NIIT Limited · NSE:NIITLTD
NIIT — Investor Presentation (February 2009)
34 slides from NIIT's investor presentation, February 2009
Slide 1: Education, Employability, Productivity
Education, Employability, Productivity February 2009 1 Agenda Part I: NIIT Overview Part II: Environment Current Performance Business Direction 2 1
Slide 2: Part I: NIIT Overview - The Global Talent Shortage
Part I: NIIT Overview 3 The Global Talent Shortage Huge gaps in talent demand and supply in all sectors of the economy Increasing Globalization – Work mobility Changing Demographics – Ageing population Services led economy – New skill sets Talent Gap at the top; Skills Deficit at the bottom 4 2
Slide 3: India's Demographic Advantage and Skill Supply Chain
India’s Demographic Advantage: Global Workforce 2020 56 million shortage in the World 46 Million surplus in India Note: Potential surplus is calculated keeping the ratio of working population (age group 15-59) to total population constant. Source: US Census Bureau; BCG analysis Considerable investme
Slide 4: NIIT in this environment
Education, Employability, Productivity “Growth will get choked out if skills development does not take place”, Montek S. Ahluwalia – Planning Commission Huge gap in talent supply and demand, in all sectors of the economy Only 5% of labor force in 19-24 age group has one certifiable skill School infr
Slide 5: Leadership in Global Talent Development
Leadership in Global Talent Development Global Opportunity Set Globalization Demographics Services Led Economy Ageing Work Multi-Sector Population Mobility Growth Potential Personality Individuals Corporates Skills Knowledge Schools Multiple Government Delivery Distributed Formats Global Skills Deli
Slide 6: NIIT: Servicing the full labor supply chain
NIIT: 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 Trainin
Slide 7: NIIT's growth in the last 3 years
NIIT’s growth in the last 3 years 12,000 49% CAGR Revenue 10,068 10,000 7,951 8,000 6,000 4,507 4,000 2,000 - FY06 FY07 FY08 31% CAGR 37% CAGR 1100 1036 800 756 1000 EBITDA 700 PAT 900 774 800 600 547 700 + 13 % + 43 603 500 % 600 401 500 400 400 300 300 200 200 FY06 FY07 FY08 FY06 FY07 FY08 Acceler
Slide 8: Capital Structure and Shareholding Pattern
Capital Structure Total Capital employed – Rs. 8208 Mn Sources of Funds • No of Shares - 164.7 Mn • Face Value – Rs. 2 per share Secured Debt 29% Shareholding Pattern Reserves Unsecured 54% Debt 13% Equity 4% Public 28% Promoters 32% Application of Funds Investments 26% Cash DMF and FI 8% 5% FIIs Ne
Slide 9: Multiple Levers of Growth for NIIT
India Employability Training Opportunity Total Working Professionals 16.3m 19m Working Pros Target 2m 2.0m Non- Tech Tech Grads Graduates 0.4m Grads 2.9m 3.3m Non-Tech Tech Students Students Students 11.0m 9.8m 1.2m Currently addressed 400k; 40x opportunity 17 Multiple Levers of Growth for NIIT Expa
Slide 10: ILS - IT Training
ILS - IT TRAINING 19 IT Training • Individuals, 16-25 years • Career, Career-edge and Skills Upgrade courses • For Engineers, Science / Arts /Commerce graduates, Working Professionals • Instructor-led, supplemented by e-learning • India. China. Developing World Improving Individual Employability in
Slide 11: Demand for IT & ITES professionals
Demand for IT & ITES professionals Demand side: Skills IT workforce (‘000s) 2230 • Software: Development & Testing 1996 • Infrastructure Management 1621 • MIS implementation & Support 1293 • Multimedia 1059 • Voice/Tech Support 830 • Knowledge Process outsourcing • Vendor certification 2004 2005 200
Slide 12: Partnership with Leaders; NIIT in China
