Niit Limited · NSE:NIITLTD
Niit — Investor Presentation (May 2015)
51 slides from Niit's investor presentation, May 2015
Slide 1: Annual Investor Meet
Annual Investor Meet MUMBAI, 2015
Slide 2: Agenda
Agenda • NIIT: Company Overview • Corporate Learning Group • Skills & Careers Group • Schools Learning Group • Business Transformation • FY15 Results Update • The Next Frontier: Future Direction 2
Slide 3: NIIT: IT Training To GTD
NIIT: IT Training To GTD CLG Key Competencies Training and IT Developed: Services business Global Talent Development SCG - Pedagogy CAGR >50% + Company - Management of distributed delivery process, SLG - Partnerships IFBI, Imperia MTS, Cloud Campus, NYJ Pioneered Demerger of Franchising in IT Servic
Slide 4: NIIT: Business Structure
NIIT: Business Structure Corporate Learning Skills & Careers Schools Learning Rs 4,878 Mn, 51% Rs 3,283 Mn, 34% Rs 1,413 Mn, 15% Productivity Employability Academics US, Europe India, China India • Managed Training • Service Sector skills • Teaching & Learning Services • Professional Life skills Sol
Slide 5: Capital Structure
Capital Structure Shareholding Total Capital Employed – Rs. 6,611 million Debt 23% Promoters 34% Public Equity Cash Net 43% 77% 13% Current Assets 25% FII 10% DMF & FI Net 13% Investments* Fixed 45% Assets 17% No of Shares: 165.1 million *NIIT Limited owns 23.8% of NIIT Technologies * As of March 31
Slide 6: NIIT has made significant contribution to training and education, globally
NIIT has made significant contribution to training and education, globally Skilled over 4 M students over the last 10 years Career courses in IT, ITES, BFSI, Mgmt, Retail, Telecom etc 578 B2C education centers 20% higher premiums for agents on- Technology enabled boarded for a leading Insurance comp
Slide 7: …and has received numerous recognitions and awards
…and has received numerous recognitions and awards Highest Rated Education Brand Ranked 4th Best Company to work for in India. No 1 in Education and Training NIIT Nguru awarded as “Best Interactive Solution 23 Brandon Hall awards for Provider” by Corporate Training ASSOCHAM NIIT USA ranked among the
Slide 8: Business Overview
Business Overview
Slide 9: Corporate Learning: End to End Servicing Capability
Corporate Learning: End to End Servicing Capability Helping Companies Over 70 Industry Awards Run Training like a Business CURRICULUM & LEARNING LEARNING STRATEGIC LEARNING CONTENT DELIVERY ADMINISTRATION SOURCING TECHNOLOGY 9
Slide 10: Corporate Learning: Marquee Customers
Corporate Learning: Marquee Customers Logos represented above are trademarks of respective companies 10
Slide 11: Skills & Careers: A New Way Of Learning
Skills & Careers: A New Way Of Learning 11
Slide 12: Skills & Careers: Expanding Product Portfolio
Skills & Careers: Expanding Product Portfolio Current 2007-2012 Software Engineering IT Banking & Finance 1982-2006 Banking & Finance Business Process Mgmt Brick IT & Business Process Mgmt Management Education Portal Professional Life Skills SMAC Management Education Digital Marketing E-Commerce Ret
Slide 13: Schools Learning: nGuru Solutions Portfolio for Schools
Schools Learning: nGuru Solutions Portfolio for Schools Teacher Training Math Lab School Consultancy Quick School @ Cloud IT, Web & Multimedia 13
Slide 14: Schools Learning: Credentials
Schools Learning: Credentials 10 Mn + Students 400 k + Teachers 100 k + Nodes 24 k + Hrs of Content Private and Government Schools 45 k + Instructors Private Schools 16 k + Schools Cumulative 14
Slide 15: Business Transformation
Business Transformation
Slide 16: Business Transformation Journey
Business Transformation Journey • Top management succession and strengthening the leadership team • Rationalization of Subsidiaries: Scheme of Arrangement • Reassessment of existing Business/ Geographies/ Products Focus on Asset light, Growth oriented Businesses 16
Slide 17: Business Transformation: Scheme of Arrangement
Business Transformation: Scheme of Arrangement CLG NIIT SCG Limited SLG 2 1 • Transfer of school business Merger of Evolv, Scantech and NOLL with NIIT. Indian JVs Evolv Scantech NOLL HIWEL Overseas and India India India India operations operations 23.8% NTL Appointed Date: 01 April 2014 17
Slide 18: Business Transformation: Resulting Structure
Business Transformation: Resulting Structure CLG NIIT • Simplified entity structure Limited SCG to reflect realigned business operations • Enabling structure for 23.8% 100% Indian JVs more funding NTL MLSL and Overseas operations opportunities for Schools operations business SLG Appointed Date: 01 A
