Hinduja Global Solutions Limited · NSE:HGS
Hinduja Global Solutions — Kotak Private Client Group investor meet (November 2019)
35 slides from Hinduja Global Solutions's conference presentation, Nov 28, 2019
Slide 1: Analyst and Investor Meet - November 28, 2019
,HGS HINDUJA GLOBAL SOLUTIONS November 28, 2019 BSE Limited National Stock Exchange of India Ltd. Corporate Relation Dept. "Exchange Plaza", P. J. Towers, Dalal Street Bandra Kurla Complex, Bandra (East) Mumbai 400 001. Mumbai - 400 051. Scrip Code: 532859 Symbol :HGS Dear Sirs, Sub: Analyst and Inv
Slide 2: Presentation Nov 28th 2019
Presentation Nov 28th 2019 | 1
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: Quick Overview
CHGS Quick Overview
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’19 & H1 FY’20) SNAPSHOTS FY’19 H1 FY’20 (Post IndAS 116) ▪ CAGR of 14.0 % in Revenue (In INR) over FY 14
Slide 6: HGS Overview
CHGS HGS Overview
Slide 7: HGS Core Capabilities
HGS Core Capabilities 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 Strategy Customer Interaction Transformation Voi
Slide 8: The Global BPM Market
The Global BPM Market… Global BPM Spending ($Bn) Traditional BPM market dominates the BPM market Global BPM Services Forecast ($Bn) 188.5 197.3 206.7 161.2 172.2 180.1 62.0 46.9 2017 2018 2019 2020 2021 2022 125.2 144.7 Source: Gartner Service line Forecast 2018 Q1 2018 2022 Traditional BPO BPaaS |
Slide 9: Healthcare Practice Overview
Healthcare Practice Overview | 8
Slide 10: HGS Healthcare Journey
HGS Healthcare Journey 2016-2018 Acquisition of Colibrium – Sales and Enrollment Platform 2008-2011 2003 Acquisition of APH - Population Health Solutions Product Build Workers Comp Acquisition of Element - Customer Experience Enrolment Payment Integrity Management Solutions Geo expansion (Philippine
Slide 11: Healthcare in Numbers: Financial Performance
Financial Performance Revenue (INR Mn) 25,144 Acquired Healthcare in Numbers 2,739 Business 19+ Years 22,405 Core 13,881 17,036 18,932 Business 5 Delivery Geos 9,792 2015 2016 2017 2018 2019 47 Clients 19,900 Employees 157% growth between FY 15 and FY 19 ▪ FY19 Growth in Healthcare Portfolio: 32.8%
Slide 12: HGS Recognized as a Leading Partner in Healthcare Payer, Workers Compensation
HGS Recognized as a Leading Partner in Healthcare Payer, Workers Compensation Gaining Credibility ▪ The prestigious NCQA Accreditation for Population ▪ NCQA Accreditation for Case Management assures Health and Disease Management Programs industry best practices implementation for clinical deployed f
Slide 13: CES - Innovating in Core Customer Service
CES - Innovating in Core Customer Service | 12
Slide 14: 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 15: HGS Consumer Journey Framework Solves Client Problems
HGS Consumer Journey Framework Solves Client Problems Educate buyers to increase client revenue and improve share of buyer wallet CUSTOMER STAGES Returns/ Awareness Research Buy Use Service Retention Warranty Acquire Support Retain SOLUTION HGS Engage Buy Bill Care Repair Retain “Attract new “Increa
Slide 16: Workplace Flexibility Enhancing Employee Experience
Workplace Flexibility Enhancing Employee Experience More than one third (36 percent) of U.S. HGS Work@Home Expansion Feeds Off workers… Demand for More Flexible Work-Life Balance U.S. Workforce HGS W@H Agent Positions 1200 Online 800 Freelance Workers, 36% 400 0 Source: Forbes, Aug 31, 2018, quoting
Slide 17: Differentiating Thought Leadership in Social Care
Differentiating Thought Leadership in Social Care “HGS has developed an industry-leading social media and employee recruitment model. The company has built a world-class talent profile for hiring the agents best suited for social media work. The profile and recruitment model are both clear competiti
Slide 18: The HGS Story in Numbers
The HGS Story… in Numbers (33.6% Revenue contribution by Non-Voice) Channel Mix Digital CRM Transaction processing Voice CRM 76.5% 73.7% 72.7% 72.7% 67.8% 66.4% Our platform revenues crossed the $100-million mark in FY2019 23.4% 23.8% 23.8% 25.0% 25.5% 21.0% 7.2% 8.1% 2.5% 2.9% 3.5% 3.5% FY 15 FY 16
