Huron Consulting Group Inc. · NASDAQ:HURN
Huron Consulting — Q3 2021 Earnings Presentation
39 slides from Huron Consulting's earnings presentation, Nov 2, 2021
Slide 1: Investor Presentation Q3 2021
INVESTOR PRESENTATION Q3 2021 November 2, 2021
Slide 2: Forward-looking Statements
Forward-looking Statements Statements in this press release 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 amended, and th
Slide 3: Company Overview
1 COMPANY OVERVIEW
Slide 4: Trusted Advisor For Transformative Strategic Decisions And Execution
Trusted Advisor For Transformative Strategic Decisions And Execution FORMED IN 2002 More than 3,800 professionals With approximately 200 2020 revenue of $844 million with leading industry, professionals functional and technical We are a global consultancy that expertise helps our clients drive growt
Slide 5: Global Client Base And Footprint
Global Client Base And Footprint Clients Served 100 of the top 100 research universities 65 of the top 100 Great Hospitals in America(1) 45+ of the Fortune 100 (1) Based on Becker’s Hospital Review ranking. 5
Slide 6: Partner With Clients To Strengthen Their Business Today And Create Future Growth
Partner With Clients To Strengthen Their Business Today And Create Future Growth For Tomorrow Improve How do I drive efficiency and improve my financial position Fundamental to make the strategic investments I need to? Performance Reinvent How do I spot, seize and scale opportunities to create new C
Slide 7: Focused Operating Segment Mix
Focused Operating Segment Mix on serving industries Education facing 25% significant Healthcare 42% disruption Business and/or Advisory regulatory 33% change… Segment percentages are based on year-to-date September 2021 revenue results. 7
Slide 8: Operating Segment Mix With A Unified Platform
…with a Operating Segment Mix unified platform that drives Education 25% 18% strategic Healthcare 42% of Q3 2021 Business advantage Business Advisory Advisory segment revenue was generated through 33% in the healthcare and collaboration. education industries Segment percentages are based on year-to-
Slide 9: Strategic focus on digital, technology and analytics offerings has fueled growth
Strategic focus on digital, technology and analytics offerings has fueled growth within our business Annual companywide revenue from technology services and products grew at a CAGR of nearly Approx. 40% of total 15% from 2015 to 2020. company revenues was derived from our digital, technology and ana
Slide 10: Strategic Priorities To Drive Shareholder Value
Strategic Priorities To Drive Shareholder Value ACHIEVE SUSTAINABLE DRIVE MARGIN DEPLOY CAPITAL INVEST IN OUR ORGANIC GROWTH EXPANSION STRATEGICALLY PEOPLE 10 10
Slide 11: Huron's 2022 Strategic Framework
Huron’s 2022 Strategic Framework VISION MISSION VALUES INTEGRITY To empower our clients, our people To enable organizations to improve fundamental COLLABORATION INCLUSION and the communities we serve to performance, reinvent their business, generate new HUMILITY IMPACT OWN THEIR FUTURE. growth platf
Slide 12: Services Overview
2 SERVICES OVERVIEW
Slide 13: Healthcare Segment Overview
Healthcare AT A GLANCE • Served more than 450 health systems, Segment Overview hospitals and physician organizations, including 65 of the top 100 Great Hospitals in America (Source: Becker’s Hospital Review) Health systems, hospitals and medical clinics are under immense pressure to improve • Over 1
Slide 14: Healthcare Revenue & Operating Margin
Healthcare Revenue & Operating Margin % 34.8% Clients We Serve 31.5% 33.3% 29.6% 26.9% $450 40% $400 35% Integrated Health Systems $350 30% In millions $300 Academic Medical Centers 25% $250 20% Children’s Hospitals $200 15% $150 Community Hospitals $100 10% $353 $425 $357 $365 $399 5% Public Hospit
