Investor Presentation March 20, 2015 Disclaimer Certain statements - - PowerPoint PPT Presentation

March 20, 2015

Investor Presentation

2 HGS Confidential – www.teamhgs.com March 20, 2015

Disclaimer

Certain statements in this presentation concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking

• statements. The risks and uncertainties relating to these statements include, but are not

limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in the BPM industry including those factors which may affect our cost advantage, wage increases, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-timeframe contracts, client concentration, restrictions on immigration, our ability to manage our international

• perations, reduced demand for technology in our key focus areas, disruptions in

telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the Companies in which Hinduja Global has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Hinduja Global may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. The company does not undertake to update any forward- looking statement that may be made from time to time by or on behalf of the company.

HGS Overview

4 HGS Confidential – www.teamhgs.com March 20, 2015

About us

HISTORY

• Part of the Hinduja Group, in the BPM business since 2000
• Erstwhile HTMT, IT & BPM business demerged October 1, 2006
• Rebranded as HGS in 2008

SNAPSHOT VALUE PROPOSITION

• FY 14 Revenues - US $412 mn
• FY14 EBITDA - US $53 mn
• Presence in 11 countries
• 28,000 + employees
• 140 active clients for the BPM business

(excluding payroll clients)

• CAGR of greater than 25% over last 5 years,

increasingly non-linear

• Improving margins y-o-y, with a TTM EBITDA

growth rate of 32%

• Strong balance sheet with low Debt/Equity ratio
• f 0.42x
• Track record of consistent dividends

5 HGS Confidential – www.teamhgs.com March 20, 2015

Who we are

• Best Mid-Sized Contact Centre (Outsourced) by Contact Centre World Awards –

November 2013

• ‘Best Contact Center’ award in FY 14 (second consecutive year) at Contact Center

World EMEA finals

• Best Outsourced Provider Runner Up – Call Center Week – July 2013
• Global Services 100 Survey - Top 2 Call Center Companies globally: Neo-IT & Global

Services Magazine

• Best Under A Billion – Forbes Asia

6 HGS Confidential – www.teamhgs.com March 20, 2015

HGS is recognized as one of the leading players in Contact Center Outsourcing space by the analyst and advisor community In the past quarter, HGS have been featured in a number of high profile reports that showcase our vertical expertise and extensive capabilities to potential future buyers

Who we are

• Nelson Hall recognized HGS as a Leader in the Customer Management Services for telecommunications, cable

and satellite

• Everest Group included HGS as a Major Contender in their Peak Landscape for banking, financial services and

insurance

• Everest Group included HGS in their Healthcare Contact Center Outsourcing Peak Landscape
• Gartner included HGS in the Magic Quadrant for Customer Management Contact Center BPO
• HfS Research included HGS in their Telecom Operations assessment Blueprint
• HfS Research included HGS in their Marketing Operations and Digital Engagement Management Blueprint
• Nelson Hall has published a profile of HGS Healthcare Provider capabilities

7 HGS Confidential – www.teamhgs.com March 20, 2015

Who we are

Analytics Innovation

Marketing and Digital Enablement Services Consumer Interaction Services Business Services Customer Experience Management Digital Enablement Social Media Engagement Digital Marketing Analytics & Insight Transaction Servicing Business Solutions Voice Solutions Digital Assist – chat, email, video Social Care Mailroom Solutions Interaction Transformation

8 HGS Confidential – www.teamhgs.com March 20, 2015

What we do

Almost all HGS day to day activities relate to consumer transactions and interactions

Healthcare/ Insurance

• 58 Million transactions,

10 Million calls, 2.7 Million emails per annum

• Annual claim payout of

$11.5 billion USD and $1.3 billion USD recoveries initiated for 4

• f the Top 10 healthcare

payers and several large hospitals/health systems in the US

• Only credit card issuer to

win the J.D. Power Award for customer experience 6 consecutive years driven by HGS’s best in class NPS customer service - supporting all aspects of consumer financial transactions

