Td Synnex Corporation · NYSE:SNX
Td Synnex — Synnex — Investor Day (November 2020)
55 slides from Td Synnex's investor day presentation, Nov 2, 2020
Slide 1: Customer Experience (CX) Solutions Company Analyst Meeting November 2020
A CUSTOMER EXPERIENCE (CX) SOLUTIONS COMPANY Analyst Meeting November 2020 Exhibit 99.1
Slide 2: Our Presenters
Our Presenters Introduction Chris Caldwell CEO A performance driven and insightful leader who brought Concentrix into global prominence during 16+ years with SYNNEX, spearheading growth from staff of 25 to now more than 250,000 staff across the world SYNNEX EVP & Concentrix President; previously ser
Slide 3: Safe Harbor Statements
Safe Harbor Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include, but are not limited to, statements regarding the Company’s expected
Slide 4: Concentrix Overview & Strategy
Concentrix Overview & Strategy Chris Caldwell
Slide 5: Relationships Customers Clients
Relationships Customers Clients
Slide 6: What we believe
What we believe… Clients want fewer but deeper relationships with partners The line has blurred across distinct capabilities to “solutions” Barriers to entry and opportunities for growth continue to increase, favoring scale players Brands must distinguish themselves in the market with unique CX deli
Slide 7: What we do
Drive differentiated experiences for customers around the world cost effectively for disruptive and iconic brands Determine the Channel Design the Experience Power the Solution Measure for Improvement What we do… Innovation, Automation & Optimization Digital Self-Service Gig \ WAH \ Delivery Centers
Slide 8: Who we are
Revenue $4.7B Non-GAAP Op Margin 11.5% 96% client renewal rate 15 years average client tenure exceptional technology, digital, analytics, global delivery Top 2 global CX solutions provider 360o customer full lifecycle services (2) (1) Free Cash Flow $339M (2) (1) 2019 revenue; (2) 2019 non-GAAP Meas
Slide 9: Why invest
Strong Execution Market Leader Future Growth Only company in our industry to achieve our scale in 16 years Proven ability to drive strong financial returns Rebalancing portfolio toward strategic verticals, geographies Top 2 industry leader, tech-infused solutions, global scale advantage $85B+ core m
Slide 10: Agenda
Platform for performance Growth strategy Agenda Historical results Path to above market growth Allocation of capital Concentrix Overview & Strategy Financial Highlights
Slide 11: Successful Business Evolution into a Market Leader
Successful Business Evolution into a Market Leader Ideally Positions Concentrix for Future Growth 2020 + Establishing the CX Platform Transformation through Disruptive Acquisitions Ideally Positioned for Growth 2014 - 2019 Prior to 2014
Slide 12: Delivering Strong Revenue Growth and Margin Expansion
Delivering Strong Revenue Growth and Margin Expansion… 6.9% 11.5% Adj. Operating Income % +460 bps Strong Revenue Growth ($M) Margin Expansion Note: See Appendix for definitions of Non-GAAP measures and a reconciliation of such measures to GAAP. 62% CAGR ’12-’19
Slide 13: Rebalancing Portfolio to Improve Business Profile
…While Rebalancing Portfolio to Improve Business Profile… % Revenue Mix (1) 21% of revenue Communications & Media (1) Figures pro forma revenue for Convergys acquisition for FY2015-2018, actual for FY2019, projected for FY2020. Other Verticals
Slide 14: Gaining Share in Key Vertical Markets
…and Gaining Share in Key Vertical Markets Healthcare Banking, Financial Services & Insurance Retail, Travel, & eCommerce Technology & Consumer Electronics 7% 5-year CAGR 15% 5-year CAGR 5% 5-year CAGR 11% 5-year CAGR $372 $970 Notes: USD in millions. FY2015 based on pro forma revenue for Convergys
Slide 15: Our Scale is a Competitive Differentiator
Top 10 CX Players Our Scale is a Competitive Differentiator $4.7B ~1.6X next largest peer Benefits of Scale Investment in technology, security, and automation Consistent CX that leverages global footprint Lowers Client Total Cost of partner management Source: Company filings and other publicly avail
Slide 16: Global Footprint
