Hinduja Global Solutions Limited · NSE:HGS
Hinduja Global Solutions — Edelweiss Investor Conference (February 2019)
45 slides from Hinduja Global Solutions's conference presentation, Feb 13, 2019
Slide 1: Hinduja Global Solutions
HG$ HINDUJA GLOBAL SOLUTIONS February 13, 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: Investor Confer
Slide 2: Investor Presentation Feb, 2019
Investor Presentation Feb, 2019 February 13th 2019
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: YTD Dec'18 Financial Snapshot
YTD Dec’18 Financial Snapshot
Slide 5: About the Company
About the Company HISTORY Part of the Hinduja Group, in the BPM business since 2000 Erstwhile HTMT, IT & BPM business demerged October 1, 2006 Rebranded as HGS in 2008 FINANCIAL DETAILS (FY’18 & YTD Dec FY’19) SNAPSHOTS FY’18 YTD Dec FY’19 CAGR of 10.5% in Revenue (In INR) over FY 13-18. Rev
Slide 6: HGS Financial Performance: YTD FY19 Impact of Acquisitions
HGS Financial Performance : YTD FY 19 Impact of Acquisitions Quarterly Performance - consolidated Axis Point Health (APH) Fig in Rs Mn unless otherwise mentioned Q1 FY 19 Q2 FY 19 Q3 FY 19 YTD FY 19 • Acquired in early April 2018, to enter the large Clinical Segment Revenue from operations 10,173 10
Slide 7: HGS Overview
CHGS HINDUJA GLOBAL SOLUTIONS
Slide 8: HGS Core Capabilities to Enable the Unified Customer Experience
HGS Core Capabilities to Enable the Unified Customer Experience Analytics Customer Experience Customer Marketing Digital Enablement Assessment Experience and Digital Customer Experience Strategy Enablement Social Media Strategy Services Services Engagement Digital Experience Digital Marketing Strate
Slide 9: Diversified business portfolio
Diversified business portfolio Healthcare/ Insurance Telecommunications Consumer Products Financial Services 58 Million transactions, 10 Providing extensive consumer Supporting many consumer Only credit card issuer to win Million calls, 2.7 Million emails support for land lines, electronics
Slide 10: Verticalise Focus
HGS’ approach VERTICALISE FOCUS Healthcare on Consumer Solutions 8 Practice areas with deep domain Brilliant at Basics expertise Expansion of digital & clinical Traditional + eCare Solutions transformative capabilities 9 9 HGS Confidential – www.teamhgs.com HGS Confidential – www.teamhgs.com Driving
Slide 11: Offerings
Offerings Largest investment in E-Care Digi, Social, RPA, innovation, largest CAGR Bots, machine M learning a r Target existing users in Classic Care g champion-challenger sales Traditional voice, chat, email i n s Shortest sales cycle (retain or more of Brilliant at Basics NPS, KPIs, guarantees, wo
Slide 12: E-Care and Classic Care: Solutions and Industry Focus
Solutions and Industry Focus Engage Buy Care Bill Warrant Retain E-Care Emerging digital buyer B-C, B-B-C Classic Care Select deals based on “land & expand” Travel, hospitality, logistics, Late adopters, Smaller enterprises retail, selective tech prospects, insurance & large Traditional
Slide 13: Building Capability CoEs
Building Capability CoEs ANALYTICS DIGITAL AUTOMATION CoE CoE CoE Interaction Analytics services Launch of DigiCX services suite BOTs deployed across clients institutionalized Partnerships with platforms such Capability built on multiple Bringing Right Skill-set for as Liveperson, Sprink
Slide 14: Realigning Organization to Partner through Innovation to impact Outcomes
Realigning Organization to Partner through Innovation to impact Outcomes Verticalized business Global Innovation Hub Acquire/Partner for Capabilities Global Operations Digital Innovation Population Health Management Social Media Marketing One HGS- seamless delivery RPA Customer Journey Analytics Hea
Slide 15: BPO/BPM Market
BPO/BPM Market
Slide 16: The BPO/BPM Marketplace
The BPO/BPM Marketplace Marketplace Dynamics Demand Environment Total BPM market is over $160 billion In-house BPM 4 times the size of the outsourced BPM market Next 5 year CAGR for BPM expected to be 5.9% (Gartner Q1, 2013 forecast) Billion Dollar Plus players in this are still only a handf
Slide 17: Global BPO/BPM Market: Industry Estimates for Growth
Global BPO/BPM Market: Industry Estimates for Growth Global BPO Market Global BPO Market by Geo 11.5 193 10.6 183 9.8 23.9 9.1 22.9 174 8.1 22.1 166 In Billions of $ 8.3 21.4 158 20.2 In Billions of $ 153 18.5 40.8 39.1 37.5 36 36.3 35.5 110.6 116.7 99.9 104.9 89.7 94.7 2015 2016 2017 2018 2019 2020
