITDA Margin Normalised EBITDA Margin † Expenses as a % of Revenue 17% 30% 21% 26% 12% 31% 29% 26% 12% 24% 9% 15% 69% 55% 59% 57% 43% -9% -10% -18% FY22 FY23 FY24 1Q 1Q FY24 FY25 FY22 FY23 FY24 1Q 1Q FY24 FY25 COGS†† Admin Expenses††† S&M Expenses†††† ► 3yr CAGR +30% ► 3yr CAGR
Slide 16: Summarized Income Statements
Summarized Income Statements 1Q In LKR millions FY22 FY23 FY24 FY25 Revenue 1,091 1,464 1,645 466 Gross profit 617 644 665 199 Gross profit margin 57% 44% 40% 43% Normalised EBITDA 329 138 (148) (45) Normalised EBITDA margin 30% 9% -9% -10% FX gain 287 71 (65) 15 Net interest income 27 188 139 15 Pr
Slide 17: Cash Position and IPO Fund Utilization
Cash Position and IPO Fund Utilization Cash Position IPO Fund Utilization LKR Mn LKR Mn 1600 700 1400 600 1200 500 342 1000 400 800 300 600 200 350 350 400 100 202 140 200 0 Market Development Product Potential Strategic Total 0 Initiatives Development Acquisitions FY22 FY23† FY24† 1Q FY25 Initiativ
Slide 18: Free Cash Flow Generation
Free Cash Flow Generation 300 15% 200 10% 100 5% 0 0% -100 -5% -200 -10% -300 -15% -400 -20% -500 -25% -600 -30% FY21 FY22 FY23 FY24 1Q FY25 Operating Cash Flow Capex & Lease Payments Free Cash Flow to the Firm FCFF Margin † FCFF = Net operating cash flow – Capital expenditure – Lease payments Page
Slide 19: Peer HCM and SaaS company benchmarking
Peer HCM and SaaS company benchmarking (For the last reported Financial Year) HCM Peers SaaS Peers 48% 21% 25% ††† ††† ARR Growth 111% 143% 181% ††† ††† GTM Efficiency Ratio NRR 101% 102% 109% † ††† ††† (Net Revenue Retention) 2% 4% N/R ††† Revenue Churn Rate ♦ Analysis of HCM Peers includes ATOSS,
Slide 20: Corporate Actions During the Quarter (1/2)
Corporate Actions During the Quarter (1/2) Reallocation of IPO funds raised for M&A ► M&A opportunities in the HR Tech space would typically be priced at a premium to trading multiples ♦ HR Tech sector trades at 4.9x EV/Rev † as at June 2024; HBS traded at 1.4x EV/Rev as at June 30, 2024 ♦ M&A tar
Slide 21: Corporate Actions During the Quarter (2/2)
Corporate Actions During the Quarter (2/2) Dividend Distribution ► Considering the initial results of organic growth activities and expected FCF generation in the future, excess cash on the balance sheet to be distributed to shareholders via special dividend ► Dividend distribution will present sh
Slide 22: Investor Forum
Investor Forum Join us for the Investor Forum Q&A Session 7th of August, 2024 for Q1 FY2025 3.00 pm IST 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 quest
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