Huron Consulting Group Inc. · NASDAQ:HURN
Huron Consulting — Q1 2022 Earnings Presentation
32 slides from Huron Consulting's earnings presentation, May 3, 2022
Slide 1: Huron Consulting Group Inc. Investor Presentation
HURON I 1 Huron Consulting Group Inc. Investor Presentation 2022 huronconsultinggroup.com © 2022 Huron Consulting Group Inc. and affiliates.
Slide 2: Forward-Looking Statements
HURON I 2 Forward-Looking Statements Statements in this presentation that are not historical in nature, including those concerning the company’s current expectations about its future results, are “forward-looking” statements as defined in Section 21E of the Securities Exchange Act of 1934, as amende
Slide 3: A clear and compelling investment thesis
HURON I 3 A clear and compelling investment thesis A PREEMINENT MEANINGFUL EXPANSION OF MATERIAL GLOBAL GROWTH STRONG CASH FLOW INDUSTRY EXPERTISE MARGIN EXPANSION CONSULTANCY AND OPPORTUNITY IN OUR AND BALANCE SHEET AND CAPABILITIES OPPORTUNITY DIGITAL PARTNER CORE INDUSTRIES Leading global Operati
Slide 4: Our Business
H UHRUORNO IN4I 4 Our Business © 2022 Huron Consulting Group Inc. and affiliates.
Slide 5: Huron is a preeminent global consultancy and technology partner
HURON I 5 Huron is a preeminent global consultancy and technology partner with deep industry focus and growing digital and managed services capabilities Global Footprint and Client Base 2021 Revenue Commercial 24% Healthcare $905.6M 49% Education 27% Nearly 40% 1,900+ 4,500+ of 2021 revenues derived
Slide 6: Integrating distinct industry focus and differentiated capability expertise
HURON I 6 Integrating our distinct industry focus and differentiated capability expertise to drive more consistent growth Industries of Focus Healthcare Education Financial Energy and Industrials and Public Services Utilities Manufacturing Sector Consulting and Managed Services Capabilities Mix incl
Slide 7: Focused execution on our growth strategy
HURON I 7 Focused execution on our growth strategy 1 Healthcare and Education Leading Market Positions In Two Critical revenues represented Industries 76% Commitment to Focus: Accelerating growth in Healthcare and Education of total company revenues in 2021 Delivering: ------------------------------
Slide 8: Driving our vision through five key ESG commitments
HURON I 8 Driving our vision through five key ESG commitments Illustrative Actions Taken in 2021 ADVANCING OUR We serve clients in industries that have a Established Huron Social Alliance to help address the need for broader CLIENTS’ significant impact on the health and well-being, educational acces
Slide 9: Healthcare
HURON I 9 Healthcare Huron is the leading trusted advisor to the healthcare industry What We Do Healthcare Segment Revenue 2021 On average, Non-Acute 90%+ of Care annual Performance Managed Digital Strategy and People Providers Healthcare Improvement Services Transformation Financial Advisory Transf
Slide 10: Education
HURON I 10 Education Huron is the leading trusted advisor to the education industry What We Do Education Segment Revenue 2021 Other 8% Administrative Unit Strategy and Research Student and Digital Business People or System Office Worked with 7% 4-Year Private Innovation Enterprise Alumni Strategy Tr
Slide 11: Commercial
HURON I 11 Commercial Huron is focused on commercial industries facing significant disruption and/or regulatory change What We Do Commercial Segment Revenue Personas of 2021 Focus: Other 21% • CEO Energy and • CFO Digital Strategy and Special Situation M&A, Capital Markets Utilities Consumer 18% • C
Slide 12: Built a $350M Digital platform since 2010
HURON I 12 Built a $350M Digital platform since 2010 through modest organic investments and $200M in deployed capital Expect to generate revenues in excess of $400M in 2022 1 Enterprise Resource Planning (ERP) Workday Innovation Specific to our Workday ERP business, grew our initial organic Partner
Slide 13: Our Market Opportunity
HURON I 13 Our Market Opportunity © 2022 Huron Consulting Group Inc. and affiliates.
Slide 14: Operating in a large, growing professional services industry
HURON I 14 Operating in a large, growing professional services industry with core end markets facing significant disruption and/or regulatory change Healthcare Education Expected Healthcare consulting and Total addressable market for $26B managed services $10B+ Huron’s Education ERP and addressable
Slide 15: Challenges and opportunities facing our core industries create tailwinds
HURON I 15 The challenges and opportunities facing our core industries create tailwinds in demand for Huron’s offerings Healthcare Education • Strained cost structures stemming from: • Increased governmental scrutiny while increasing funding for research agencies • Dramatic increases in labor costs
Slide 16: Challenges and opportunities facing our core capabilities create tailwinds
HURON I 16 The challenges and opportunities facing our core capabilities create tailwinds in demand for Huron’s offerings Digital Innosight Financial Advisory • Continued shift to the cloud and • Acceleration of disruptive • Disruptive events constraining digitization forces liquidity or impacting o
Slide 17: Our Growth Initiatives
HURON I 17 Our Growth Initiatives © 2022 Huron Consulting Group Inc. and affiliates.