Slide 18: North America BPO Spending Macro Market Overview
North America BPO Spending Macro Market Overview U.S. BPO End-User Spending Canada BPO End-User Spending (US$ bn) (US$ bn) 105.6 5.0 90.4 85.5 4.2 4.2 In Billions of $ In Billions of $ 2015 2016 2019 2015 2016 2019 Gartner Forecast: IT Services by Geography, 2014-2020 17 HGS Confidential – www.teamh
Slide 19: Europe – UK BPO Spending Macro Market Overview
Europe – UK BPO Spending Macro Market Overview Europe BPO End User Spending market Europe BPO End User Spend Forecast – by BPO Segment (US$ bn) 37.5 100% 80% 11.5 13.4 In Billions of $ 60% 40% 34.9 23.3 25.7 20% 34.1 0% 2015 2020 2015 2016 2019 Traditonal BPO BPaaS UK BPO End User Spending market UK
Slide 20: Healthcare Practice overview
Healthcare Practice overview
Slide 21: How HGS Healthcare business has grown
How HGS Healthcare business has grown HGS Healthcare Vertical Trend Total Healthcare Revenue (USD Mn) % of total Revenue 52.4% 49.2% 45.8% 41.7% 34.9% 356 26.2% 25.9% 27.8% 23.8% 22.4% 24.7% 21.3% 294 254 211 160 115 90 Acquired 73 61 41 49 Acquired 34 Colibrium Acquired EBOS FY 08 FY 09 FY 10 FY 11
Slide 22: Healthcare Revenue by Segment
Healthcare Revenue by Segment Healthcare Segmentations 9.5 46.4 5.2 32.6 Figures in USD Mn 12.6 25.8 14.7 17.1 9.5 283.9 255.8 215.8 10.6 179.7 150.2 103.9 FY 14 FY 15 FY 16 FY 17 FY 18 YTD Dec FY 19 Healthcare Payer Healthcare Provider Healthcare Platform Healthcare Clinical Services Annualized 21
Slide 23: Healthcare Practice reorganized to focus on solutions that matter to our clients
Healthcare Practice reorganized to focus on solutions that matter to our clients Payer Provider Services Services Provider Data Claim Management Payment Integrity Quality, Risk A/R Services Clinical Coding Healthcare Engagement Solutions 22 22 HGS Confidential – www.teamhgs.com HGS Confidential – ww
Slide 24: Payer Practices
Payer Practices Payer Services Expertise in both US and international claims handling Claims Point solutions for inventory control, quality and rework reduction Industry benchmarks established Proprietary technology led solutions for keeping provider data accurate and current Provider Data
Slide 25: Practices Across Payer and Provider
Practices Across Payer and Provider Payer Offshore and nearshore locations, meet and exceed client onshore NPS Services Healthcare Digital channel engagement mix increased by 10-15% (chat, automated Engagement Solution messaging) Interaction analytics capability Deliver 2x ROI through case,
Slide 26: Digital and Automation/RPA
Digital and Automation/RPA
Slide 27: HGS is developing industry leading Digital Customer Experience solutions
HGS is developing industry leading Digital Customer Experience solutions, creating value for our clients, and their customers Enabling the Optimized Consumer Journey… with clear objectives in mind Revenue generation and Kiosk Voice optimization Customer Experience – with In-person IVR NPS/RTF meas
Slide 28: The Automated Enterprise
The Automated Enterprise Automation everywhere enables each touchpoint through the digital end-to-end journey Virtual Agent Insights (chat, text, social) (Reporting, dashboards, analytics) Live Agent (Navigation, Customer ID, Policy Accurate IntelliFORM Compliance) Record (email) Updating (Real-ti
Slide 29: What does it mean for our Business - Opportunities
What does it mean for our Business - Opportunities AI will help BPaaS penetrate into the core, “heart of the business” processes Current scope of BPM/ AI to expand the scope of BPaaS BPM/ BPaaS 2-3x Core Back Core Back Mid-Office Mid-Office Processes Office Processes Office 1 As a multiple of curren
Slide 30: Key Highlights of HGS Process Automation Solution
Key Highlights of HGS Process Automation Solution Easy to set-up + Easy to use & change = High returns No need to Replace - uses Easy to Train - can work 24/7 15-50% Cost reduction existing enterprise applications and does not quit 50-75% TAT reduction No need to Integrate - Non- Easy to Run - keeps
Slide 31: Financial Overview
OHIGS Financial Overview HINDUJA GLOBAL SOLUTIONS
Slide 32: Q3 FY19 Actuals vs Q2 FY19 vs Q3 FY18 – Without Acquisitions
