SEPTEMBER 2019 INVESTOR PRESENTATION
SAFE HARBOR Certain statements made during the course of this presentation as it relates to SYKES’ business and financial performance are forward-looking. It is important to note that actual results may differ materially from those projected in any such forward-looking statements. Factors that could cause actual results to differ from those projected are identified in the company’s press releases and filings with the SEC from time to time. Non-GAAP Financial Measures Non-GAAP income from continuing operations, non-GAAP operating margins, non-GAAP tax rate, non-GAAP income from continuing operations, net of taxes, per diluted share and non-GAAP income from continuing operations by segment are important indicators of performance as these non-GAAP financial measures assist readers in further understanding the company’s results from operations and how management evaluates and measures such performance. These non-GAAP indicators of performance are not measures of financial performance under U.S. Generally Accepted Accounting Principles (“GAAP”) and should not be considered a substitute for measures determined in accordance with GAAP. Refer to the exhibits in the release for detailed reconciliations. 2
SYKES’ EVOLUTION ($MILLIONS) IPO: 1996 at $18, split adj:$8 1977 1996 • 1977: Founded by John Sykes as an engineering staffing firm 2000 • 1992: Acquire Sterling, Colorado -based Jones Tech to enter call center industry • Pioneer in leveraging rural delivery in the U.S. 2010 • Target Tech and Comm verticals to capitalize on PC and DSL penetration Key Industry Trends & Drivers • Industry leader in leveraging offshore delivery • Enhance fulfillment capabilities to capitalize on capabilities (particularly Philippines and LATAM as e-Commerce end-to-end solution opposed to just India) to diversify from Tech and Comm Data Table • Bolt -on and hybrid strategic acquisitions totaling 12 to • Leverage financial strength to drive acquisition of ICT verticals into Financial Services while lowering client drive global scale in EMEA and differentiation Group, vaults revenue base beyond $1 billion, adds concentration • Establish beachheads in healthcare and transportation Year Revenues new geos, strengthen existing verticals (FS and Telco) • Divest non -core assets (SHPS, fulfillment and verticals and broadens healthcare beachhead localization presence in U.S. 2000 – 2001) • Invest in new delivery geographies for the EMEA • John Sykes retires in 2004; Chuck Sykes named CEO 1996 $117 region (Romania and Egypt) • Further expansion of offshore delivery footprint in Latin Key Industry Trends & Drivers • Complete strategic review and exit non -strategic America and EMEA to capitalize on globalization trends 2000 $604 geographies (Spain, Ireland, South Africa, Netherlands • Continue accelerating growth through three bolt -on • Tech cycle (PCs and Peripherals) lift off and Argentina) impacted severely by the 2007 – 2008 • Dial -up and DSL penetration rates soar and strategic acquisitions (including KLA and Apex in global recession and changes in the political landscape 2010 $1,122 • Some demand volume overflow 2005 and 2006) • Impact from the recession manifesting in expiration of • Break into Wireless and Retail Banking market segments • First wave of customer care industry IPOs (SYKES, programs and dissolution of client relationships Teletech, Sitel, APAC, ICT Group, West, RMH, PRC, 2018 $1,626 • Strategic acquisition of best -of-breed and best-in-class Telespectrum) virtual agent customer care provider Alpine Access; • Telemarketing takes off Cost Reduction & Globalization Qelp acquisition and investment in AI through XSELL • Industry -wide rollup • Acquisition of digital marketing and demand generation • Dot.com bubble implosion and 911 • Three largest verticals: Communications, Financial • Cost reduction and pricing pressure player Clearlink & acquisition of RPA player Symphony Services and Technology • Introduction of Do Not Call List compounds price pressures • Excess capacity in the U.S. and EMEA Vendor Consolidation, New Delivery Models, Digital & Sales • Some industry consolidation • Telco (Broadband and Wireless) and Financial Services Rapid adoption of