TTEC Holdings, Inc. reports 53.8% Net Income growth in 2020 and 18.6% Revenue growth
03/01/2021 • About TTEC Holdings, Inc. (
$TTEC) • By InTwits
TTEC Holdings, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TTEC Holdings, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $15m in FY2020, $47m in FY2019, $45m in FY2018, $70m in FY2017, $187m in FY2016
- The company has highly profitable business model: ROIC is 21.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
TTEC Holdings, Inc.'s Revenue surged on 18.6%. Revenue growth showed acceleration in 20Q4 - it increased 23.8% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 19.5% to 18.5% in FY2020. EBITDA Margin followed a growing trend at 1.9 pp per annum in the last 5 years.
Gross Margin increased slightly on 1.1 pp from 24.4% to 25.5% in 2020. During the last 5 years Gross Margin bottomed in 2018 at 23.3% and was growing since that time. SG&A as a % of Revenue decreased slightly on 1.9 pp from 12.3% to 10.5% in 2020. SG&A as a % of Revenue stuck to a declining trend at -0.67 pp per annum in the last 5 years.
Net Income margin increased slightly on 1.4 pp from 4.7% to 6.1% in 2020. During 2016-2020 Net Income margin bottomed in 2017 at 0.49% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 3.1%. CAPEX/Revenue showed almost no change from 2017 to 2020. It's average level of CAPEX/Revenue for the last three years was 3.2%.
Return on investment
The company operates at high and attractive ROIC (21.1%) and ROE (27.5%). ROIC increased on 4.3 pp from 16.8% to 21.1% in 2020. ROE increased on 7.3 pp from 20.2% to 27.5% in 2020. ROIC grew at 2.3 pp per annum in 2016-2020. ROE grew at 5.6 pp per annum in 2016-2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 1.6x. Net Debt / EBITDA dropped on 0.4x from 1.6x to 1.2x in 2020. Debt jumped on 12.3% while cash surged on 61.3%.
TTEC Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (266.7%).
Valuation and dividends
The company's trades at EV/EBITDA 12.7x and P/E 32.6x.
Management team
Kenneth D Tuchman "Ken" is a the company's CEO. Kenneth D Tuchman "Ken" has spent 21 years with the company. The company's CFO is Regina M Paolillo. Regina M Paolillo has 9 years tenure at the company.
Financial and operational results
FY ended 12/31/2020
TTEC Holdings, Inc. ($TTEC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,275 | 1,477 | 1,509 | 1,644 | 1,949 | 18.6% |
| Gross Profit | 334 | 367 | 351 | 401 | 497 | 23.9% |
| SG&A | 176 | 182 | 182 | 203 | 204 | 0.7% |
| EBITDA | 121 | 165 | 161 | 243 | 337 | 38.4% |
| Net Income | 34 | 7 | 36 | 77 | 119 | 53.8% |
Balance Sheet
|
|---|
| Cash | 55 | 74 | 78 | 82 | 133 | 61.3% |
| Short Term Debt | 0 | 0 | 0 | 53 | 50 | -5.4% |
| Long Term Debt | 217 | 344 | 282 | 426 | 488 | 14.5% |
Cash flow
|
|---|
| Capex | 51 | 52 | 43 | 61 | 60 | -1.7% |
Ratios
|
|---|
| Revenue growth | -0.9% | 15.8% | 2.2% | 8.9% | 18.6% | |
| EBITDA growth | -21.6% | 35.9% | -2.3% | 50.9% | 38.4% | |
|
|---|
| Gross Margin | 26.2% | 24.9% | 23.3% | 24.4% | 25.5% | 1.1% |
| EBITDA Margin | 9.5% | 11.2% | 10.7% | 14.8% | 17.3% | 2.5% |
| SG&A, % of revenue | 13.8% | 12.3% | 12.1% | 12.3% | 10.5% | -1.9% |
| Net Income Margin | 2.6% | 0.5% | 2.4% | 4.7% | 6.1% | 1.4% |
| CAPEX, % of revenue | 4.0% | 3.5% | 2.9% | 3.7% | 3.1% | -0.6% |
|
|---|
| ROIC | 10.1% | 16.1% | 13.5% | 16.8% | 21.1% | 4.3% |
| ROE | 8.5% | 2.0% | 10.2% | 20.2% | 27.5% | 7.3% |
| Net Debt/EBITDA | 1.3x | 1.6x | 1.3x | 1.6x | 1.2x | -0.4x |
TTEC Holdings, Inc. ($TTEC) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 432 | 453 | 493 | 571 | | 9.6% | 15.4% | 24.6% | 23.8% |
| EBITDA | 72 | 80 | 86 | 99 | | 18.3% | 48.1% | 58.7% | 32.4% |
| Net Income | 22 | 31 | 21 | 44 | | 13.3% | 165.5% | 18.0% | 57.2% |
Balance Sheet
|
|---|