Slide 19: Financial Overview
CHGS Financial Overview
Slide 20: H1 Revenue Growth: 14.2%
H1 Revenue Growth: 14.2 % H1 FY 19 vs H1 FY 20 Growth (In INR Mn) 14.2% 0.9% (1.9%) 15.3% 25,811 22,595 H1 FY 19 Organic Growth FX Impact Sale of GuidePoint H1 FY 20 | 19
Slide 21: H1 EBITDA Growth
H1 EBITDA Growth: Pre IndAS 116 : 59.7% Post IndAS 116 : 112.8% H1 FY 19 vs H1 FY 20 Growth (In INR Mn) 112.8% 59.7% 800 83 341 476 3,207 2,407 1,507 H1 FY 19 Core Business Improvement in Improvement in H1 FY 20 IndAS 116 Reported Improvement Element Axis Point (Pre IndAS 116) Impact Health | 20
Slide 22: H1 PAT Growth: 5.3%
H1 PAT Growth: 5.3% H1 FY 19 vs H1 FY 20 Growth Include One-off (In INR Mn) item of Rs. 119 Mn ( 187 ) 5.3% ( 580 ) 1,663 1,248 896 H1 FY 19 H1 FY 20 PBT IndAS 116 Tax Reported PBT (Pre IndAS 116) Impact PAT | 21
Slide 23: DSO Days Improvement
DSO Days Improvement DSO (In Days) 84 82 80 77 73 71 Q1 FY 19 Q2 FY 19 Q3 FY 19 Q4 FY 19 Q1 FY 20 Q2 FY 20 | 22
Slide 24: EBITDA/FCF conversion: Rs 8,321 mn FCF in last 3.5 Years
EBITDA/FCF conversion: Rs 8,321 mn FCF in last 3.5 Years Figures in (INR Mn) EBITDA FCF/EBITDA (%) 134% 48% 47% 2% -26% 3,130 4,424 4,061 4,411 3,207 FY 16 FY 17 FY 18 FY 19 H1 FY 20 | 23
Slide 25: Debt Details
Debt Details Gross Debt, Net Debt & Cash (In INR Mn) Gross Debt Cash Net Debt: 1,293 Net Debt: 1,761 Net Cash: 298 5,546 5,996 5,726 6,024 4,253 4,235 QE Sept 18 QE Mar 19 QE Sept 19 | 24
Slide 26: Debt of Rs 5,726 mn Composition
Debt of Rs 5,726 mn: 53 % are Term Loans Total Capital Lease, 1% Repayable by 2022 Total Term Loans, 27% Total Working Capital Loans, 46% Total ECB Loan, 25% Repayable by 2024 As at 30th Sep 2019 | 25
Slide 27: Business ROCE: Excellent improvement
Business ROCE: Excellent improvement Average Capital Employed (Rs mn) Business ROCE % 17.1% 16.9% 16.3% 14.2% 11.9% 14.8% 26,438 19,995 21,529 15,874 17,076 17,434 FY 16 FY 17 FY 18 FY 19 H1 FY 20 H1 FY 20 Pre IndAS 116 Post IndAS 116 Increase in Capital employed in FY 20 is due to impact of IndAS 1
Slide 28: Forward Cover
Forward Cover Forward Cover - India Forward Cover (In USD) FC Rate 80.84 80.87 79.31 77.53 75.20 74.57 74.87 75.48 75.49 74.21 73.18 72.94 24.0 24.0 24.0 24.0 23.0 20.0 12.5 7.5 7.5 8.0 8.0 7.5 Q3 FY 20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 | 27
Slide 29: Summary Financial Profile – As at 30th September 2019
Summary Financial Profile – As at 30th September 2019 HGSL Particulars Rs. USD Net Worth (in millions) 16,641 235.5 ➢ Book Value taken is as reported on QE September 2019 Book value per share 798 11.3 ➢ Stock prices and USD/INR exchange rate latest available Price per share 599.0 8.4 prices Dividend
Slide 30: HGS Revenue Profile: FY15 to H1 FY20
HGS Revenue Profile: FY 15 to H1 FY 20 | 29
Slide 31: Revenue Composition
Revenue Composition Revenue by Verticals Offshore/Near-shore to Onshore Onshore Offshore/Nearshore Telecom & Technology Consumer Products Healthcare BFS Others 15.3% 11.7% 9.9% 10.0% 9.5% 13.6% 6.9% 7.3% 8.0% 8.0% 7.8% 8.7% 39.7% 42.3% 46.5% 47.0% 44.3% 43.7% 34.9% 41.8% 45.9% 49.2% 52.2% 51.0% 13.7
Slide 32: Revenue Composition
Revenue Composition Revenue by Delivery Revenue by Originations INR USD GBP CAD India Philippines USA UK Canada Jamaica 3.3% 4.7% 4.3% 4.7% 17.7% 12.2% 10.3% 9.9% 11.7% 10.4% 12.7% 10.6% 10.2% 11.7% 10.4% 17.7% 8.6% 6.9% 5.6% 8.6% 6.9% 5.9% 5.6% 10.5% 5.9% 10.5% 10.6% 10.6% 25.2% 25.1% 26.8% 32.8% 3
Slide 33: Revenue Composition
Revenue Composition OPEX seats & Owned Seats Owned Seats Seat for Opex 23.4% 22.4% 22.1% 22.3% 21.2% 9,507 10,260 10,238 9,345 9,443 35,372 35,557 32,951 32,968 33,577 Sept 18 Dec 18 Mar 19 June 19 Sept 19 | 32
Slide 34: Highly Tenured Clients
Highly Tenured Clients Focus on building partnerships 14% 4% Client Tenure – Client Tenure – Below 5 years Over 20 years Revenue by Tenure 14% Client Tenure – 68% 5-10 years Client Tenure – 10-20 years Data shown above is based on H1 FY 20 | 33
Slide 35: Thank You
CHGS Thank You
Hinduja Global Solutions — Kotak Private Client Group investor meet (November 2019) on 6ix