Global consistency, local intimacy Operational excellence Robust redundant infrastructure 95% of world population languages spoken APAC ~173k staff North America ~27k staff EMEA ~25k staff Latin America ~25k staff Global Footprint Gig Platform Work at Home Global Delivery Centers
Slide 17: Enabling Leading Technology-Infused Solutions for over a Decade
2018 2014 2016 2013 2015 2017 2020 2005 2006 2008 2010 2007 2009 2011 2012 2019 Banking workflow automation & back office platform Social media care & forum moderation Security automation, fraud prevention UX, real-time intelligence, self-serve automation Process optimization, workflow automation K-
Slide 18: Serving Iconic Brands, Global Disruptors
Serving Iconic Brands, Global Disruptors Notes: Includes tenure with acquired companies; 2020 Fortune 500 list; 2019 Forbes Digital; 2019 Statista Internet Companies; 2020 People Keep US Insurance; 2020 Business Insider US Banks; 2018 Fortune Largest Automobile. Clients 40+ Fortune 100 95+ Fortune g
Slide 19: Delivering Value to Our Clients
Delivering Value to Our Clients Healthcare Company $1B Back office machine learning 16+ year relationship Reduction in mispayments past 3 years Retail & eCommerce Company 2.5X Transformed contact model through digital self-serve, chatbots & messaging NPS score improvement Fintech Company 35% Largest
Slide 20: Recognized as a Global Leader
Additional analyst rankings Leader in Forrester Omnichannel ranking #2 in HFS Top 10 Customer Engagement Operations Services ranking Leader in NelsonHall Digital Experience Consulting ranking Leader in Everest CX Analytics ranking Leader in NelsonHall Cognitive CX Services ranking Recognized as a Gl
Slide 21: Recognized as a Leading Employer
Recognized as a Leading Employer Our commitment to staff, diversity, culture and thought leadership makes us one of the most awarded and globally recognized companies in the industry People, Culture & Diversity Notes: Includes tenure with acquired companies; 2020 Fortune 500 list; 2019 Forbes Digita
Slide 22: Addressing COVID-19 Challenges
Supported our staff – in Q2 invested $52M for a safe environment and staff unable to work Achieved 100% productivity, ensuring business continuity for our clients Leveraging our virtual end-to-end infrastructure Virtual delivery model for hiring, developing and managing staff Technology and tools to
Slide 23: Strong Leadership Team with 380+ Years of Experience
Strong Leadership Team with 380+ Years of Experience ANDRE VALENTINE Chief Financial Officer 36 years 8 CORMAC TWOMEY EVP – Global Operations & Delivery 28 years 8 GUY BROSSEAU EVP – Information Systems & Security 36 years 8 8 PHILIP CASSIDY EVP – Strategic Projects & Corporate Strategy 30 years CHR
Slide 24: Highly Experienced Board of Directors
Highly Experienced Board of Directors 8 JENNIFER DEASON Director Jennifer is an expert in leading consumer-focused, technology-enabled businesses and has a deep well of experience in finance and operations TEH-CHIEN CHOU Director An expert in finance with substantial experience serving on public com
Slide 25: Agenda
Agenda Platform for performance Growth strategy Historical results Path to above market growth Allocation of capital Concentrix Overview & Strategy Financial Highlights
Slide 26: Market Opportunity
Market Opportunity $85B Core CRM market Growing at a ~3-5% CAGR over the next 3 years Only ~25% of the CRM market is outsourced today Addressable market beyond Core $315B+ Growing 8%+ over the next 3 years Overall “CX Solution” market $400B+ “CX Solution” Market Source: Everest, IDC, Gartner, HFS, M
Slide 27: Growing Importance of the Customer Experience
Growing Importance of the Customer Experience CX companies are becoming more critical in the ecosystem Customer Experience seen by CEOs as most effective method for creating competitive advantage (1) 84% of customers feel that experiences are as important as the actual products and services (2) 73%
Slide 28: Growth Strategy
Further invest in emerging markets Selectively pursue strategic acquisitions Relentlessly innovate, develop new digital solutions Expand wallet share through deeper client relationships Driving sustainable profitable growth Growth Strategy Organic Inorganic 1 2 3 4