• Providing extensive

consumer support for land lines, wireless, satellite, IPTV, hi-speed internet – from supporting the consumer from the point of purchase to end of service

• HGS provides the best

service across all partners and internal centers consistently; while another clients operation recently won “best mid sized call center worldwide”

• National technical support
• rganization for industry

leading tablets and smartphones

• Supporting many consumer

electronics manufacturers and distributors from purchase support to post warranty servicing

• Support over 3000

consumer branded products for 8 European countries for client enquires include telephone, paper, email and social media

Financial Services Telecommunications Consumer Products

9 HGS Confidential – www.teamhgs.com March 20, 2015

What we handled in FY 2014

$11.5

Billion Claims Payout

in Healthcare Insurance

2.8

Million Pay-slips

Processed over

58

Million Transactions

More than in Healthcare Insurance

441

Million Calls

Attended to Over

2.6

Million Web Chats

Handled Over

7.1

Million E-mails

Responded to More Than

10 HGS Confidential – www.teamhgs.com March 20, 2015

What We Do – Industry Sectors

Continued Growth in the Healthcare Sector

* Based on YTD Dec’14 Financials

28.9%

Telecom & Technology

13.7%

Consumer Elec, Products, Svcs & Retail

33.8%

Health Insurance, Pharma & Healthcare

7.8%

BFS

2.5%

Chemicals & Biotech

5.8%

Media

7.5%

Others

Healthcare/ Insurance (FY 2014)

• 58 million transactions, 10 million calls, 2.7

million emails for 4 of the top 10 healthcare payers and several large hospitals and health systems

Financial Services

• Best in class NPS customer service -

supporting all aspects of consumer financial transactions

Telecommunications

• Provides consumer support for land lines,

wireless, satellite, IPTV, hi-speed internet – supporting the consumer from the point of purchase to end of service

• Won “best mid sized call center worldwide”

for one of the clients

Consumer Products

• Tech-support for industry leading tablets and

smartphones and many consumer electronics manufacturers from purchase to post warranty servicing

March 20, 2015 11 HGS Confidential – www.teamhgs.com

What we do – Our Service offering Mix and delivery model

4%

CRM Non Voice

75%

CRM Voice

21%

Transaction Processing

37%

Offshore

63%

Onshore

Pure play BPO companies have

30 - 40% offshore revenues

IT services have around 70%

• ffshore revenues

12 HGS Confidential – www.teamhgs.com March 20, 2015

Milestones in our growth story

2000 2001 - 2005 2006 - 2010

• Launch of HTMT

brand

• First International

Insurance customer with 23 seats 2011 - 2014

• Acquisition of

Philippines center: C-Cubed / Source 1 Asia

• Acquisition of

Source One

• Acquisition of Affina

in US

• Strategic foray into

National Markets

• UK entry
• Entry into Canada
• Entry into Healthcare

provider market space

• Entry into HRO space
• Expansion in Jamaica

and Middle East

A Start Enter New Geos Growth Global Footprint / One HGS

13 HGS Confidential – www.teamhgs.com March 20, 2015

Our USP

1 As per Everest Group’s PEAK Matrix 2014 classification model

Success at HGS has

4 distinct

cornerstones

1 2 3 4

Domain Expertise

• Technology / Media / Telecom
• Healthcare, Insurance, BFS
• Consumer Electronics & Packaged Goods
• Other Verticals: Government, Publishing, Energy

& Utilities, Transportation & Logistics

Easy to do Business

• The hallmark of our success has always been

the flexibility and agility with which we approach our customer’s dynamic needs, designing solutions to create long-term value

• Classified as a “major contender” in the BPM

space by Everest Group1

Globally Local

• Presence in India, USA, Canada, UK, Europe,

Philippines, and Jamaica

• Philosophy of “Right Sourcing”: Getting the
• nshore-offshore mix right for round-the-clock

productivity, shorter lead-times, faster response times and cost benefits to clients

Operational Excellence

• Only company in the world to have

eSCM – SP 4 certification across 3 geo’s simultaneously

• Significant client tenure; with some

clients of more than 3 decades!