Slide 18: Investing to deliver future growth in Healthcare
HURON I 18 Investing to deliver future growth in Healthcare OPPORTUNITIES THAT LIE AHEAD STRONG MOMENTUM TO DATE INNOVATING TO STRENGTHEN OUR BROADENING OUR CAPABILITIES AND LEADING MARKET POSITION SERVICE OFFERINGS • Expanded our client • Accelerating growth in revenue cycle • Further developing an
Slide 19: Investing to deliver future growth in Education
HURON I 19 Investing to deliver future growth in Education OPPORTUNITIES THAT LIE AHEAD STRONG MOMENTUM EXPANDING TO DATE STRENGTHENING OUR EXTENDING OUR CAPABILITIES IN LEADING MARKET LEADERSHIP POSITION STUDENT TO GROW POSITION IN RESEARCH IN DIGITAL MARKET SHARE • Significant growth in • Accelera
Slide 20: Investing to deliver future growth in our capabilities
HURON I 20 Investing to deliver future growth in our capabilities OPPORTUNITIES THAT LIE AHEAD STRONG MOMENTUM TO DATE DIGITAL INNOSIGHT FINANCIAL ADVISORY • Built a $350M Digital • Continuing to grow market • Deepening our industry • Gaining additional market share for our core digital expertise sh
Slide 21: Financial Outlook
HH UU RO RO N NI 2 I 12 1 Financial Outlook © 2022 Huron Consulting Group Inc. and affiliates.
Slide 22: FY 2021 results demonstrate strong momentum
HURON I 22 FY 2021 results demonstrate strong momentum despite continued significant pandemic-related headwinds COMPANYWIDE HIGHLIGHTS 7% ~50 bps 21% Adjusted EBITDA Revenue growth Adjusted EPS growth margin expansion year-over-year year-over-year year-over-year BUSINESS HIGHLIGHTS 9% 8% 6% Healthca
Slide 23: Building on our primary revenue drivers to achieve more consistent revenue growth
HURON I 23 Building on our primary revenue drivers to achieve more consistent revenue growth Organic revenue expected to drive low Revenue double-digit annual growth from 2022 to ($ in millions) 2025 Low double-digit annual growth • Strong market tailwinds create growth opportunities in each of our
Slide 24: Building on primary revenue drivers, including recurring revenue
HURON I 24 Building on our primary revenue drivers, including our foundation of recurring revenue, to drive consistent growth DEEP CLIENT MULTI-YEAR MANAGED SERVICES PRODUCTS AND ADDITIONAL RELATIONSHIPS TRANSFORMATIONS ACCELERATORS RECURRING REVENUE Multi-year managed MODELS Sticky client relations
Slide 25: Adjusted EBITDA margin on a trajectory to mid-teen % in 2025
HURON I 25 Adjusted EBITDA margin % is on a trajectory to achieve mid-teen % in 2025 Committed to annual expansion while Adjusted EBITDA Margin % maintaining flexibility to optimally Mid-teen manage the business % • Operating income margin expansion driven by improved 10.3% 10.8% utilization and pri
Slide 26: Healthy balance sheet and strong cash flows create flexibility
HURON I 26 Healthy balance sheet and strong cash flows create flexibility to return capital to shareholders and drive future growth Free Cash Flow Strategic capital deployment framework Free Cash Flow Yield $120 20% balances growth, flexibility and $120 $109 return of capital to shareholders $ in mi
Slide 27: Disciplined approach to M&A
HURON I 27 Disciplined approach to M&A will continue to provide opportunities to accelerate growth in adjacencies to our core business Recent Acquisition Criteria used to evaluate strategic tuck-ins: History • Aligns with our business strategy ($ in millions) $9 $45 • Expands our capabilities into a
Slide 28: Appendix
HURON I 28 Appendix © 2022 Huron Consulting Group Inc. and affiliates.
Slide 29: Use of Non-GAAP Financial Measures
HURON I 29 Use of Non-GAAP Financial Measures In evaluating the company’s financial performance and outlook, management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations, adjusted diluted earnings per share from continuing opera
Slide 30: Reconciliations of non-GAAP measures
HURON I 30 Reconciliations of non-GAAP measures Reconciliation of net income (loss) from continuing operations to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) (in millions) 2017 2018 2019 2020 2021 Revenues $ 733 $ 795 $ 877 $ 844 $ 906 Net income (loss) from cont
Slide 31: Reconciliations of non-GAAP measures
HURON I 31 Reconciliations of non-GAAP measures Reconciliation of net income (loss) from continuing operations to adjusted net income from continuing operations (in millions, except earnings per share) 2017 2018 2019 2020 2021 Net income (loss) from continuing operations $ (170) $ 14 $ 42 $ (24) $ 6
Slide 32: Reconciliations of non-GAAP measures
HURON I 32 Reconciliations of non-GAAP measures Reconciliation of cash from operating activities to free cash flow (in millions) 2018 2019 2020 2021 Cash from operating activities $ 102 $ 132 $ 137 $ 18 Less: Capital expenditures (15) (23) (17) (16) Free cash flow $ 87 $ 109 $ 120 $ 2 Add back: - -
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