Slide 15: Market Trends
Market Trends SUSTAINING MARGINS WHILE TECHNOLOGY INVESTMENT TRANSFORMING 92% of C-Suite respondents say growing margins, Trends indicate healthcare organizations are investing in the future and restoring dollars back investing in ways to activate valuable data from into the community is a top focus
Slide 16: Healthcare Expertise
Healthcare Expertise Care Financial and Technology and Leadership Transformation Operational Excellence Analytics Excellence • Improved transitions of • Increased cash flow • Activated technology to • Developed accountable care • Leveraged resources create a competitive leaders • Improved quality mo
Slide 17: Business Advisory Segment Overview
AT A GLANCE Business Advisory • 2020 Restructuring Award Winner, The M&A Advisor Segment Overview • 2019 Small Company Transaction of the Year Award Winner, Turnaround Management Association Across industries worldwide, increasingly complex challenges are making • 2018 Best Innovation Strategy it di
Slide 18: Business Advisory Revenue & Operating Margin
Business Advisory Industries We Serve Healthcare, Education, Financial Services, Life Sciences, Energy and Utilities, Industrials and Manufacturing, Public Sector and Other Revenue & Operating Margin % Commercial Industries 21.4% 22.4% 18.0% 19.7% Clients We Serve 19.4% $300 25% $250 20% Fortune 500
Slide 19: Market Trends
Market Trends SHRINKING CORPORATE LIFESPANS TECHNOLOGY INVESTMENT The 33-year average tenure of companies on the Global IT spending is projected to total $3.9 trillion S&P 500 in 1964 narrowed to 24 years by 2016 in 2020, with software being the fastest growing and is forecast to shrink to just 12 y
Slide 20: Enterprise Solutions & Analytics Expertise
Enterprise Solutions & Analytics Expertise Advisory Customer Enterprise Performance Analytics and Managed Services Relationship Resource Management Reporting Services Management (CRM) Planning (ERP) • Developed • Increased revenues • Streamlined • Increased cash flow • Maximized return on • Improved
Slide 21: Legacy Business Advisory Expertise
Legacy Business Advisory Expertise Capital Commercial Operational Restructuring & Transaction Valuation Advisory Dispute Improvement Turnaround Advisory Advisory Services • Strengthened • Achieved most • Increased cash flow • Increased cash flow • Mitigated risk during • Assessed asset competitive f
Slide 22: Strategy & Innovation Expertise
Strategy & Innovation Expertise Create Growth Build Innovation Accelerate New Strategies Capabilities Growth Initiatives • Achieved growth ambitions in fast-moving • Developed the internal capabilities required • Identified and scaled high-potential and unpredictable environments to make innovation
Slide 23: Education Segment Overview
Education AT A GLANCE Segment Overview • Worked with more than 500 institutions, including all top 100 research universities Higher education institutions, academic medical centers and research • Conducted over 7,000 organizations face mounting pressures from increased public scrutiny, evolving succ
Slide 24: Education Revenue & Operating Margin
Education Revenue & Operating Margin % Clients We Serve 24.8% 24.8% 21.3% 25.6% 24.0% $250 30% Colleges $200 25% Universities 20% In millions $150 15% Academic Medical Centers $100 10% Children’s Hospitals $223 $150 $168 $194 $225 $50 5% Cancer Centers $- 0% Research Institutions 2016 2017 2018 2019
Slide 25: Market Trends
Market Trends 49% $0.53 Only 49% of public university chief Average additional amount medical schools Cloud spend in higher education is executives are confident in their invested for each dollar of sponsored research forecasted to grow from $509m in 2017 to institution’s financial sustainability ov
Slide 26: Education Expertise
Education Expertise Strategy and Student Research Financial and Technology and Leadership Innovation Success Transformation Operational Analytics Excellence Excellence • Created roadmap for • Improved retention, • Optimized funding • Increased cash flow • Activated technology • Improved the future t
Slide 27: Financial Overview
3 FINANCIAL OVERVIEW
Slide 28: Revenue trend
Revenue trend Revenues from Continuing Operations (in millions) $1,000 2016-2019 $885-$905 $900 CAGR = 6.5% $877 $800 $844 $795 $700 $726 $733 $600 $500 $400 $300 $200 $100 $- 2016 2017 2018 2019 2020 2021 Guidance 28 2021 Guidance noted in this presentation is effective as of November 2, 2021. Noth
Slide 29: Adjusted EBITDA trend
Adjusted EBITDA trend Adjusted EBITDA (in millions) and Adjusted EBITDA Margin from Continuing Operations $140 $120 $130 $100 $105 $105 10.8% - 11.3% Adjusted EBITDA $80 $91 $87 Margin $60 $40 $20 17.9% 14.3% 11.4% 12.0% 10.3% $- 0 2016 2017 2018 2019 2020 2021 Guidance + 2021 Guidance noted in this
Slide 30: Adjusted EPS trend
Adjusted EPS trend Adjusted Diluted Earnings per Share from Continuing Operations $3.50 $3.00 $3.21 Within a range $2.50 $2.74 of $2.53 to $2.63 $2.00 $2.15 $2.08 $2.15 $1.50 $1.00 $0.50 $- 2016 2017 2018 2019 2020 2021 Guidance + 2021 Guidance noted in this presentation is effective as of November
Slide 31: Free Cash Flow Per Share & Free Cash Flow Yield
Free Cash Flow Per Share & Free Cash Flow Yield $6.00 30.00% $5.00 $5.38 $5.40 25.00% $4.83 $4.00 20.00% $3.93 $3.49 $3.00 15.00% $2.00 10.00% 10.6% 8.6% 9.2% 7.7% 7.0% $1.00 5.00% $- 0.00% 2016 2017 2018 2019 2020 Free cash flow is defined as cash from operations minus capital expenditures. Free ca
Slide 32: Operating Metrics From Continuing Operations
Operating Metrics From Continuing Operations 2016 2017 2018 2019 2020 Number of Full-Time Billable Consultants 1,903 2,136 2,247 2,576 2,608 Headcount Leverage(1) 14.7 15.3 15.5 17.4 15.6 Full-Time Billable Consultant Utilization Rate 74.6% 74.5% 77.5% 76.1% 70.7% Average Full-Time Equivalents(2) 26
Slide 33: Appendix
4 APPENDIX
Slide 34: Reconciliations Of Non-GAAP Measures To Comparable GAAP Measures
Reconciliations Of Non-GAAP Measures To Comparable GAAP Measures In evaluating the company’s financial performance and outlook, management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage of revenues, free cash flow, adjusted net income from continuing operations, and adjusted diluted e
Slide 35: Reconciliations of non-GAAP measures
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) 2016 2017 2018 2019 2020 Revenues $ 726 $ 733 $ 795 $ 877 $ 844 Net income (loss) from continuing oper
Slide 36: Reconciliations of non-GAAP measures
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) 2016 2017 2018 2019 2020 Net income (loss) from continuing operations $ 40 $ (170) $ 14 $ 42 $ (24) Weighted
Slide 37: Reconciliations of non-GAAP measures
Reconciliations of non-GAAP measures Reconciliation of cash from operating activities to free cash flow (in millions) 2016 2017 2018 2019 2020 Cash from operating activities $ 129 $ 100 $ 102 $ 132 $ 137 Less: Capital expenditures (14) (25) (15) (23) (17) Free cash flow $ 115 $ 75 $ 87 $ 109 $ 120 W
Slide 38: Leadership
LEADERSHIP
Slide 39: Our Leadership
Our Leadership Jim Roth Mark Hussey John Kelly Ernie Torain President & Chief Financial Officer General Counsel & Chief Executive Officer Chief Operating Officer & Treasurer Corporate Secretary 39
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