• CSAT scores amongst the best in class.

14 HGS Confidential – www.teamhgs.com March 20, 2015

The Marketplace and Demand Outlook

Source: Gartner

Marketplace Dynamics Demand Environment

• Total BPM market is over

$160 billion

• In-house BPM 4 times the

size of the outsourced BPM market

• Next 5 year CAGR for BPM

expected to be 5.9% (Gartner Q1, 2013 forecast)

• Billion Dollar Plus players in

this are still only a handful, who grew between 5% to 20%

• Essentially a large,

fragmented but growing market, enough for everybody to play in

• Strong U.S recovery driving
• rganic volume growth, both
• nshore and offshore
• Canada is an under-penetrated

market for both outsourcing and offshoring

• UK and Europe subdued; first

signs of recovery visible, growth expected to pick up with a lag of 6-9 months

• Offshoring momentum strong
• India domestic business

environment continues to be challenging, wait and watch approach, portfolio rationalization complete

15 HGS Confidential – www.teamhgs.com March 20, 2015

Pillars of our Strategy

• Good mix of tenured

leadership and new talent from the industry

• From the top management

institutes in India and Abroad

• Strong career development

and performance management processes

• Attractive career paths, job

enhancements, ESOPs and profit share plans

• Track record of attracting

and retaining high performers

• Developing offerings in New

Age Customer Interaction Management Services like self-service, web, social media and analytics

• In-house IT teams deliver

proprietary workflow and process automation platforms, interactive services, animation, learning and knowledge management systems

• Entry into Philippines, US,

UK and Canada through acquisitions to achieve speed of market entry

• Entry in Healthcare Provider

Market through EBOS and Payroll through HCCA

• Emerging interest in Latin

America and Middle East.

• Revenue CAGR of over 25%

in the last 5 years when the world went through deep recession

• Significant Investments in

sales and marketing

• Impressive track record of

mining and growing tenured client relationships

Investments in Growth M&A for new markets and competencies Innovation and New Product Development Robust Talent Management

16 HGS Confidential – www.teamhgs.com March 20, 2015

HGS M&A Strategy

ACCESS TO NEW CAPABILITIES & COMPETENCIES ACCESS TO NEW MARKETS ACCESS TO EMERGING TECHNOLOGIES SCALE

• Right valuations and strict

Payback norms

• Avoid auctions; private, off-

market deals

• Right size, business and

cultural fit

• Take time to integrate; single

brand in the market

• Retain leadership

17 HGS Confidential – www.teamhgs.com March 20, 2015

Onshore Acquisition Drives Offshore Growth

53.0 65.2 71.9 78.2 80.5 81.3 84.0 90.1 0.0 20.0 40.0 60.0 80.0 100.0

FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14

US Onshore Revenue (USD mn)

*Annualized

53.0 65.2 71.9 78.2 80.5 81.3 84.0 90.1 47.8 67.7 70.6 82.7 101.3 111.4 128.5 130.1

