Conduent Incorporated · NASDAQ:CNDT
Conduent — Investor Day (June 2018)
108 slides from Conduent's investor day presentation, Jun 8, 2018
Slide 1: Analyst Day | June 8, 2018
Analyst Day | June 8, 2018 Exhibit 99.1
Slide 2: Welcome & Analyst Day Overview
Welcome & Analyst Day Overview Alan Katz, Investor Relations
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumption
Slide 4: Non-GAAP Disclosure & Other Items
Non-GAAP Disclosure & Other Items Non-GAAP Disclosure We have reported our financial results in accordance with U.S. generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using non-GAAP measures. We believe these non-GAAP measures allow investors to be
Slide 5: Agenda
Agenda 8:30 – 9:00 amRegistration / Breakfast 9:00 – 9:05 amIntroduction / Welcome and Analyst Day Overview Alan Katz, Vice President, Investor Relations 9:05 – 9:45 am Strategic Overview Ashok Vemuri, Chief Executive Officer 9:45 – 10:15 am Consumer and Industrials Christine Landry, Group Chief Exe
Slide 6: Conduent Analyst Day
CONDUENT Ppl Analyst Day | June 8, 2018 - N CONDUENT ss
Slide 7: Strategic Overview
Strategic Overview Ashok Vemuri, Chief Executive Officer
Slide 8: Reinvent Digital Interactions
Fortune Front-Office REINVENT DIGITAL INTERACTIONS Essential OPERATIONS Expertise Operations Governments & Agencies 500 Secure At-Scale Seamless MEMBERS PATIENTS CITIZENS CLIENTS EMPLOYEES Personalized Partner Interactions Secure Value
Slide 9: Our Company
Our Company Marquee Clients Recognized Industry Leader in our Core services Deep Domain & Process Capabilities Essential Partner Across Multiple Value Chains
Slide 10: Deep Domain & Process Capabilities
Deep Domain & Process Capabilities We are world's largest provider of diversified business services with leading digital platform capabilities Digital Platform Portfolio 13 Business areas 24 Platform Groups 81 Platforms Citizens Retail , Travel & Logistics Transportation Automotive, Aerospace & Defe
Slide 11: Marquee Clients
20 of Top 20 U.S. Health Insurers 9 of Top 10 Pharmaceutical Companies 4 of Top 5 Life Insurers 40% Of U.S. Hospitals 6 of Top 10 Automakers 4 of Top 5 Aerospace Firms 50 All 50 States 7 of Top 10 U.S. Banks 2018 – 2020 Addressable Market Growth1 11 Marquee Clients 1Q Signings Performance Total Cont
Slide 12: Essential Partner Across Multiple Value Chains
46% U.S. market share in Tolling and 44% in Parking Essential Partner Across Multiple Value Chains Healthcare Transportation Multi-Channel Services 70% of insured patient in the U.S. 1/3 of all U.S. insured touched by our communications Government Payments Payment processor for: 43% of U.S. child su
Slide 13: Recognized Industry Leader
Recognized Industry Leader Industry Analyst Accolades Everest Top 10 BPS Providers May 29, 2018 ADP Teleperformance Accenture Conduent Paychex Concentrix DXC Technology Xerox Arvato Bertelsmann Genpact Best-in-Class BPaaS Solutions HfS Research, NelsonHall, Black Book Research Top Provider for Worke
Slide 14: Our Progress
Our Progress Achieved Pre-Spin Goals $1B in Expected Divestitures Re-invention
Slide 15: Re-inventing our Company
Re-inventing our Company Where we started Where we’re going Unfocused Portfolio Disparate Culture Inefficient Operations One-Off Solutions Siloed Business Units A Single, Unified Company and Brand Underperforming Market Leading Performance Clear Business Strategy Consistent Culture Business Intellig
Slide 16: Aggressive Transformation