Partnership with Leaders Pillars of Information Technology OPERATING SYSTEMS NETWORKS INFORMATION APPLICATIONS DATABASES STORAGE 23 NIIT: In China • 192 centers • Ultra modern center in Shanghai • New center in Wuxi Software Park • “Best IT Training Company of the Year” Award 24 12
Slide 13: NIIT: Rest of the World
NIIT: Rest of the World •159 centers •Vietnam, Nigeria, Botswana •Latin American Centers of Excellence Continued expansion. Increasing recognitions 25 ILS – Financial Services and Management Training (FMT) Logos used are trademarks of respective organizations Partnership with leaders in the industry
Slide 14: English & Professional Life Skills
English & Professional Life Skills • Alliance with ETS for TOEIC testing • Acquisition of Evolv for English language training • Market potential – A huge untapped market In India – 11 mn college students • 90% face an “employability gap” • Main reason – Lack of English communication & Professional l
Slide 15: NIIT Institute of Process Excellence (NIPE)
NIIT Institute of Process Excellence (NIPE) The latest addition to NIIT’s offerings • Joint venture between Genpact & NIIT • Operating under the brand name ‘NIIT Uniqua’ • Offers training to meet the growing requirement for professionals skilled in business process knowledge • NASSCOM estimates addi
Slide 16: School Learning Solutions
School Learning Solutions 31 Opportunity Space • Teachers Training - 10 million Teachers • Vocational Education -24x7is an emerging area 3,000 schools Collaboration Portal ERP Math LAB & Science LAB 100,000 schools IT Education Class Room 1 Mn schools 32 16
Slide 17: Next 3 years addressable opportunity; NIIT SLS credentials
Next 3 years addressable opportunity Sarv Shiksha Abhiyan 600 districts ICT@School 60,000 schools PPP in Govt schools 6,000 schools Pvt Schools – Class room solutions 10,000 schools Pvt Schools- Lab Solutions 5,000 Schools School ERP & Portal Solutions 2,000 Schools Teacher’s training 500k Pre-servi
Slide 18: NIIT eGuru differentiators
NIIT eGuru differentiators Teaching & learning Materials eGURU LAB IT LAB Computer aided experimentation Server Academic impact measurements Comprehensive Lab solutions Support & service levels Designed with NCF objectives Curriculum solution and not just content Computer Aided Experimentation MATH
Slide 19: Hole In The Wall Education Limited (HIWEL)
Hole In The Wall Education Limited (HIWEL) A learning station in Cambodia A playground computer kiosk in every village 37 Corporate Learning Solutions 38 19
Slide 20: Our Credentials; Diverse Customer Portfolio
Our Credentials Largest 12000 + e-Learning Person Years Content 12,000 Hrs of 20,000+ Training 150+ University of Experience e-Learning Days per Year Courses Library 1500+ print 3500+ e-learning 285,000+ Student 20,000 Hours catalog library Learning Hours of ILT 1500+ Professionals: Over 2000 Larges
Slide 21: Corporate Training Market
Corporate Training Market US Corporate Training Spend *59 CAGR 3% 56 Training spend breakup 51 51 51 $Bn 2003 2004 2005 2006 2007 Global Training Outsourcing Market 2008E* APAC $0.5Bn EMEA CAGR: 18% $1.4Bn America $3.2Bn Global training spend $100Bn+ * Source: IDC, Bersin & Associates Strong potenti
Slide 22: Financial Performance: Business wise
Financial Performance: Business wise Revenue Rs Mn FY07 FY08 YoY ILS- IT 2,470 3,241 31% ILS – FMT 73 308 322% SLS 8,47 1,012 19% CLS 4,560 5,508 21% EBITDA Rs Mn FY07 FY08 YoY ILS- IT 434 664 53% ILS – FMT (91) (26) - SLS 99 131 32% CLS 355 266 (25%) 43 Part II: Environment Current Performance Busi
Slide 23: Global Economy: in turmoil
Global Economy: in turmoil Large parts of developed world reeling under recession All major markets trading at 40% to 60% below January 2008 levels Low liquidity, seized credit markets, extreme risk aversion Corporate sector operating in a state of uncertainty Consumer sentiment affected across sect