• 50.0

100.0 150.0 200.0 250.0

FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14

Rev in USDmn Offshore Onshore CAGR 15% CAGR 8%

Financial Overview

19 HGS Confidential – www.teamhgs.com March 20, 2015

Tenured Client Relationships

15%

Top Client

35%

Clients 2-5

14%

Clients 6-10

13%

Clients 11-20

23%

Others

Top 20 clients contribute 77% of the Total Revenue 6%

Client Tenure – Over 20 Years

66%

Client Tenure – 10-20 Years

22%

Client Tenure – 5-10 Years

6%

Client Tenure – Below 5 Years

66% of Revenues from clients with more than 10 years tenure

* Based on YTD Dec’14 Financials

Client Concentration Revenue by Tenure

March 20, 2015 20 HGS Confidential – www.teamhgs.com

37% of revenues originated have offshore delivery

27%

India

11%

UK

19%

Canada

27%

USA

16%

Philippines

62%

USD

8%

INR

19%

CAD

11%

GBP

Revenue by Billing Currency Revenue Distribution by Geo YTD Dec’14

March 20, 2015 21 HGS Confidential – www.teamhgs.com

USD/INR and USD/Philippine Peso variations impact our financials

42.53 44.25 40.00 41.00 42.00 43.00 44.00 45.00 46.00

USD/PHP

49.58 62.12 45.00 50.00 55.00 60.00 65.00 70.00

USD/INR

Over the last 3 years: Rupee has depreciated around 25% And Philippine Peso (PhP) has depreciated only about 4% HGS hedges up to 75% of USD/ Rs and USD/ PhP revenues

March 20, 2015 22 HGS Confidential – www.teamhgs.com

Revenue Growth of over 25 % per annum

8,920 10,730 15,540 19,830 25,090 28,010

• 5,000

10,000 15,000 20,000 25,000 30,000 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 ( YTD Dec 14 Annualised)

Rs in m

23 HGS Confidential – www.teamhgs.com March 20, 2015

Revenue & Profitability Trend

• Growth of HGS in FY 14 (in Rupee terms) was 26.3%
• Of this organic (currency neutral) growth was 14.6%, growth due to exchange rate was 10.2%, and growth due to full year

impact of EBOS acquisition (in October, FY 13) was 1.5%. * Business ROCE is calculated as EBIT (excl. Treasury Income) / Capital Employed (excl. Treasury Surplus)

15,543 19,834 25,049 12.8% 12.1% 16.8% 11.8% 11.3% 12.9% 6.8% 4.6% 6.8%

• 5,000

10,000 15,000 20,000 25,000

0% 5% 10% 15% 20% FY 12 FY 13 FY14

Revenues in Rs mn Revenue Business ROCE% EBITDA % PBT% PAT%

March 20, 2015 24 HGS Confidential – www.teamhgs.com

FY 15 Quarterly performance

Strong growth in the Healthcare sector ; Profitability subdued due to ramp costs in Philippines

25 HGS Confidential – www.teamhgs.com March 20, 2015

HGS Strategy – Focus on Healthcare Business

Healthcare business has grown at a CAGR of 22% over the last 5 years

* Based on YTD Dec’14 (Annualized)

73.4 90.5 114.5 154.9 22.7% 24.8% 27.8% 33.8% 20.0% 22.0% 24.0% 26.0% 28.0% 30.0% 32.0% 34.0% 36.0% 38.0% 40.0%

• 20.0

40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 FY 12 FY 13 FY 14 FY 15* Healthcare Revenue in USD mn Healthcare Revenue As a % of Total Revenue

March 20, 2015 26 HGS Confidential – www.teamhgs.com

Share of India Domestic CRM business reducing

* Based on YTD Dec’14 (Annualized)

1,675 1,588 1,570 1,680 227 389 553 587 10.8% 8.0% 6.3% 6.1% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%

• 500

1,000 1,500 2,000 2,500 FY 12 FY 13 FY 14 FY 15* Revenue in Rs Million India Payroll Business India CRM Business India CRM as % of Total Revenue

27 HGS Confidential – www.teamhgs.com March 20, 2015

Summary Financial Profile – As at 31st Dec 2014

• Book Value taken is as reported on QE Dec 2014
• Stock prices and USD/INR exchange rate latest available prices
• Total Debt includes foreign currency debt taken at applicable exchange rates

HGSL Particulars Rs. USD Net Worth (in millions) 15,561.5 246.3 Book value per share 752.4 11.9 Price per share 550.0 9 Dividend per share (FY 14) 20.0 0.3 EPS (TTM) 76.7 1.2 P/E Ratio (TTM) 7.2 7.2 Gross Debt (in millions) 6,297.0 99.7 Total Cash (in millions) 5,647.0 89.4 Net Debt (Net Cash) (in millions) 650.0 10.3 Net Debt/EBITDA 0.20x 0.20x Total Debt/Equity 0.40x 0.40x