Aggressive Transformation Eliminated +250 Redundant Reporting Systems Reduced Real Estate Sq. Footage by ~3 million +$200M Adjusted Free Cash Flow FY20171 50 Brands Consolidated 1,400 Accounts Exited 17% Increase in Sales Headcount 1) Adjusted Free Cash Flow. Refer to Appendix for Non-GAAP reconcili
Slide 17: Signed Divestitures Year-to-Date
Signed Divestitures Year-to-Date ~$600M Estimated Proceeds ~$390M FY2017 Revenue ~$65M Adj EBITDA ~9.2x Adj EBITDA ~1.5x Revenue Multiples Note: Revenue and Adj EBITDA reference for FY2017 results, after stranded-cost take out. Signed divestitures subject to closing terms and conditions. Please refe
Slide 18: Met Pre-Spin Expectations
Met Pre-Spin Expectations Pre-Spin Objectives 2017 Results Revenue 2017 – decline similar to 2016 Adjusted EBITDA 2017 – greater than 5% growth Cost Transformation 2017 ~$430M cumulative savings Adjusted Free Cash Flow 2017 20-30% of Adjusted EBITDA Achieved -- adjusted for strategic actions Achieve
Slide 19: Pivoting to Technology
Pivoting to Technology Industry Evolution World-View Mission
Slide 20: Conduent Mission
Conduent Mission Transforming The Way Our Clients Operate
Slide 21: Our Core Values and Aspiration
Courage Open and Collaborative Speed and Agility Trust Commitment to Excellence Client-Centricity Our Core Values Our Aspiration Achieve Industry-Leading Performance Be the Most Trusted Partner to our Clients Be an Employer of Choice Build a Differentiated Brand Become the leading business services
Slide 22: Our Clients Are Facing Three Realities
As Digital Interactions Become The Norm, Our Clients Are Facing Three Realities Individualized 1 Immediate 2 Intelligent 3
Slide 23: Three Realities of Digital Interactions
Individualized 1 Immediate 2 Intelligent 3 As Digital Interactions Become The Norm, Our Clients Are Facing Three Realities End-User Setting Standards Value-Chains are Integrating Knowledge/Insights >Data
Slide 24: Evolution of the Business Services Market
Facet Legacy New Basis of Competition Cost, Efficiency Change Operating Model Operating Model Rigid, Client Determined Flexible, Digital, Scalable End-user Outcomes Generic Tailored, Personalized Value: Focus One Way (Client) Two Way (Client, End-user) Value Levers Labor, Automation Experience, Bloc
Slide 25: Building a Business for the Future
Building a Business for the Future Platform Based Digital Interactions Technology Driven Global Delivery Potential
Slide 26: A Digital Interactions Company
A Digital Interactions Company The People we are Serving Our Clients Technology Platforms Delivering Essential Services Interactions at Massive Scale
Slide 27: Digital Platform Architecture
Digital Platform Architecture End-Users Ecosystem of Partners & Collaborators Clients Intake Delivery Intelligence & Analytics Compliance & Reporting Engagement Client Outcomes
Slide 28: Conduent Solutions & Offering Set
28 Conduent Solutions & Offering Set CitySight BenefitWallet Kidstar MAVEN DriveSafe E-Tims MIDAS Life @work Blitzdocs MERGE EPIC RightOpt Health@work Flex RX VECTOR C A S CONDUENT ATLAS DART Strataware OMNIX Viewpoint LOAN MANAGER
Slide 29: Technology: Our Foundation and Future
Technology: Our Foundation and Future Conduent Technology Innovation Practice Areas Blockchain Automation Mobile Cognitive IoT
Slide 30: Global Delivery Potential
Global Delivery Potential Global Footprint 85,000 employees (down from 105K) 28 countries (down from 40+) 250 delivery centers Delivery Hubs Philippines India Jamaica Guatemala Romania Innovation Hubs Raleigh / Bangalore / Hyderabad Accu-Shoring Model Maximize talent sourcing “Follow-the-sun” operat
Slide 31: Pivoting to Growth
Pivoting to Growth Organic Growth Modernize the Base Value Chain Integrator Unit Specific Opportunities Inorganic & Partnerships
