Specialist
Former executive at Exela Technologies Inc
Agenda
- Exela Technologies’ (NASDAQ: XELA) operating environment, focusing on digital trends and dynamics
- Profitable revenue growth roadmap – BPM (business process management) solution suite expansion and on-site business recovery
- Enhanced capital structure benefits, including potential revenue and margin profile improvements
- Management reshuffling and medium-to-long-term outlook
Questions
1.
Could you begin with an overview of Exela Technologies’ operating environment? What 2-3 key trends or drivers should the equity and credit investor community be attuned to?
2.
What inning or stage is the digital transformation or adoption of BPM [business process management] or BPO [business process outsourcing] solutions in, as it relates to enterprises or Exela’s client base? Which industry verticals or solution capabilities within Exela’s suite of offerings are best positioned for more robust growth vs others?
3.
Which solution areas would you consider Exela Technologies to be best-of-breed in vs industry peers? Could you briefly comment on the competitive landscape? Who do you see as Exela’s main competitors and where do you see the most competitive threats arising over the next 12-18 months?
4.
In a recent Everest Group report assessing the intelligent automation healthcare solutions landscape – Exela was considered a leader alongside competitors such as Accenture and Cognizant. How does the company move up the value chain to higher-end services as opposed to areas where it specialises, such as data ingestion?
5.
Why do you think there is an opposition to partnering with a proven third-party solutions, whether across Tableau or another solution set, to augment Exela’s range of offerings vs trying to create them in-house?
6.
Exela reported 44% and 135% QoQ user growth in Q4 2021 for DMR [Digital Mailroom] and DrySign respectively, so there seems to be robust growth despite some of the challenges you alluded to. What’s your top-line growth estimate over the next 12-18 months for that suite of solutions?
7.
Are most of the solutions we’re discussing not sticky? Would a customer or client transition for a better price-point?
8.
Exela CEO Ron Cogburn discussed a recent launch of RPA [robotic process automation] software in the healthcare segment, branded as EON. What’s the appetite for higher-end services? Do you see this driving new logo growth and gaining traction with provider and payer clients? Does Exela have a strong historical background of executing and deploying on higher-end services?
9.
Exela alluded to a surprise in its SMB market growth. Do you think the company is too focused on Fortune 500 enterprises and competing with strong branded reputational competitors, as opposed to expanding its SMB footprint?
10.
What are the key dynamics in Exela’s on-site business? Do you view the on-site business as a competitive differentiator? Does the on-site business component drive growth within the SMB space?
11.
Exela’s ITPS [Information and Transaction Processing Solutions] saw a revenue contraction in 2021, while the healthcare segment was somewhat flat, expanding little in terms of revenue. Do you see a path towards profitability here, or further revenue contractions? Do you see the DAG [Digital Asset Group] expanding its revenue contribution from 8.3% in 2021, potentially into double-digit territory over the next 1-2 years, considering some of your earlier comments?
12.
What levers can Exela pull to optimise that internal cost structure? Which cost-synergy opportunities could help accelerate long-term profitability?
13.
Given Exela’s focus on improving its capital structure and overall liquidity over the past two years, has this translated into retaining and instilling confidence in its existing client-base or driving new log growth?
14.
You highlighted Exela should focus on the core areas where it excels and provides value to clients. Could the company sell off any areas of non-core assets, as it did with the tax benefits consulting group, the physical records store or the general logistics business in 2020?
15.
Exela’s Smart Office offering is very interesting, particularly considering the emphasis on hybrid working models, going forward. Did you feel there was a lot of client demand for those types of offerings? Are there any other leading-edge categories or solutions with an unpenetrated market that the company expand into?
16.
Now that Exela has shored up that capital and liquidity position and dealt with some lingering issues. What strategic partnerships or M&A across 2022-23 could address some of the issues you just raised, and provide a use-case to clients that leads to commercial viability?
17.
Is Exela’s healthcare solution suite a unified platform offering or just a bundling of disparate solutions? Can it integrate some of the more innovative standalone basis offerings you alluded to?
18.
Do you think Exela’s broad-based approach and work-from-anywhere strategy addresses labour pricing, considering that more than 50% of employees are now on that WFA [work-from-anywhere] platform? Do you think it will help the company maintain the approximate 23-25% gross profit margin posted for 2021?
19.
Do you think Exela has the right headcount? The company added 8,000 work-from-anywhere agents in 2021 and plans to accelerate that to 25,000 in 2022. What’s your take on the internal sales force structure? Do you think it is optimised in the right manner?
20.
Can you share your best- and worst-case outlook for Exela Technologies over the next 12-18 months?
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