off-shoring to India and later Philippines (Credit Cards and Mortgages); impacts from regulation of financial institutions and LATAM drives further outsourcing • Exit from non -strategic geos • Global delivery model takes hold • Excess capacity being rationalized in the U.S. as demand backdrop remains choppy • Rise and fall of niche offshore delivery players • Vendor consolidation address demand destruction and performance consistency (PeopleSupport and eTelecare) • Product cycle disruption iPad/PCs • Strong overall economic growth 2003– 2008 • At -home platform gains traction • 2008 recession hits, demand subsides • Chat gains traction and social garners interest • Product cycle disruption and smartphone penetration led • Cyclical vs. secular growth debate continues by iPhone launch (2007) • Digital channels and customer journey • Digital marketing and demand generation converge with care supported by RPA, AI and Chatbots 3
SYKES PROFILE Multi-Channel Nov. 1, 2018: Acquired Symphony Demand Generation Global 2000 Founded: Public Listing: Locations: Ventures Ltd (RPA) & Global Customer Client Base 1977 (NASDAQ GS: 21 Countries; April 1, 2016: Engagement “SYKE”) 30+ Languages Services Acquired Clearlink provider (Digital Marketing) Brick & Mortar 2018 Healthy IPO: April 29, 1996; and 47,400 Seat 70+ Global Revenue: Balance Two 3-for-2 splits At Home Agent Capacity; Centers $1,626 Million Sheet (7-28-96 & 5-29-97) Delivery 2,500 At- Capabilities Home Agents 4
SYKES’ INVESTMENT CASE Healthy Balance Large Sheet to Further Addressable Enhance Market with Shareholder Secular Growth Value Backdrop Strong Operating Margin Profile with Opportunities for Further Expansion 5
AGENDA I. Overview II. Industry Snapshot III. Growth Strategy IV. Historical Financials V. Appendix 6
I. Overview 7
TECH + DATA TRENDS IMPACTING INDUSTRIES & COMPANIES GLOBALLY WITH IMPLICATIONS FOR CUSTOMER ENGAGEMENT STRATEGIES … Rapidly Changing Consumer Habits + Technology Adoption/Automation Cost Pressures & Lower Switching Costs Upendi ding ng Traditional itional Consu sumer er Journe ney Pace of Change Accelerating Customer Lifetime Value Transpar paren ency cy Channel Netwo work rk Ef Effec fects ts Speed d & Conveni nvenienc nce el Fragmen Glob Gl obal alizati ation on Shorter Product Cycles Secur curity ity Entry y Barriers rriers enta tatio tion Reputational Risk Macro-Economic Dislocation Demographic Shifts & Labor Dynamics 8
LEADING TO A GRADUALLY SHIFTING SERVICE PARADIGM CONVERGENCE Digital Customer Technology Journey • Speed • • Awareness Proactive • • Interest Real-Time • • Consideration Data • • Intent Personalized • • Evaluation Experience • • Purchase Measurement • Loyalty CONVERGENCE 9
DIFFERENTIATED FULL LIFE-CYCLE SERVICE OFFERINGS ADDRESS THE PARADIGM SHIFT Customer Engagement Services Digital Marketing Digital Transformation • Multi-Lingual & Multi-Channel Customer Self Service/Care Content Optimization • • Branded Marketing (Paid Search) Service, Retention & Loyalty • Curated Data Labeling of Consumer- • Category Search Consumer Marketing • Tech Support Level 1, 2 & 3 Agent Interactions (Organic Search) Network Provisioning • • Feeding Curated Data into Machine Lead Generation & Customer Intent • • Channel Sales & Support Learning Models Identification • Early stage collections CoBot Recommendation Engines for • • Content Creation Policy Administration & Claims • Chat & Voice Sales • Optimized & Geo-Targeted Websites & Management Intelligent Service Assistants • Comparison Engines • Vision Workshops Pay for Performance Model • • Future of Work Accelerator (FOWA) 10
CORE DELIVERY STRATEGY TO CAPITALIZE ON THE ADDRESSABLE MARKET Canada Global Footprint Addresses Approximately Philippines Mexico U.S. 80% of Global Customer Engagement Mexico Costa Rica Market & Demand Generation Philippines India Brazil Costa Rica Extends Presence Across El Salvador 40 of the 50 U.S. States Colombia and Canada Scotland Australia Egypt Philippines Philippines China Hungary Delivery Location Germany Cyprus Hungary Romania Customer Location Finland Sweden • 14 Markets Denmark Norway • 21 Delivery Geographies • 15+ Years Experience in Nearshore and Offshore Models 11
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