Slide 32: Pivoting to Growth
Pivoting to Growth Organic Growth Modernize the Base Value Chain Integrator Unit Specific Opportunities Inorganic & Partnerships
Slide 33: Digital Platform Modernization Investment
Digital Platform Modernization Investment ~$200M over Three Years Expected Investment By Platform Group Expected Investment By Sector
Slide 34: Knowledge & Insights Platform Design
Knowledge & Insights Platform Design Individualized Immediate Intelligent Customize Multiple Channels Business Tier Video Toll Processing Reporting & Business Intelligence Inventory Management Transaction Processing Customer Account Management Financial Processing Interoperability Case Management Vo
Slide 35: Healthcare Value Chain: Conduent Participation
Healthcare Value Chain: Conduent Participation Wellness Prevention Illness Recovery Maintenance Research & Development Administration Funding Relative Offering Strength Conduent Healthcare Offerings Reduce Cost of Care Improve Outcomes Enhance Customer Experiences Maintenance
Slide 36: Inorganic & Partnerships
Inorganic & Partnerships Focus Areas Examples Building Capabilities Digitalization Social Media, Mobility, Analytics & Cloud Omni-channel Emerging Technology Block Chain Automation AI and Analytics Right to Play Vehicles PAAS, Channels Policy and Regulation Scale & Geography Human Resource Services
Slide 37: Quotes from Our Clients
“After examining the options in the market, we chose Conduent due to their proven ability to bring strategic value to [our company]. They thoroughly understand our business and culture at every level and tailor solutions to us. We use the ‘P’ word with Conduent – they are our PARTNER, not our vendor
Slide 38: Conduent Analyst Day
CONDUENT Ppl Analyst Day | June 8, 2018 - N CONDUENT ss
Slide 39: Consumer & Industrials Sector
Consumer & Industrials Sector Christine Landry, Group Chief Executive
Slide 40: Commercial Overview
Commercial Overview Automotive, Aerospace & Defense Energy & Utilities Manufacturing Retail, Travel & Logistics Media, Entertainment and Telecom Technology Clients and Constituents Banking & Capital Markets Healthcare & Insurance Provider Pharma Who We Serve Clients Commuters Consumers Employees Mem
Slide 41: Financials for Commercial Business
Quarterly Revenue and Profit (adjusting for ASC 606)(1) Revenue ($ in M) % Segment Margin Segment Profit(1) $25M $31M $49M $71M $44M Segment Margin(1) 2.9% 3.7% 6.0% 8.3% 5.2% Adj EBITDA(1) $61M $69M $83M $105M $78M Adj EBITDA Margin(1) 7.0% 8.3% 10.1% 12.3% 9.1% Financials for Commercial Business (
Slide 42: Commercial – C&I
Commercial – C&I Clients and Constituents Banking & Capital Markets Healthcare & Insurance Provider Pharma Who We Serve Clients Commuters Consumers Employees Members, Patients & Clinicians Offerings Automotive, Aerospace & Defense Energy & Utilities Manufacturing Retail, Travel & Logistics Media, En
Slide 43: Financials for C&I Business
43 Financials for C&I Business FY2017 C&I Revenue By Service Line (% of C&I total) FY2017 C&I Revenue By Vertical (% of C&I total) Note: Business sector revenue represents approximate FY2017 revenue excluding signed and to-be-signed divestitures
Slide 44: Client-Centric Focus Across Industries
44 Client-Centric Focus Across Industries Delivers Value and Improves Outcomes Virtual Learning Migrate to eLearning platform 60% Reduction in design and development duration Intelligent Automation Leveraging automation and bots 50%+ Reduction in human errors RightOpt Private Exchange Decision suppo
Slide 45: C&I Market Opportunity Set