Slide 24: Education & Training Sector: key determinant of growth and recovery
Education & Training Sector: will remain the key determinant of economic growth and recovery • India’s Demographic Advantage: 56 million shortage in the World, 46 million surplus in India by 2020 • Only 5% of labor force has formal vocational training • Poor education infrastructure in India: Issues
Slide 25: NIIT: Current Performance - 9M FY'09 Consolidated Financials
NIIT: Current Performance 49 9M FY’09: Consolidated Financials 9M FY'09 9M FY'08 YoY System Wide Revenues 12,241 10,193 20% Net Revenues 8,478 7,344 15% Operating Expenses 7,656 6,613 16% EBITDA 822 731 12% OM 10% 10% (26 Bps) Depreciation 456 402 13% Other Income (10) (128) - Profit Before Taxes 35
Slide 26: 9M FY'09: Business Highlights
9M FY’09: Business Highlights • NIIT adjudged as a Business Super brand • NIIT awarded the Gold for Excellence in E-Learning Award by Chief Learning Officer magazine • ILS: Continued on steady growth path – IT: Partnership with SAS to offer training in Business Intelligence Technologies – FMT: Intro
Slide 27: ILS - IT: Highlights; FMT: Highlights
ILS - IT: Highlights Rs. Mn OND'08 OND'07 YoY 9M FY09 YoY System wide revenues 1,962 1,597 23% 6,566 29% Net Revenues 870 728 20% 2,948 26% EBITDA 165 130 27% 627 34% EBITDA % 19% 18% 106 bps 21% 127 bps For 9M FY’09 • SWR Geo Mix: India 64%, China 16%, ROW 20% • Enrolments: Overall + 20%; Edgeineer
Slide 28: SLS and CLS: Highlights
Rs. Mn OND'08 OND'07 YoY 9M FY09 YoY Net Revenues 370 213 74% 942 49% EBITDA 55 30 83% 134 53% EBITDA % 15% 14% 76 bps 14% 40 bps For 9M FY’09 • GSA contributed 72% of revenue, up 58% YoY; Non GSA grows 29% YoY • Nationwide launch of E-Guru Interactive Classroom product • Launch of web & multimedia
Slide 29: Element K; New Businesses: Highlights
Element K 57 New Businesses: Highlights Rs. Mn OND’08 Net Revenues 10 EBITDA (35) EBITDA % - • B2C: Launched across 9 centers ; 7 different courses offered • B2B: 900 hours of training imparted to Genpact employees • Placement partnerships with the leading players in the industry 58 29
Slide 30: Q3 Results: pointers to business prospects for medium term
Q3 Results: pointers to business prospects for medium term ILS SLS CLS Direction Evidence Impact/Outlook • Slower growth and • Higher placements • ILS growth will hiring in the IT and by NIIT in Q3 continue to be in Banking sectors • Edgeineers strong, albeit • Preference for enrollments up 20% some
Slide 31: Q3 Results: pointers to business prospects for medium term
Q3 Results: pointers to business prospects for medium term ILS SLS CLS Direction Evidence Impact/Outlook • US economy will • Significant slowdown • Positive growth – remain in in Custom Content will be driven by recessionary business Learning Products/ condition for most • Growth in Learning Trainin
Slide 32: Response to the current environment: Immediate
Response to the current environment: Immediate • Certification and short term products for enhanced market share • High end products for better realization • Establishing newer offerings: BPO Training, English Language Training ILS • Restrict center expansion • Capacity Consolidation • Aggressive ca
Slide 33: Summarizing: NIIT Today and Tomorrow
Summarizing 65 NIIT: Today and Tomorrow • We are today, the market leader with strong credentials and competencies • We have a strong financial track record, and in the past have successfully dealt with market adversities and uncertainties • We have successfully transitioned from an IT Training Comp
Slide 34: Leadership in the Century of the mind
Leadership in the Century of the mind 67 34