28 HGS Confidential – www.teamhgs.com March 20, 2015

Leverage Profile

(Rs. Million) Dec 31, 2014 Mar 31, 2014 Total Debt 6,297 6,342 Less: Cash and Treasury Surplus 5,647 5,618 Net Debt/ Net Cash 651 724 Net Worth 15,662 14,521 Net Debt/ EBITDA 0.20x 0.22x Total Debt/ Equity 0.40x 0.44x

In Conclusion

30 HGS Confidential – www.teamhgs.com March 20, 2015

Summing it up

Big company capabilities with entrepreneur spirit

HGS (Revenue over $400 mn) is a part

• f the multi-billion dollar Hinduja

Group with big company attributes. We are entrepreneurs at our core and are known to be nimble and responsive with innovative customer centric solutions

Unique Local UK, Canada and USA Operating Model

Our local CEO’s and leadership teams

• perate their business with complete

P+L accountability and empowerment. These teams are from the local markets, providing extensive local client insight and intimate knowledge and a fabric within the local markets

Onshore Strategy and Investments

HGS’s industry leading 67% of revenue being delivered domestically enables empathy and consumer centricity to effectively support our clients and their customers

Financial Strength

Debt-free and with the backing of our multi-billion dollar parent company, allows us to invest in our people, process, technologies, and business models that create value for our clients including carve outs, asset monetization and transformational agreements with committed outputs

Operational Excellence

Our heritage and business excellence framework enhances our clients business often reducing HGS fees and dramatic business value through automation, elimination and self serve

Client specific and industry insight

Our long tenured relationships across the entire consumer channel suite, allow HGS to act on our clients behalf to resolve and support their clients with deep industry insight in all methods that the consumers desire – voice, web, email, paper, SMS, social Media, video, IVR and self service

Peer Comparison

32 HGS Confidential – www.teamhgs.com March 20, 2015

Peer Comparison - Growth

16.1% 11.8% 9.4% 9.2% 6.6%

• 1.3%
• 2.0%

2.0% 6.0% 10.0% 14.0% 18.0% HGS* Sykes Genpact WNS EXL FSL* FY 14 USD Growth rate

* Currency Adjusted growth rate (in USD)

March 20, 2015 33 HGS Confidential – www.teamhgs.com

Peer Comparison: TTM ending Dec 2014

$/RE exchange rate used – INR 61.20 to the dollar (average for the period Jan’14 to Dec ‘14) Particulars HGSL FirstSource Genpact WNS Sykes EXL TTM data in $ mn Net Sales 448.09 502.75 2,279.44 531.36 1,327.50 499.29 TTM Growth 14.8% 1.8% 6.9% 8.1% 5.1% 4.4% EBITDA 54.44 62.15 333.11 100.85 151.68 88.82 Growth 6.6% 9.9%

• 4%

26% 37.8%

• 9.4%

EBITDA% 12.1% 12.4% 14.6% 19.0% 11.4% 17.8% PBT 35.03 39.17 249.52 78.72 77.16 37.81 Growth

• 6.1%

30.6%

• 18%

62% 50.3%

• 41.7%

PBT% 7.8% 7.8% 10.9% 14.8% 5.8% 7.6% PAT 25.92 37.76 192.24 57.24 57.79 32.48 Growth

• 9.3%

32.7%

• 17%

57% 55.2%

• 32.4%

PAT% 5.8% 7.5% 8.4% 10.8% 4.4% 6.5% Effective Tax % 26.0% 3.6% 23.0% 27.3% 25.1% 14.1% Reported ROCE 11.6% 9.8% 14.2% 16.8% 10.9% 7.2%

Thank You

For further information please contact: Name Surname Job title Email: name.surname@teamhgs.com Direct line: 1-XXX-XXX-XXXX Mobile: 1-XXX-XXX-XXXX Fax: 1-XXX-XXX-XXXX