Slide 19: Business Transformation
Business Transformation Reassessment of existing Business/ Geographies/ Products 1. Exit capital intensive government businesses and capex driven models in schools 2. Sharpen focus on Skills & Careers business on the larger markets and exit other international geographies 3. Capacity & Structure con
Slide 20: FY15 / Q4 Results Update
NE) T FRONMER FY15 / Q4 Results Update
Slide 21: Environment
Environment • Continuing global economic uncertainty due to financial and geo-political risks; Sharp volatility in commodity prices and exchange rates creates risks and opportunities • Corporate spending on training in US and Europe remains robust; Companies are looking for ways to drive efficiency
Slide 22: NIIT Growth Platforms
NIIT Growth Platforms Corporate Individual Skills Schools MTS Cloud Campus Yuva Jyoti nGuru 24 global customers 107,820 enrolments 37,000+ 2,627 schools Revenue visibility at 334 centres cloud enrolments NGSA contributes $179 million enabled Reach expands to 62% to SLS business MTS c
Slide 23: FY15: In Perspective
FY15: In Perspective Corporate Learning Group (CLG) Revenue at Rs 4,878 Mn (up 23% YoY); EBITDA margin at 12% MTS revenue up 35% YoY, contributes 87% to CLS compared to 79% in FY14 Added 4 new MTS customers and Scope expansion for 3 existing customers Revenue Visibility at $ 179 mn Skills &
Slide 24: Key Financials
Key Financials (Excluding One Time/Business Transformation impact for comparison purposes*) INR Mn Q4 FY15 Q4 FY14 YoY Q3 FY15 QoQ FY'15 FY'14 YoY Net Revenue 2,235 2,329 -4% 2,482 -10% 9,574 9,510 1% Adj. EBITDA 76 131 -42% 57 32% 442 620 -29% Adj. EBITDA % 3% 6% -223 bps 2% 109 bps 5% 7% -191 bps
Slide 25: Key Financials – Reconciliation with GAAP accounts
Key Financials – Reconciliation with GAAP accounts INR Mn Q4 FY15 FY15 Adj. EBITDA 76 442 Less: Operational Business Transformation exp 134 134 EBITDA (58) 308 Adj. EBIT (75) (179) Less: Additional provision for Dep. & Amort. 452 452 EBIT (661) (765) Adj. PAT (149) (22) Less: Exceptional Business Tr
Slide 26: Business Mix
Business Mix Q4 FY15 Net Revenue Q4 FY14 Schools Growth Schools 17% Corporate 8% 18% Corporate Corporate Skills & 52% Skills & Career -17% 46% Schools -7% Skills & Careers Careers 31% NIIT -4% 36% FY15 FY14 Schools Schools 15% Growth 16% Corporate Corporate Corporate 23% 42% Skills & 51% Skills & Ca
Slide 27: Corporate Learning Group
Corporate Learning Group Rs. Mn Q4 FY15 Q4 FY14 YoY Q3 FY15 QoQ FY15 FY14 YoY Net Revenues 1,157 1,076 8% 1,360 -15% 4,878 3,971 23% EBITDA 135 125 8% 157 -14% 565 472 20% EBITDA % 12% 12% 6 bps 12% 12 bps 12% 12% -31 bps Q4 FY15 • Constant currency Revenue growth at 14% YoY • 1 new MTS customer sig
Slide 28: Skills & Careers Group
Skills & Careers Group Rs. Mn Q4 FY15 Q4 FY14 YoY Q3 FY15 QoQ FY15 FY14 YoY Net Revenues 692 836 -17% 808 -14% 3,283 3,985 -18% EBITDA -79 -17 -361% -108 27% -178 50 -459% EBITDA % -11% -2% -934 bps -13% 198 bps -5% 1% -668 bps Q4 FY15 • Overall Enrolments at 53,537; Order Intake of Rs 766 Mn; • Ove
Slide 29: Schools Learning Group
Schools Learning Group Rs. Mn Q4 FY15 Q4 FY14 YoY Q3 FY15 QoQ FY15 FY14 YoY Net Revenues 386 417 -7% 314 23% 1,413 1,554 -9% EBITDA 19 23 -15% 8 145% 56 99 -44% EBITDA % 5% 6% -48 bps 3% 252 bps 4% 6% -240 bps Q4FY15 • NGSA revenue at Rs 251 Mn; contributes 65% to revenue mix • Added 162 schools, or
Slide 30: People
People 3,279 3,129 3,021 3,028 2,969 2,942 2,927 2,786 AMJ'13 JAS'13 OND'13 JFM'14 AMJ'14 JAS'14 OND'14 JFM'15 * excludes project retainers Headcount down 242 QoQ and down 156 YoY 30
Slide 31: Future Direction
Future Direction
Slide 32: The Next Frontier: Strategic Agenda
The Next Frontier: Strategic Agenda Technology Enabled Shared Service Platform 32
Slide 33: Corporate Learning Group
Corporate Learning Group Future Direction
Slide 34: CLG: Corporate Training Spending
CLG: Corporate Training Spending 15% Corporate Training Spend 12% 10% in USA: $85+ Bn 6% 2% Global Training Spend: $125Bn+ Source: Bersin By Deloitte -11% -11% 2007 2008 2009 2010 2011 2012 2013 • Continued surge in corporate training spending, as US corporations focus on reskilling their workforce;
Slide 35: CLG: Managed Training Services