Slide 29: Expand Wallet Share through Deeper Client Relationships
Our Client focus Differentiated brand experience High compliance and barriers to entry One-to-many Engineered obsolescence Grow with iconic brands and disruptor clients 9% 5-year CAGR in 4 key strategic verticals (1) 28% 5-year CAGR with global disruptor clients (1) 50 $1M+ new logos over the last y
Slide 30: Relentlessly Innovate, Develop New Digital Solutions
Focus on Technology-Infused Solutions 1M+ interactions automated annually 1,200+ software developers 500+ certified automation professionals 3.9B+ digital interactions annually (1) Digital interactions include automated interactions, agent assisted digital interactions, social, messaging, chat, emai
Slide 31: Further Invest in Emerging Markets
Leverage broad international reach to expand with multinational brands Grow with clients in regions they are growing, focusing on right clients, higher value services, digital offerings Investing in localized technology-infused solutions in emerging markets GROWTH DRIVER #3 Further Invest in Emergin
Slide 32: Selectively Pursue Strategic Acquisitions
Fragmented market Top 10 players make up only ~30% of the market today Well capitalized to continue to pursue complementary, value enhancing acquisitions New capabilities \ next-gen technologies Focused on Deep domain expertise \ ”franchises” New technology that enhances overall business Attractive
Slide 33: Executing a plan for above market growth
Executing a plan for above market growth Successful CX industry consolidator investing for innovation, expansion Well positioned for long term value creation Differentiating the customer experience Clients want fewer, deeper relationships with partners Concentrix able to capitalize on evolving marke
Slide 34: Financial Highlights
Financial Highlights Andre Valentine
Slide 35: Agenda
Agenda Platform for performance Growth strategy Historical results Path to above market growth Allocation of capital Concentrix Overview & Strategy Financial Highlights
Slide 36: Track Record of Revenue Growth, Margin Expansion, Cash Flow Generation
Track Record of Revenue Growth, Margin Expansion, Cash Flow Generation Strong Free Cash Flow (2) Strong Revenue Growth Operating Income Growth (1) EBITDA Margin Expansion (1) Growth 25.3% 23.8% 91.1% (1.6%) Margin Margin Note: USD in millions. Adjusted to exclude acquisition-related and integration
Slide 37: Revenue and Margin returning to Pre-COVID Trajectory
Revenue and Margin returning to Pre-COVID Trajectory Note: USD in millions. Adjusted to exclude acquisition-related and integration expenses, restructuring costs and stock compensation. See Appendix for definitions of Non-GAAP measures and a reconciliation of such measures to GAAP. COVID-19 impact b
Slide 38: Diversified Revenue Mix
Diversified Revenue Mix Geography Served Global disruptors 5-year CAGR at 28%(1) Client Type Delivery Shore Vertical Segment 4 key verticals 5-year CAGR at 9%(1) Note: Revenue for Q3 2020 LTM. Other includes automotive, government & public, utilities, other industries. CAGR based on pro forma revenu
Slide 39: Successful Strategic Acquisitions
Successful Strategic Acquisitions Power of combined client sets diversified revenue stream Turned around revenue decline Successful integration in less than 12 months Overachieved cost synergies by >30% Generated $650M+ free cash flow over 24 months Transformational acquisition Established Concentri
Slide 40: Agenda
Agenda Platform for performance Growth strategy Historical results Path to above market growth Allocation of capital Concentrix Overview & Strategy Financial Highlights
Slide 41: Path to Above Market Growth – Potential Impacts
Path to Above Market Growth – Potential Impacts Revenue Margin Organic growth Increases in high-growth verticals Wallet share gains via differentiated offerings, acquired client sets Disruptive acquisitions Well-capitalized to continue to pursue M&A Focused on driving strong financial returns Portfo
Slide 42: 2019 Revenue Growth Drivers
2019 Revenue Growth Drivers Key growth drivers: Portfolio rebalancing: (6%) YoY Growth with existing & new clients: +8% YoY Revenue Bridge 2018-2019 Note: USD in millions.