C&I Market Opportunity Set Business Sectors(2) Telecom, Media & Entertainment Automotive/ Aerospace/ Defense Energy/ Utilities Technology Retail/Travel/ Logistics Manufacturing ~$200M of Revenue ~$270M of Revenue ~$60M of Revenue ~$390M of Revenue ~$200M of Revenue ~$160M of Revenue Client Imperativ
Slide 46: Industry-Specific Offering: Automotive
46 Art-of-the-Possible: Industry-Specific Offering: Automotive Go to dealership to purchase a vehicle, drive off the lot Formal data transfer and contact permission provided by owner Central customer experience center (CEC) focuses on individual Predictive analytics individualized to owner & vehicle
Slide 47: Commercial – C&I
Commercial – C&I Clients and Constituents Banking & Capital Markets Healthcare & Insurance Provider Pharma Who We Serve Clients Commuters Consumers Employees Members, Patients & Clinicians Offerings Automotive, Aerospace & Defense Energy & Utilities Manufacturing Retail, Travel & Logistics Media, En
Slide 48: Omni-Channel and Digital Experience
Omni-Channel and Digital Experience Sectors Client Imperatives Our solutions that make us well positioned Digital Customer Experience Management Manage customer lifecycle across channels to monetize touchpoints, improve loyalty, increase satisfaction Automation, AI, machine learning End-to-end digit
Slide 49: Conduent Interactive Solutions
49 Conduent Interactive Solutions Agent time spent handling routine calls made to a call center Chatbot plus caller assisted for self-help Data and analytics to reduce chat time Predictive analytics proactively help pre-empt issues Enhanced AI and machine learning for individualized responses Cx Age
Slide 50: Human Resource Services Overview
Human Resource Services Overview Sector Client Imperatives Our solutions that make us well positioned HR Services Manage end-to-end, recruit-to-retire employee lifecycle to improve engagement and productivity Workforce & HR Enablement Health & Welfare Finance & Retirement Employee Engagement Integra
Slide 51: Employee Engagement Experience
Present information based on my company and division Present information based on my demographic data Present information based on: behavioral data level of information each user wants or needs Support dependent on availability of local HR resource Self-service functionality so - employees can get i
Slide 52: Leader Status Across Service Lines / Industries
Leader Status Across Service Lines / Industries Customer Management Contact Center BPO Magic Quadrant, Leader Benefits Administration Services NEAT, Overall, Leader Next Generation Learning BPS NEAT, Overall, Leader Cloud-Based HR Services NEAT, Overall, Leader Multi-Process HR Services NEAT, Overal
Slide 53: C&I Growth Approach
C&I Growth Approach Growth Parameters Telecom Media & Entertainment Auto/Aero/ Defense Technology Retail/Travel/ Logistics Manufacturing Energy/Utilities Modernize our Base Life@Work 6 Digital Processing and Automation Omni-channel customer experience management and engagement Finance, Accounting &
Slide 54: Our Growth Roadmap
2017 2018 2019 2020 Our Growth Roadmap Service Mix Today HR Services, Learning, Customer Care, Transaction Processing Competitors Low value, specialized, smaller specialized, pure play, focused on specific horizontal providers Service Mix Tomorrow Workforce Solutions, Learning, Omnichannel CX, Indus
Slide 55: Conduent Analyst Day
CONDUENT Ppl Analyst Day | June 8, 2018 - N CONDUENT ss
Slide 56: Financial Services & Healthcare
Financial Services & Healthcare Pratap Sarker, Group Chief Executive
Slide 57: Commercial – FS&H
