Trinet Group, Inc. · NYSE:TNET
Trinet — William Blair 39th Annual Growth Stock Conference 2019
18 slides from Trinet's conference presentation, Jun 6, 2019
Slide 1: TriNet Group, Inc. – William Blair Growth Company Conference
TriNet Group, Inc. William Blair Growth Company Conference Richard Beckert, CFO June 6, 2019 © 2019 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Reproduction or distribution in whole or part witho
Slide 2: Disclaimer
Disclaimer Cautionary Note Regarding Forward-Looking Statements and Other Financial Information This presentation contains statements that are not historical in nature, are predictive in nature, or that depend upon or refer to future events or conditions or otherwise contain forward-looking statemen
Slide 3: Investment Highlights
Investment Highlights • Innovation leader serving large, under-penetrated market • Differentiated vertical product offerings • Increased operational scale and financial leverage • Profitable growth supported by strong corporate cash generation* *see Appendix B © 2019 TriNet Group, Inc. All rights re
Slide 4: Challenges Facing SMBs
Challenges Facing SMBs Compliance Compliance ⦁ Significant regulatory oversight ⦁ Risks for federal, state, and local noncompliance are high Complexity ⦁ Federal, state, and local regulations continue to diverge ⦁ Managing HR across multiple jurisdictions Cost Cost ⦁ SMBs pay multiple vendors and em
Slide 5: Common Product and Service Capabilities
Common Product and Service Capabilities Multiple Industry-specific Health insurance: medical, Multi-state payroll Workers’ compensation Online and mobile app for product and service dental and vision processing and tax insurance coverage and real-time data access offerings administration claims reme
Slide 6: Market Opportunity: Underpenetrated SMB Market
Market Opportunity Underpenetrated SMB Market Market Characterization Complexity of Employer’s HR Needs Professional 59mm1 Services Main Street Life Nonprofit Sciences Technology Basic Needs Financial Services Approximately 6% of Small and Medium Sized Business (SMB) Importance of Employee Experienc
Slide 7: Vertical Strategy
Vertical Strategy TriNet Life Sciences TriNet Technology TriNet Main Street Q2 2015 Q4 2016 Q3 2017 TriNet Non Profit TriNet Financial TriNet Professional Services Q2 2016 Services Q2 2018 Q4 2016 • Different industries have different needs • SMBs seek partners who know their industries and can scal
Slide 8: Platform Migration 2016-2018
Platform Migration 2016-2018 • Launched our platform migration efforts Q1 2016 ✓ Successfully migrated three platforms to our common platform • Reviewed our entire installed base ✓ Ensured our clients were properly priced to risk • Completed SOI migration Q1 2018 ✓ Last cohort impacted by repricing
Slide 9: Continued Growth through the Migration
Continued Growth through the Migration 3,700 340 (Millions) Total Revenue Trailing 4 Quarters4 (000s) 3,600 vs Ending WSEs 3,500 330 3,400 3,300 3,200 320 3,100 3,000 2,900 310 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 GAAP Revenue (Total Revenue) Ending WSE Count (RHS)
Slide 10: Revenue Growth Paired with Cost Management
Revenue Growth Paired with Cost Management 1,000 42% (Millions) Net Service Revenues vs Adjusted EBITDA Margin Trailing 4 Quarters4 900 40% 800 38% 700 36% 600 34% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Net Service Revenues Adjusted EBITDA Margin (RHS) From Q1 2017 t
Slide 11: Strong Returns for Shareholders
Strong Returns for Shareholders 70 (TNET Stock Px) TNET Stock Px vs 4.80 (Earnings per Share) GAAP Diluted EPS Trailing 4 Quarters4 60 3.80 50 2.80 40 1.80 30 20 0.80 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 TNET Px GAAP Diluted EPS (RHS) From Q1 2017 through Q1 2019:
Slide 12: 2019 Growth Initiatives
2019 Growth Initiatives Strengthen our operations, products, and services on our single platform 1 Increase operational leverage Improve our client engagement model 2 Increase client retention rates Drive new sales growth 3 Increase sales productivity © 2019 TriNet Group, Inc. All rights reserved. A
Slide 13: Capital Allocation
Capital Allocation 1 Reinvest in business — drive revenue growth and margin expansion Potential Acquisitions —Tuck-ins and Technology — potential to target 2 geographies or verticals and improve products and/or operations Share repurchases intended to offset dilution from employee 3 compensation pla
Slide 14: Questions?
Questions?
Slide 15: Appendix A
Appendix A Reconciliation of non-GAAP financial measures to GAAP financial measures Reconciliation of GAAP to Non-GAAP Measures The table below presents a reconciliation of total revenues to Net Service Revenues: Three Months Ended March 31, December 31, September 30, June 30, March 31, December 31,
Slide 16: Appendix B
Appendix B Please refer to our most recent Annual Report and Quarterly Reports for a more detailed discussion of our Statement of Cash Flows Year Ended December 31, (in millions) 2018 2017 Corporate WSE Total Corporate WSE Total Net cash provided by (used in): Operating activities (1) $ 234 $ (338)
Slide 17: Appendix B
Appendix B Please refer to our most recent Annual Report and Quarterly Reports for a more detailed discussion of our Statement of Cash Flows © 2019 TriNet Group, Inc. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Rep
Slide 18: Appendix C – End Notes
Appendix C End Notes 1 US Small Business Administration, Office of Advocacy, 2018 Small Business Profile; the total number of employees employed by firms with 500 or fewer employees. 2 National Association of Professional Employer Organizations (NAPEO); NAPEO White Paper Series #6, An Economic Analy
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