| Cash | 520 | 482 | 135 | 133 | | 484.4% | 538.6% | 58.3% | 61.3% |
| Short Term Debt | 52 | 52 | 51 | 50 | | 15.5% | 11.9% | 3.1% | -5.4% |
| Long Term Debt | 828 | 823 | 438 | 488 | | 125.6% | 130.4% | 30.5% | 14.5% |
Ratios
|
|---|
| Gross Margin | 25.6% | 25.6% | 25.3% | 25.5% | | -0.0% | 1.8% | 2.3% | 0.4% |
| EBITDA Margin | 16.6% | 17.6% | 17.4% | 17.4% | | 1.2% | 3.9% | 3.7% | 1.1% |
| Net Income Margin | 5.0% | 6.9% | 4.3% | 7.8% | | 0.2% | 3.9% | -0.2% | 1.7% |
Peers in Data Processing & Outsourced Services
Below you can find TTEC Holdings, Inc. benchmarking vs. other companies in Data Processing & Outsourced Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Square, Inc. ($SQ) | - | 29.6% | 49.0% | 42.9% | 101.5% |
| Global Payments Inc. ($GPN) | - | 37.2% | -15.3% | 45.9% | 51.1% |
| Fiserv, Inc. ($FISV) | - | 3.5% | 2.2% | 74.9% | 45.8% |
| NIC Inc. ($EGOV) | - | 5.8% | 2.5% | 2.7% | 30.0% |
| StoneCo Ltd ($STNE) | - | 74.3% | 106.0% | 63.1% | 28.9% |
| |
|---|
| Median (39 companies) | 6.7% | 10.1% | 7.5% | 11.5% | -3.3% |
|---|
| TTEC Holdings, Inc. ($TTEC) | - | 15.8% | 2.2% | 8.9% | 18.6% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Verra Mobility Corp ($VRRM) | - | 97.4% | 97.5% | 95.7% | 91.5% |
| EVO Payments, Inc. ($EVOP) | - | - | - | 80.2% | 80.8% |
| StoneCo Ltd ($STNE) | 69.7% | 70.8% | 79.5% | 83.4% | 76.8% |
| WEX Inc. ($WEX) | 54.7% | 58.8% | 63.3% | 61.7% | 56.8% |
| Sabre Corporation ($SABR) | 32.2% | 30.1% | 27.8% | 56.6% | 56.6% |
| |
|---|
| Median (31 companies) | 39.5% | 39.5% | 41.0% | 41.7% | 36.7% |
|---|
| TTEC Holdings, Inc. ($TTEC) | 26.2% | 24.9% | 23.3% | 24.4% | 25.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Visa Inc. ($V) | 55.6% | 69.2% | 65.8% | 68.1% | 68.5% |
| Mastercard Incorporated ($MA) | 56.9% | 56.5% | 51.8% | 60.9% | 56.6% |
| FleetCor Technologies, Inc. ($FLT) | 52.0% | 50.8% | 55.9% | 57.6% | 52.2% |
| StoneCo Ltd ($STNE) | 31.4% | 26.0% | 53.0% | 62.4% | 52.1% |
| Black Knight, Inc. ($BKI) | 43.0% | 44.6% | 43.3% | 46.0% | 44.9% |
| |
|---|
| Median (38 companies) | 21.3% | 21.1% | 19.4% | 22.2% | 19.1% |
|---|
| TTEC Holdings, Inc. ($TTEC) | 9.5% | 11.2% | 10.7% | 14.8% | 17.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| PagSeguro Digital Ltd. ($PAGS) | 6.4% | 4.3% | 1.4% | 5.8% | 22.3% |
| StoneCo Ltd ($STNE) | 7.2% | 18.4% | 8.9% | 12.9% | 11.2% |
| Cardtronics plc ($CATM) | 9.9% | 9.6% | 8.0% | 9.3% | 8.3% |
| Verra Mobility Corp ($VRRM) | - | 11.5% | 7.2% | 6.6% | 6.2% |
| Fiserv, Inc. ($FISV) | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% |
| |
|---|
| Median (38 companies) | 3.2% | 2.9% | 3.2% | 3.0% | 3.0% |
|---|
| TTEC Holdings, Inc. ($TTEC) | 4.0% | 3.5% | 2.9% | 3.7% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mastercard Incorporated ($MA) | 57.5% | 60.6% | 64.7% | 72.7% | 47.6% |
| International Money Express, Inc. ($IMXI) | -1.3% | -1.4% | 12.1% | 36.0% | 31.4% |
| NIC Inc. ($EGOV) | 63.1% | 52.1% | 39.3% | 26.5% | 30.8% |
| Visa Inc. ($V) | 18.1% | 21.9% | 23.0% | 27.2% | 23.2% |
| Western Union Company (The) ($WU) | 10.7% | 11.9% | 27.8% | 21.5% | 22.1% |
| |
|---|
| Median (39 companies) | 11.7% | 10.6% | 10.2% | 8.2% | 5.5% |
|---|
| TTEC Holdings, Inc. ($TTEC) | 10.1% | 16.1% | 13.5% | 16.8% | 21.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| WEX Inc. ($WEX) | 6.7x | 4.4x | 3.1x | 3.4x | 12.1x |
| Exela Technologies Inc ($XELAU) | 8.1x | - | 9.7x | - | 10.7x |
| Alliance Data Systems Corporation ($ADS) | 10.7x | 10.1x | 9.0x | 11.7x | 9.2x |
| Verra Mobility Corp ($VRRM) | - | 10.7x | 6.9x | 3.5x | 4.7x |
| GreenSky, Inc. ($GSKY) | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x |
| |
|---|
| Median (35 companies) | 1.6x | 2.3x | 2.2x | 2.3x | 2.1x |
|---|
| TTEC Holdings, Inc. ($TTEC) | 1.3x | 1.6x | 1.3x | 1.6x | 1.2x |