57 Commercial – FS&H Clients and Constituents Banking & Capital Markets Healthcare & Insurance Provider Pharma Who We Serve Clients Commuters Consumers Employees Members, Patients & Clinicians Offerings Automotive, Aerospace & Defense Energy & Utilities Manufacturing Retail, Travel & Logistics Media
Slide 58: Financials for FS&H Business
Financials for FS&H Business FY2017 FS&H Revenue By Vertical (% of FS&H total) FY2017 FS&H Revenue By Service Line (% of FS&H total) Note: Business sector revenue represents approximate FY2017 revenue excluding signed and unsigned divestitures
Slide 59: Focus on Clients and Outcomes
11 of the top 12 Fortune 500 commercial banks 20 of 20 managed U.S. healthcare plans 40% of U.S. hospitals (2,200 hospitals) 14 of 15 top global pharmaceutical companies 2/3 of U.S. insured patients are touched by our services 1+ Billion commercial and government claims processed each year 45 Millio
Slide 60: FS&H Market Opportunity Set
FS&H Market Opportunity Set Banking & Capital Markets ~$320M Healthcare & Insurance ~$770M Provider Pharma & Life Sciences ~$120M Business Sectors(2) Digital Platforms: Medical Cost & Care Management Consumer Lending Health Outcomes Patient Engagement Client Imperatives: Emergence of Fintech players
Slide 61: Health Outcomes Solutions
Health Outcomes Solutions How does Conduent help healthcare providers improve their engagement with patients? Legacy Reactive Care Today Refocusing on Outcome Evolving Connection of Health and Behavior No true plan of care post hospital stay Mostly passive patients Reimbursement is changing to incen
Slide 62: Consumer Lending
Consumer Lending How does Conduent help its customers digitize interactions to maximize efficiencies and insights? Legacy Reactive, Slow, Paper Intensive Today Focus on Quality/Risk, High Cost to Originate and Service Evolving Automation and Insights to Reduce Risks and Costs Paper intensive with no
Slide 63: Commercial – FS&H
Commercial – FS&H Clients and Constituents Banking & Capital Markets Healthcare & Insurance Provider Pharma Who We Serve Clients Commuters Consumers Employees Members, Patients & Clinicians Offerings Automotive, Aerospace & Defense Energy & Utilities Manufacturing Retail, Travel & Logistics Media, E
Slide 64: Legal & Compliance
Legacy eDiscovery & Data Hosting Today Legal & Compliance Evolving Cognitive Risk Management Generic legal case management approach for all users Single product and information delivery model Litigation management, Investigations, and compliance assessments are tailored to industry, enterprise or re
Slide 65: Leader Status Across Service Lines / Industries
Leader Status Across Service Lines / Industries HfS Industry Spotlight Blueprint: Banking & Financial Services, Execution Powerhouse, 4/23 HfS Industry Spotlight Blueprint: Insurance Operations Services, Execution Powerhouse, 5/18 HfS Blueprint Report: Digital OneOffice, High Performer, 5/28 NelsonH
Slide 66: FS&H Growth Approach
FS&H Growth Approach Growth Parameters Banking & Capital Markets Healthcare & Insurance Healthcare Provider Pharma & Life Sciences Modernize our Base Redesign Consumer Finance (Lending) Digital Processing platform Workers Compensation Midas modernization to Cloud Health@ Work Platform Inside Sales P
Slide 67: Our Growth Roadmap
Our Growth Roadmap Service Mix Today Customer Care, Transaction Processing, Platform based solutions Competitors Low value, specialized, smaller specialized, pure play, focused on specific horizontal providers Service Mix Tomorrow SaaS, TPA, Omni-Channel Experiences, Digital Processing Competitors G
Slide 68: Conduent Analyst Day