CLG: Managed Training Services MTS Revenue (Rs Mn) Number of MTS Customers 4253 24 21 3148 2,174 5x in 4 years 14 1,544 9 852 6 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 MTS contribution to CLS • Large market with attractive growth 87% 79% opportunity; Increasing contribution from MTS 72% 63
Slide 36: CLG: Managed Training Services
CLG: Managed Training Services Delivering Efficiency and Effectiveness In Training 36
Slide 37: CLG: Taking MTS to Next Level Of Growth
CLG: Taking MTS to Next Level Of Growth Comprehensive Engagements Bid Process 4 Mgmt • Big ticket annuity Productivity 3 contracts • Pre-filter RFPs • Domain expertise Procurement 2 • Contracting Maturity • Grow global delivery capability Efficiency • Step up people • Improve Win Rates • High Capabi
Slide 38: Skills & Careers Group
Skills & Careers Group Future Direction
Slide 39: 2022 Projections: Huge Capacity Creation Required
2022 Projections: Huge Capacity Creation Required Total supply by 2022 @ current capacity 61.5 (2013-14) Addition to workforce 115 @ 12.8 million per year 11X 8x Reskilling / upskilling of 90% of existing 611 workforce (679 million) Reduction due to 48 ageing/ retirement * Source: McKinsey analysis;
Slide 40: Skill Gaps: Sectorial Employment & Growth Opportunities
-10 10 20 30 40 0 Building, 31 Construction & Real 17 Retail Beauty and 10 Wellness Transportation & 12 Logistics Furniture & 7 Furnishing Handlooms & 6 Handicrafts Sectors Tourism, Hospitality 6 & Travel 6 Textile & Clothing 5 Domestic Help Source: Sector wise Human Resource and Skill Requirements
Slide 41: Skill Gaps: Sectorial Employment & Growth Opportunities
-10 10 20 30 40 0 Building, 31 Construction & Real 17 Retail Beauty and 10 Wellness Transportation & 12 Logistics Furniture & 7 Furnishing Handlooms & 6 Handicrafts Sectors Tourism, Hospitality 6 & Travel 6 Textile & Clothing 5 Domestic Help Source: Sector wise Human Resource and Skill Requirements
Slide 42: SCG: Business Transformation
SCG: Business Transformation Skills Technology New India Integrated Marketplace Service Intensive / One SCG B2B/B2C with 360◦ Structure China Sector Skills Multi business Partner Modal Ecosystem IT, IT, IFBI, India Imperia, China Non-IT Standalone Centre Everything Old Centre B2B, B2C Driven In hous
Slide 43: SCG: 360 Degree Partner Ecosystem
SCG: 360 Degree Partner Ecosystem Industry Demand Learner Needs • Certified Skills • Learn • Source to Hire • Get Certified • Skills Upgrade • Get/Change Job • Get Promoted B2B Engagement Multi Modal Marketplace Ecosystem Needs NIIT Managed Services • Brand Association • Reach Building a Comprehensi
Slide 44: Schools Learning Group
Schools Learning Group Future Direction
Slide 45: SLG: Focus Areas
SLG: Focus Areas • Defocussed from government schools Be a School business Service Private Schools • Exited capex driven business (B2B) models in private schools Service Govt. • No Nationally Dominant Schools (B2B) Player in private schools space with comprehensive Service Private product portfolio;
Slide 46: SLG: Current B2B Opportunity Set
SLG: Current B2B Opportunity Set CBSE 62% ICSE ~120K Private Schools NGSA: Share of Rev 12% 57% 2% IB 47% 47% 0.1% 40% State Boards 86% FY 1 1 FY 1 2 FY13 FY14 FY15 NGSA GSA Comprehensive product portfolio Revenue (Rs Mn) 951 668 Leadership position in white spaces (IT, 833 538 895 Math Lab, QS
Slide 47: SLG: Next Frontier For B2B Business
SLG: Next Frontier For B2B Business Assets • High capital intensity • High people dependence In School Service People • Diminished value of IP • Linear, non-scalable IP B2B Business Cloud IP • IP driven Remote Service • Asset light People • Technology intensive Services • Non linear, highly scalable
Slide 48: SLG: K-12 Opportunity Landscape
SLG: K-12 Opportunity Landscape • NIIT’s existing business targets a portion School Fee of the fee that parents pay to schools. Parental • Spending outside schools represents a Spending large portion of total spending related to Out of education and development for kids School Spend • A B2C player h
Slide 49: SLG: Grabbing the B2C Opportunity
SLG: Grabbing the B2C Opportunity Big Data based Leverage Existing Assets Adaptive Learning • Students in Private (1.5Mn) and Platform Government schools (2Mn) students serviced by SLG • NIIT Students/Alumni EDUTAINMENT • Schools IP • NIIT Brand USEFUL INFORMATION • Offline Reach SELF-PRACTICE SELF-
Slide 50: Overall
Overall Future Direction
Slide 51: Technology Enabled Shared Service Platform
Technology Enabled Shared Service Platform 51