Q3 FY 19 Actuals vs Q2 FY 19 vs Q3 FY 18 Actuals – Without Acquisitions Quarterly Performance - Consolidated (Without Acquisitions) Figures in Rs Mn unless otherwise indicated Actual Actual Growth Actual YoY QE Dec'18 QE Sept'18 % QE Dec'17 Growth % Revenue 11,690 10,874 8% 9,757 20% Operating Costs
Slide 33: Q3 FY19 Actuals vs Q2 FY19 vs Q3 FY18 – With Acquisitions
Q3 FY 19 Actuals vs Q2 FY 19 vs Q3 FY 18 Actuals – With Acquisitions Quarterly Performance - Consolidated (With Acquisitions) Figures in Rs Mn unless otherwise indicated Actual Actual Growth Actual YoY QE Dec'18 QE Sept'18 % QE Dec'17 Growth % Revenue from operations 12,415 11,586 9,757 Other Operat
Slide 34: Free Cash Flow to EBITDA Conversion
Free Cash Flow to EBITDA Conversion FREE CASH FLOW to EBITDA Ratio EBITDA FCF/EBITDA (%) Figures in (INR Mn) 4,424 4,061 3,219 3,173 48% 3,130 47% 31% 21% -4% -26% 2,923 FY 14 FY 15 FY 16 FY 17 FY 18 YTD Dec'18 YTD Dec’18 Free Cash flow excludes the impact of Tax refund of Rs 111 Mn and Purchase of
Slide 35: Summary Cash Flow Statement
Summary Cash Flow Statement (Rs. Million) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 9M FY 19 Cash flow from Operations and after working capital 2,352 1,924 1,589 4,031 3,517 1,819 changes Cash Flow due to Capex (net) (1,137) (1,621) (2,472) (1,779) (1,261) (1132) Total Cash Flow from Operations and R
Slide 36: Business ROCE
Business ROCE Average Capital Employed (Rs mn) Business ROCE % 18.6% 15.4% 17.0% 14.4% 14.6% 14.3% 11.7% 17,071 17,145 17,464 17,834 19,082 20,116 20,320 Q1 FY 18 Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 35 35 HGS Confidential – www.teamhgs.com HGS Confidential – www.teamhgs.com Driving
Slide 37: Summary Financial Profile – As at 31st December 2018
Summary Financial Profile – As at 31st December 2018 HGSL Particulars Rs. USD Net Worth (in millions) 15,965 229.4 Book value per share 766 11.0 Book Value taken is as reported on QE December 2018 Price per share 603.0 8.5 Stock prices and USD/INR exchange rate latest available prices Dividend p
Slide 38: HGS Revenue Profile: FY14 to YTD Dec 18
HGS Revenue Profile: FY 14 to YTD Dec 18
Slide 39: How have we grown
How have we grown Acquired Business Revenue Revenue Trend (In INR Mn.) Core Business Revenue 38,494 37,110 33,282 35,321 28,076 25,048 10,762 10,587 9,645 12,498 8,544 8,713 26,348 27,907 23,637 22,823 16,335 19,532 FY 14 FY 15 FY 16 FY 17 FY 18 YTD Dec FY 19 38 38 HGS Confidential – www.teamhgs.com
Slide 40: Revenue Composition
Revenue Composition Revenue by Verticals Offshore/Near-shore to Onshore Onshore Offshore/Nearshore Telecom & Technology Consumer Products Healthcare BFS Others 16.1% 15.3% 11.7% 9.9% 10.0% 9.0% 6.9% 7.3% 8.0% 7.8% 8.0% 7.8% 37.0% 39.7% 42.3% 44.3% 46.5% 47.0% 27.8% 34.9% 41.8% 45.9% 49.2% 52.4% 15.9
Slide 41: Revenue Composition
Revenue Composition Revenue by Delivery Revenue by Originations INR USD GBP CAD India Philippines USA UK Canada Jamaica 1.9% 3.3% 4.7% 4.2% 17.7% 12.2% 10.3% 9.9% 12.0% 12.7% 10.6% 10.2% 12.0% 22.4% 22.4% 17.7% 8.6% 6.9% 8.6% 6.9% 6.1% 10.5% 6.1% 10.5% 10.6% 10.6% 9.8% 9.8% 25.2% 25.1% 26.8% 32.3% 2
Slide 42: Revenue Composition
Revenue Composition Voice to Non-Voice Mix OPEX seats & Owned Seats Voice CRM Transaction processing Digital CRM Owned Seats Seat for Opex 22.4% 21.2% 19.8% 2% 3% 3% 4% 4% 16.9% 6% 16.4% 19% 21% 23% 24% 24% 7,243 8,817 9,507 10,260 23% 6,856 79% 34,956 35,637 35,690 35,372 35,557 77% 74% 73% 73% 71%
Slide 43: Revenue Composition: Client Concentration
Revenue Composition Client Concentration Top Client Top 5 Clients Top 20 Clients 78% 77% 75% 73% 72% 71% 50% 50% 51% 46% 46% 48% 16% 18% 18% 17% 13% 15% FY 14 FY 15 FY 16 FY 17 FY 18 YTD Dec FY 19 42 42 HGS Confidential – www.teamhgs.com HGS Confidential – www.teamhgs.com Driving February Results. 1
Slide 44: Strong and Tenured Client Relationships
Strong and Tenured Client Relationships 17% Top Client 29% Others Top 20 clients Client contribute 71% of the Concentration Total Revenue 12% Clients 11-20 31% 11% Clients 2-5 * Based on YTD Dec FY’19 Financials Clients 6-10 Strong Client relationships demonstrated by tenured and multi- geography en
Slide 45: Thank You
OHG Thank You
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