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Slide 69: Public Sector
Public Sector Dave Amoriell, President
Slide 70: Sector Overview
Sector Overview Clients and Constituents Who We Serve Payments Federal, State & Local Transportation Government Electronic Tolling Public Transit Parking P Public Safety Eligibility Management Child Support Citizen Entitlement Benefits Card Services Gov’t Payments Winning Aspiration: We will promote
Slide 71: Public Sector Financial Overview
Public Sector Financial Overview Quarterly Revenue and Profit (adjusting for ASC 606)(1) Revenue ($ in M) % Segment Margin Segment Profit(1) $55M $51M $58M $62M $65M Segment Margin(1) 9.3% 8.8% 9.9% 10.6% 11.6% Adj EBITDA(1) $85M $81M $84M $84M $87M Adj EBITDA Margin(1) 14.4% 13.9% 14.4% 14.4% 15.6%
Slide 72: Transportation Overview
Transportation Overview Client Imperatives Our solutions that make us well positioned Sprawling urbanization, traffic congestion, public policies; coupled with agencies desire to improve services and increase utilization Wrap Technology Around Customer Experience Proven Solutions Desired Business Mo
Slide 73: Transit
Transit How can transit operators and agencies around the world improve the experience of public transportation and attract more riders, while reducing the time of travel and contributing to lower traffic congestion in cities? Cash payment Token for payments Tickets purchased from ticket offices Sma
Slide 74: Key Government Digital Offerings
Key Government Digital Offerings Government Overview Sector Client Imperatives Our solutions that make us well positioned Federal Integrated solutions to improve services to constituents; while standardizing services Leverage horizontal businesses into Federal industry Government Healthcare State Me
Slide 75: Managing Medicaid Pharmacy Spending
Managing Medicaid Pharmacy Spending How can States control spending and improve the safety and efficacy of drug therapies in Medicaid? Paper-based submission, faxed prior forms and payment via check Non-scalable, standalone, costly systems Electronic prescription and claim submission, transmission a
Slide 76: Government Benefit Payments
Government Benefit Payments How can government agencies streamline benefits payments, improve analytics and reduce program fraud? Non-digital communication methods Limited self – service options Mobile, live agent, web, chat, digital customer experience Intelligent IVR cardholder identification and
Slide 77: Servicing, Clients and Awards
Servicing 46% market of US electronic toll collection Leading provider of parking solutions with 44% market share in the U.S. More than 100M public transport tickets are processed daily #1 US Prepaid card government processor Over 54 million registered payment cards with over $85 billion in funds ma
Slide 78: Growth Parameters
Growth Parameters Transportation Government Healthcare State & Local Federal Modernize our Base Investment focused on future product evolution Pharmacy Benefits Management platform functionality Long term care eligibility investment Configurable / modular case management offering Focus on leveraging
Slide 79: Our Growth Roadmap
Our Growth Roadmap Service Mix Today Large Integrated Platform based solutions Competitors Specialized Strategics and pure-play competitors focused on transactions and customer retention Service Mix Tomorrow Modular, Mobile and Cloud-based solution Competitors Experts focused on expanding mobility t
Slide 80: Conduent Analyst Day
CONDUENT Ppl Analyst Day | June 8, 2018 - N CONDUENT ss
Slide 81: Financial Overview