Slide 43: 2019 Margin Expansion Drivers
2019 Margin Expansion Drivers Key expansion drivers: Portfolio rebalancing Growth with existing & new clients Incremental synergies Adjusted EBITDA Bridge 2018-2019 (1) Note: USD in millions. Adjusted to exclude acquisition-related and integration expenses, restructuring costs, and the amortization
Slide 44: Path to Above Market Growth
Path to Above Market Growth Growth inhibitors: Portfolio rebalancing Planned erosion Future Revenue Growth Drivers Market growth Future Revenue Growth Existing Client Share Gain Geographic, Solution & Market Expansion Future M&A 2019 Revenue Growth ≥ Market Growth
Slide 45: Future Margin Expansion
Future Margin Expansion Growth inhibitors: COVID-19 Portfolio rebalancing Inflation Future Margin Expansion Drivers Growth in strategic verticals Growth in high value solutions G&A leverage Technology efficiencies Future M&A synergies Margin Expansion 14.4% Future EBITDA Margin 2019 EBITDA Margin
Slide 46: Business Outlook
Business Outlook Revenue: At least 2% year-over-year constant currency growth Profit: Non-GAAP operating income margin to exceed 12.5% Revenue: At or above-market organic growth Profit: Return to above pre-COVID margins Completion of acquisition synergies G&A leverage Cash Flow: Free cash flow to ap
Slide 47: Agenda
Agenda Platform for performance Growth strategy Historical results Path to above market growth Allocation of capital Concentrix Overview & Strategy Financial Highlights
Slide 48: Total Liquidity and Capital Structure Overview
Total Liquidity Cash and Cash Equivalents (1) $85 New Undrawn Revolver $600 New Undrawn A/R Securitization (2) ~$150 Total Debt New Revolver - New Term Loan A $900 New A/R Securitization (2) ~$200 Total Debt / Adj. EBITDA (3) 1.8x Net Debt / Adj. EBITDA (3) 1.6x Capital Structure Overview Strong liq
Slide 49: Capital Allocation Overview
Capital Allocation Overview Investments in Technology Investments in Key Verticals Strategic M&A Capex Disciplined Capex spend in line with 3.5% to 4% of revenue annually Investment in expansion and enhancing capabilities to drive organic growth M&A Disciplined M&A approach focused on transactions t
Slide 50: Attractive Financial Profile
Well positioned global leader in large, growing market Disciplined investments, superior execution driving share gains Generating strong free cash flow Substantial financial flexibility for organic, inorganic growth Poised for multiple expansion, enhanced shareholder returns IN SUMMARY Attractive Fi
Slide 51: Why Invest in Concentrix
Why Invest in Concentrix Concentrix is a Global CX Solutions Leader, Ideally Positioned for Growth Strong Execution Market Leader Future Growth Only company in our industry to achieve our scale in 16 years Proven ability to drive strong financial returns Rebalancing portfolio toward strategic vertic
Slide 52: Appendix
Appendix yy | CONCENTRIX il Rights Re 2d. $2 Different by Design’
Slide 53: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to disclosing financial results that are determined in accordance with GAAP, we also disclose certain non-GAAP financial information, including: Non-GAAP operating income, which is operating income, adjusted to exclude acquisition-related and integration expen
Slide 54: Historical Performance
Historical Performance Note: USD in millions. Adjusted to exclude acquisition-related and integration expenses, restructuring costs, stock compensation and amortization of intangible assets. Free Cash Flow calculation: Net cash provided by operating activities less capital expenditures. Fiscal Year
Slide 55: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation