NIIT Limited · NSE:NIITLTD
NIIT — Q3 FY2011 Earnings Presentation
56 slides from NIIT's earnings presentation, February 2011
Slide 1: Investor Presentation February 2011
Investor Presentation February 2011 1
Slide 2: Agenda
Agenda • Education & Training: Landscape • Company Overview – Individual Learning Solutions – School Learning Solutions – Corporate Learning Solutions • Q3‟11: Results Update • Future Direction 2
Slide 3: Education & Training: Landscape
EDUCATION & TRAINING: LANDSCAPE 3
Slide 4: India's "Demographic Dividend"
India‟s “Demographic Dividend” Median Age Proportion Of Working Age 40 Group 37 34 64.8 65.0 25 63.5 64.2 62.6 61.6 59.9 India China UK USA 2005 2010 2015 2020 2025 2030 2035 Working Age Group Population (Mn) India China UK USA • Young population 923 994 918 • India to have the largest working 846 7
Slide 5: Education & Training In India: The Challenge
Education & Training In India: The Challenge Drop Out Rates By Level Of School Education 100% -26% 38% -24% -12% Initial Class I-V Class VI-VIII Class IX-X High School Enrolment Gross Enrolment Ratio (GER) In Tertiary 83% Education 76% 59% 30% 23% 12% USA Norway UK Brazil China India Source: Plannin
Slide 6: Education & Training In India: The Challenge
Education & Training In India: The Challenge No of illiterates (Mn) 396 79 73 89 0 3 8 18 Botswana Colombia India Mexico Pakistan Indonesia Bangladesh China Source: UNDP HDR:2009 Percentage with Formal Vocational Training 96 75 80 64 68 36 22 28 5 Australia Botswana Colombia Germany India Japan Kore
Slide 7: Education & Training: The Emerging Environment
Education & Training: The Emerging Environment The Emerging Framework Planned Outcomes • National Skills 10,000 new vocational schools Skills Development Corporation 50,000 skill development Development • Target: vocational skills to centers 500 Mn people by 2022 Revamp of ITIs Public Privat
Slide 8: NIIT In The Emerging Environment
NIIT In The Emerging Environment NIIT’s Strengths Current Engagement • Long standing brand ILS: IT and Soft Skills • Best in class domain IFBI: Banking, Finance, Insurance Skills partnerships Uniqua: BPO/KPO Skills Development • Content creation Imperia: Management education capability English Plu
Slide 9: NIIT In The Emerging Environment
NIIT In The Emerging Environment NIIT’s Strengths Current Engagement Tie up with 60+ universities • Institutional Joint certification and dual Higher alliances models qualification programs Education • Global linkages IGNOU partnership for degree programs NIIT Inside solutions • Largest onli
Slide 10: NIIT: Market Leader with Strong Credentials
NIIT: Market Leader with Strong Credentials • One of the largest providers of vocational and professional skills worldwide across various service sectors. Acknowledged market leader in India • Leading player in the school education segment in India. Positioned to take strong advantage of the emergin
Slide 11: Company Overview
NIIT SHARPENING THE EDGE COMPANY OVERVIEW
Slide 12: IT Training To GTD
IT Training To GTD Training and IT Services CLS business Global Talent CAGR >50% + Development Key Competencies Company SLS Developed: - Pedagogy - Management of ILS distributed delivery Acquisition of EK process, - Partnerships Launch of IFBI & Imperia Pioneered Demerger of Launch of NEP Franchisin
Slide 13: Servicing The Full Labor Supply Chain
Servicing The Full Labor Supply Chain School Learning Individual Learning Corporate Learning Solutions Solutions Solutions Target Audience School children Young adults Working professionals Value Proposition Academics Employability Productivity Customer School Individual Corporate • IT Training • On
Slide 14: NIIT: Last 5 Year Financial Track Record
NIIT: Last 5 Year Financial Track Record Rs Mn Revenue EBITDA CAGR: 28% 11,486 11,993 CAGR: 27% 1,569 10,068 1,186 7,951 1,036 603 774 4,507 FY06 FY07 FY08 FY09 FY10 FY06 FY07 FY08 FY09 FY10 Dividend Payout CAGR: 19% ˃ Number of Shares Outstanding: 214 214 231 143 165 million (FV of Rs 2 each) 116 ˃
Slide 15: Capital Structure
Capital Structure Total Capital employed – Rs. 9,601 million • No of Shares – 165.1 Mn • Face Value – Rs. 2 per share Secured Debt 31% Reserves Unsecured 55% Debt 10% Equity 4% Public, 27% Promoters, 34% Invest ments DMF and FI, Cash 16% 10% 5% Net Fixed FIIs, 29% Net Current Assets* Assets 55% * In
Slide 16: Businesses
NIIT SHARPENING THE EDGE BUSINESSES
Slide 17: Individual Learning Solutions
INDIVIDUAL LEARNING SOLUTIONS 17
Slide 18: ILS - Opportunity Space
ILS - Opportunity Space Total Working Professionals 19m 19.2m Working Target Pros 2m 2.3m Non- Tech Graduates Tech 0.4m 2.9m 3.3m Non-Tech Tech Students Students Students 13.6m 11.7m 1.9m Employability training is a huge opportunity 18
Slide 19: ILS: Our Reach
ILS: Our Reach • India : 591 Centers • China: 192 Centers • ROW: 159 Centers 19
Slide 20: Individual Learning Solutions-IT Training
Individual Learning Solutions-IT Training • Improving individual employability in IT Sector • Career, Career-edge and skills upgrade courses for Technology Partnerships* individuals • For Engineers, Science / Arts /Commerce graduates, working professionals • Instructor-led, supplemented by e-learnin
Slide 21: IFBI - Finance, Banking & Insurance Training
IFBI - Finance, Banking & Insurance Training • Career, Career-edge and Skills upgrade courses for individuals IFBI: Partnerships* • For graduates and working professionals • Instructor-led, supplemented by e-learning *Selected Creating job ready professionals for banking, insurance & financial servi
Slide 22: NIIT Imperia - Management Education
NIIT Imperia - Management Education • Executive management education for individuals • Career upgrade courses for working professional Imperia: Partnerships* • Synchronous learning delivery model • Instructor-led, supplemented by e-learning *Selected Enhancing reach of quality management education 2
Slide 23: NIIT Uniqua - Business Process Training
NIIT Uniqua - Business Process Training • Joint venture between Genpact & NIIT Partnerships* • Career, skills upgrade courses • Offers training to meet the growing requirement for professionals skilled in business/knowledge process outsourcing sectors *Selected Creating skilled workforce for the ITE
Slide 24: NIIT English Plus
NIIT English Plus • Aimed at rural and semi - urban youth of India • Provide basic English and professional life skills • Embedded modules on professional life skills • Effective learning through „Immersive Learning‟ methodology • Personal Digital Tutor for learning outside the classroom hours Engli
Slide 25: Training.com
Training.com • Courses in IT, sales, finance, banking, design, leadership, project management, professional development, Self-Paced Virtual Courses Labs European languages • Global online and hybrid delivery • Anytime, anywhere access eReference Brainbench Library Exams • 24X7 delivery support syste
Slide 26: School Learning Solutions
SCHOOL LEARNING SOLUTIONS 26
Slide 27: Schools: Opportunity Space
Schools: Opportunity Space • Teachers Training - 10 million Teachers 24x7 3,000 schools • Vocational Education - is an emerging Collaboration Portal area ERP 100,000 schools Math LAB & Science LAB IT Education Class Room 1 Mn schools Products and services for improving school education 27
Slide 28: SLS: Our Reach
SLS: Our Reach 9,437,063Students 383,236Teachers 105,684 Nodes 23,614 Hrs of Content 41,379 Private and Government Schools Instructors Private Schools 16,493 Schools NIIT has the widest reach in the market 28
Slide 29: NIIT eGuru Solutions Portfolio
NIIT eGuru Solutions Portfolio Interactive Class Room Math Lab Science Lab Quick School (ERP) Web & Multimedia curriculum Shared computing Widest range of offerings 29
Slide 30: Corporate Learning Solutions
CORPORATE LEARNING SOLUTIONS 30
Slide 31: Corporate Training Market
Corporate Training Market US Corporate Training Spending 55.8 58.5 56.2 51.1 48.2 Global training spend $100Bn+ $Bn • 14% decline in overall training spend in 2009 2005 2006 2007 2008 2009 • Outsourcing saw a lower decline, US: Spending On Outsourced as more companies chose to Training 16.8 outsourc
Slide 32: Our Credentials
Our Credentials Largest 12000+ e-Learning Person Years Content 50,000 Hrs of 20,000+ Training 150+ University of e-Learning Days per Year Courses Experience Library 1500+ print 3500+ e-learning 285,000+ Student 20,000 Hours catalog library Learning Hours of ILT 1500+ Professionals: Largest Content O
Slide 33: Corporate Learning Solutions
Corporate Learning Solutions • 3500+ titles; SAAS model Learning Products • 3.5 Mn+ learners on Khub (SAAS) • Largest print & eLearning library • Recurring revenues, long term partnerships Training • Multi year, multi geography relationships Outsourcing • Opportunities in India growth sectors •150+
Slide 34: Top brands considered when choosing a learning vendor
What are the top three brands you think about when considering a vendor for learning products and services? Unaided; CLO Magazine 0 5 10 15 20 25 30 35 40 45 SkillSoft Element K Other / Proprietary Depends GeoLearning HBP / HMM Learn.com Accenture NIIT Ninth House SumTotal Adobe AMA ASTD DDI Kaplan
Slide 35: Q3, FY'11
NIIT SHARPENING THE EDGE Q3, FY’11
Slide 36: Environment
Environment India GDP growth projected to remain strong (~8.5%); Inflation and volatile capital flows remain key risks Employers in India begin New Year (2011) with strongest hiring intentions since Q4 of 2008 with Net Employment Outlook at 42% (up 5 percentage points YoY): Manpower Employment O
Slide 37: Q3'11 – Financial Highlights
Q3‟11 – Financial Highlights Consolidated System wide revenues Rs. 4,147 million, up 5% YoY Net Revenues at Rs. 3,007 million, up 6% YoY EBITDA Rs. 370 million; up 19% YoY. EBITDA margin at 12%, up 130 bps. Profit before Tax Rs. 65 million, up 120% YoY Net Profit Rs. 129 million, up 36% Yo
Slide 38: Q3'11 - Awards & Recognitions
Q3‟11 - Awards & Recognitions NIIT has been conferred with the prestigious „Top IT Training Company Award 2010‟ by the country‟s leading IT publication- Dataquest, for 18th consecutive year NIIT USA received the prestigious Learning in Practice Award from Chief Learning Officer (CLO) magazine, w
Slide 39: Q3'11 - Consolidated Financials
Q3‟11 - Consolidated Financials (Rs. in mn) Q3'11 Q3'10 YoY (%) 9M'11 YoY (%) System wide Revenues 4,147 3,965 5% 13,904 5% Net Revenues 3,007 2,836 6% 9,246 2% Operating expenses 2,637 2,524 4% 8,056 1% EBITDA 370 312 19% 1,190 9% EBITDA% 12% 11% 130 bps 13% 78 bps Depreciation 222 190 17% 642 15%
Slide 40: Q3'11 - Business Mix
Q3‟11 - Business Mix Q3’FY10 Q3’FY11 NB System wide revenues- up 5% NB 3% 4% % Change CLS CLS 34% Individual +6% ILS-IT 35% ILS-IT 52% Schools -18% 53% Corporate +8% SLS SLS New Biz +26% 11% 9% EBITDA – Up 19% NB, NB, -45 ILS- -25 IT, Change CLS, CLS, 190 Individual +20% ILS- 88 121 IT, Schools -41%
Slide 41: Individual - IT
Individual - IT ` Mn Q3'11 Q3'10 YoY 9M'11 YoY System wide Revenues 2,190 2,067 6% 8,035 11% Net Revenues 1,077 964 12% 3,461 11% EBITDA 228 190 20% 785 11% EBITDA % 21% 20% 142 bps 23% 17 bps Q3’11 Enrolments up 8% YoY globally, India up 12% YoY Robust placements growth: Q3‟11 up 30%; CYD up 24
Slide 42: School Learning Solutions
School Learning Solutions ` Mn Q3'11 Q3'10 YoY 9M'11 YoY Net Revenues 363 442 -18% 1,108 -34% EBITDA 46 78 -41% 141 -36% EBITDA % 13% 18% -501 bps 13% -47 bps Q3’11 Schools added : 35 private schools addition ; takes 9M‟11 addition to 385 versus 330 added in FY10 Non Govt. revenue contributed 38
Slide 43: Corporate Learning Solutions
Corporate Learning Solutions ` Mn Q3'11 Q3'10 YoY 9M'11 YoY Net Revenues 1,446 1,339 8% 4,310 7% EBITDA 121 88 37% 352 19% EBITDA % 8% 7% 177 bps 8% 82 bps Q3’11 13% volume growth , driven by growth in Training Outsourcing and Online Learning Products (up 21% YoY) Margins at 8%, an improvement o
Slide 44: New Businesses
New Businesses ` Mn Q3'11 Q3'10 YoY 9M'11 YoY System wide Revenues 147 117 26% 452 69% Net Revenues 121 91 33% 368 80% EBITDA -25 -45 -88 Q3’11 FMT enrolments grew 57% signaling strong hiring in the Banking sector Added 10 more BFSI clients, taking total to 35 2nd intake of students to IGNOU‟s
Slide 45: Future Direction
NIIT SHARPENING THE EDGE FUTURE DIRECTION
Slide 46: The Building Blocks For NIIT's Future Are In Place
The Building Blocks For NIIT‟s Future Are In Place • NIIT‟s core competencies • New capabilities • Macro Trends • Lead Business indicators 46
Slide 47: Foundation Of Core Competencies
Foundation Of Core Competencies NIIT‟s core competencies, acquired over its 3 decades of existence, will remain foundational to its future Pedagogy Creation of quality learning materials Technology Distributed education process management Partnerships Building sustainable partnerships 47
Slide 48: New Capabilities Added Will Propel Business Forward
New Capabilities Added Will Propel Business Forward • Learning libraries - EK, SLS Then….. DLC • New Delivery models – SLT, Now….. Vlab • Online assessment systems • School Management System CLC • Online Learning Library • Low cost training centers – CLC, DLC • University partnerships • „NIIT Inside
Slide 49: Macro Trends & Business Indicators Are Favorable
Macro Trends & Business Indicators Are Favorable Trends Indicators • Accelerating GDP growth • Enrolments growth • Increased government • Growth in placements spending • Strong Order Book • Increasing profits of the corporate sector • Competitive wins • Indications of large hiring • Profitability im
Slide 50: A Renewed Focus On Growth
A Renewed Focus On Growth Expand Coverage • Expanded geographic coverage • Expanded Grow Horizontally demographic coverage e.g. Increase Depth District Learning • New Verticals and • New products - SAP, Centers, Segments addressed SAS, IBM • New Delivery • English Plus • New tie ups & Formats – • Tr
Slide 51: Increasing IP Led And Annuity Based Revenue, And Contribution From New Businesses
Increasing IP Led And Annuity Based Revenue, And Contribution From New Businesses IP Led Revenue 43% • Non-linear revenue growth 37% 40% will support profit growth 2008 2009 2010 Portion of OB > 1 year • Increasing proportion of annuity based order book 42% 46% 52% 2008 2009 2010 FY10: Revenue & EBI
Slide 52: ILS - Future Direction
ILS - Future Direction Key Business Challenges • Although improved, decision making by potential students continues to be slow, especially for long term courses Business Outlook • Cost-effective growth of enrolments, especially in Career segment • Continued growth in IMS and Diploma enrolments NIIT’
Slide 53: SLS - Future Direction
SLS- Future Direction Key Business Challenges •Rapid scale up of private schools business •Capital intensity in government schools Business Outlook • Growth in Private NIIT’s Initiatives and Responses schools on improved •Selectivity in government schools business; offering set developing models to
Slide 54: CLS - Future Direction
CLS- Future Direction Key Business Challenges / Opportunities • Rapid scale up of e-Learning Products business • Companies looking at outsourcing training • Softness in Custom Content development and in Print & Publishing Business Outlook NIIT’s Initiatives and Responses • e-Learning Products, Train
Slide 55: New Business - Future Direction
New Business- Future Direction Key Business Challenges • Leveraging Recruitment plans of Banks, Insurance Companies and BPO Companies into student enrolment through cost-effective customer acquisition Business Outlook • Expected to accelerate further on the back of NIIT’s Initiatives and Responses s
Slide 56: Leadership In The Century Of The Mind
Leadership In The Century Of The Mind 56