Financial Overview Brian Webb-Walsh, Chief Financial Officer
Slide 82: Key Takeaways
Key Takeaways Pivoting to Growth Stable Core Long Term Outlook Improving Margins
Slide 83: Financials for Overall Business
Financials for Overall Business Quarterly Revenue and Profit (adjusting for ASC 606 and FY2017 Divestitures)(1) Revenue ($ in B) % Adj. EBITDA Margin Operating Profit(1) $83M $83M $107M $127M $105M Operating Margin(1) 5.6% 5.8% 7.5% 8.7% 7.4% Adj EBITDA(1) $147M $153M $170M $185M $161M Adj EBITDA Ma
Slide 84: FY2018 Guidance
FY2018 Guidance As of Feb 21st As of May 9th As of June 8th Revenue $5.60 - $5.80B $5.44 - $5.64B $5.41 - $5.61B Adj EBITDA Adj EBITDA Margin Continued focus on margin expansion, post-divestiture impact $707 - $733M 12.1 - 13.0% $672 - $698M 11.9 - 12.8% $662 - $688M 11.8 - 12.7% Adj Free Cash Flow
Slide 85: Divestiture Update
Divestiture Update Successfully Monetizing Non-Core Assets Total non-core revenue to divest: ~$1B Total non-core Adj EBITDA to divest: ~$75M Signed Divestitures Off-Street Parking Human Resources Consulting Commercial Vehicle Operations Financials 2017 Revenue: ~$390M 2017 Adj EBITDA: ~$95M 2107 Adj
Slide 86: Defining "The Core"
Defining “The Core”– The Stable Base Reflects: Debt pay-down (Net leverage ~2x) Capex of ~3% of revenue Adj tax rate of 30 - 35% FY2018 Core Adj Free Cash Flow % of Adj EBITDA $190 - $265M 30 - 40% What FY2018 would look like after all ~$1B of divestitures, stranded cost take-out (~7% of divested re
Slide 87: Key Takeaways
Key Takeaways Pivoting to Growth Stable Core Long Term Outlook Improving Margins
Slide 88: Revenue – Growing the Core
Revenue – Growing the Core $5.6 - $5.8B ~($400)M ~($600)M $4.6 - $4.8B FY2018E Pre-Divestiture Guidance Signed Divestitures To-be-signed Divestitures FY2018E Core Revenue FY2019 / FY2020E Growth FY2020E Outlook 2.5 - 4% Annual Growth
Slide 89: Revenue Growth Drivers
Organic New business in existing segments Increased sales capacity Client engagement model Service line expansion Modernize our base Leverage technology differentiation Expand role in value-chain Inorganic Acquisitions focused on capabilities, technology, IP, automation, etc. Federal, Healthcare, an
Slide 90: Key Takeaways
Key Takeaways Pivoting to Growth Stable Core Long Term Outlook Improving Margins
Slide 91: Adjusted EBITDA – Margin Improvement
$707 - $733M ~($95)M ~($50)M ~$70M $632 - $658M Adjusted EBITDA – Margin Improvement 12.1 – 13.0% Adj EBITDA Margin >15% Adj. EBITDA Margin 13.2 -14.3% Adj EBITDA Margin FY2018E Pre-Divestiture Guidance Signed Divestitures To-be-signed Divestitures Stranded Cost Take-out FY2018E Core Adj EBITDA FY20
Slide 92: Adjusted EBITDA Growth Drivers
Adjusted EBITDA Growth Drivers Growth Organic growth Revenue growth from higher margin deals Average new business margin threshold: >15% Adj EBITDA margin Improved operating leverage Inorganic growth Targeting >15% Adj EBITDA margins on average from acquisitions Transformation Existing 3-Year $700M
Slide 93: Sources / Uses of Cash in FY2018E
Sources / Uses of Cash in FY2018E Using Cash to Create Shareholder Value Sources of Cash ~$1.2B Target Cash Uses of Cash Balanced Capital Deployment Note: Sources and Uses of cash exclude any potential proceeds from to-be-signed divestitures
Slide 94: Key Takeaways
Key Takeaways Pivoting to Growth Stable Core Long Term Outlook Improving Margins
Slide 95: Financial Performance Goals
FY2018 Core 2019/2020 Drivers Financial Performance Goals $4.6 - $4.8B Revenue Growth 2.5 - 4% Annual Growth 30 - 40% of Adj EBITDA Adj Free Cash Flow 35 - 45% of Adj EBITDA Adj EBITDA Adj EBITDA Margin $632 - $658M 13.1 - 14.3% >15% Adj EBITDA Margin by 2020 New logos Inorganic growth Client expans
Slide 96: Conduent
CONDUENT Pye
Slide 97: Appendix
Appendix - N CONDUENT ss
Slide 98: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures We have reported our financial results in accordance with U.S. generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using the non-GAAP measures. We believe these non-GAAP measures allow investors
Slide 99: Adjusted Other Segment Profit and Margin
Adjusted Other Segment Profit and Margin We adjust our Other Segment profit and margin for NY MMIS and HE charge adjustments. We provide Other segment adjusted loss and Other segment adjusted margin information, as supplemental information, because we believe that the adjustment for NY MMIS wind-dow
Slide 100: Previously Reported
Previously Reported Previously Reported (in millions) Q1 2018 Q1 2018 FY 2017 FY 2017 Q4 2017 Q4 2017 Q3 2017 Q3 2017 Q2 2017 Q2 2017 Q1 2017 Q1 2017 GAAP Revenue From Continuing Operations $ 1,420 $ 6,022 $ 1,493 $ 1,480 $ 1,496 $ 1,553 GAAP Pre-tax Income (Loss) From Continuing Operations (54 ) (1
Slide 101: Adjusted for 606 and Divestitures
Adjusted for 606 and Divestitures(1) Adjusted for 606 and Divestitures(1) (in millions) Q1 2018 Q1 2018 FY 2017 FY 2017 Q4 2017 Q4 2017 Q3 2017 Q3 2017 Q2 2017 Q2 2017 Q1 2017 Q1 2017 GAAP Revenue From Continuing Operations $ 1,420 $ 6,022 $ 1,493 $ 1,480 $ 1,496 $ 1,553 ASC 606 adjustment — (166 )
Slide 102: Previously Reported
Previously Reported Previously Reported (in millions) Q1 2018 Q1 2018 FY 2017 FY 2017 Q4 2017 Q4 2017 Q3 2017 Q3 2017 Q2 2017 Q2 2017 Q1 2017 Q1 2017 Reconciliation to Adjusted Revenue GAAP Revenue From Continuing Operations $ 1,420 $ 6,022 $ 1,493 $ 1,480 $ 1,496 $ 1,553 GAAP Net Income (Loss) from
Slide 103: Adjusted for 606 and Divestitures
Adjusted for 606 and Divestitures(1) Adjusted for 606 and Divestitures(1) (in millions) Q1 2018 Q1 2018 FY 2017 FY 2017 Q4 2017 Q4 2017 Q3 2017 Q3 2017 Q2 2017 Q2 2017 Q1 2017 Q1 2017 Reconciliation to Adjusted Revenue GAAP Revenue From Continuing Operations $ 1,420 $ 6,022 $ 1,493 $ 1,480 $ 1,496 $
Slide 104: Previously Reported
Previously Reported Previously Reported (in millions) Q1 2018 Q1 2018 FY 2017 FY 2017 Q4 2017 Q4 2017 Q3 2017 Q3 2017 Q2 2017 Q2 2017 Q1 2017 Q1 2017 Commercial Industries Segment GAAP revenue $ 854 $ 3,475 $ 879 $ 845 $ 856 $ 895 Segment profit $ 44 $ 181 $ 73 $ 49 $ 33 $ 26 Segment depreciation an
Slide 105: Adjusted for 606 and Divestitures
(1) adjusted for the estimated impact from the adoption of the 606 accounting standard, had it been applicable in FY 2017 and revenue and (income) loss from divestitures. Certain reclassifications have been made to prior year information to conform to current year presentation. (2) HE business moved
Slide 106: Adjusted for 606 and Divestitures
(1) adjusted for the estimated impact from the adoption of the 606 accounting standard, had it been applicable in FY 2017 and revenue and (income) loss from divestitures. Certain reclassifications have been made to prior year information to conform to current year presentation. Adjusted for 606 and
Slide 107: Free Cash Flow and Adj. Free Cash Flow
Three Months Ended March 31, Three Months Ended March 31, (in millions) 2018 2018 2017 2017 Operating Cash Flow $ (38 ) $ (107 ) Cost of additions to land, buildings & equipment (33 ) (17 ) Proceeds from sales of land, buildings and equipment (6 ) (8 ) Vendor financed capital leases — (12 ) Free Cas
Slide 108: Conduent Analyst Day
CONDUENT Ppl Analyst Day | June 8, 2018 - N CONDUENT ss