The world has experienced an average of one pandemic every 40 years that makes it 17in the last 700. These 17 pandemics from the year 1347 unfortunately have caused about350 million deaths. By our nature humanity is wired to fighting these situations andsurviving and thriving through all of this.1
|Ajit Isaac |
|Executive Chairman |
Message from MD & CEO
This has been a roller-coaster year one in which our society went from a completelockdown to guard against COVID-19 to a period of pandemic-free boom to anotherlockdown. The year saw Quess' operating EBITDA drop by almost 25% in the first quarter andthen rapidly recover to unprecedented levels (if normalised for the sustained losses inour food and training businesses) by Q4.
We are proud of the journey our institution has made over the year. Even whileweathering the pandemic-induced storm we have emerged a more focused and efficientexecution machine with heightened energy and purpose. For this we must thank each of the~363000 Quessians who truly represent the best of our society.
Indeed over the last year Quess has been at the forefront of the war against COVID.Even while society was in lockdown we fumigated managed and secured hospitalsairports and countless other essential facilities on behalf of our clients. Even as manyIndians were ensconced in their homes our associates were out at the frontline inhealthcare ecommerce retail and manufacturing jobs to get our economy running again. Werepaired broken devices attended to customer phone calls processed payslips anddeployed digital assets to keep consumers serviced. Our employees participated in numerouscommunity welfare programs during this particularly tough time sponsoring anddistributing cooked meals dry ration and personal protection kits for front-line workersteachers and students in adopted schools. As an institution we did our bit too byextending healthcare helplines counselling support safety training facilitiesautomation digital employee engagement events and extra leave benefits where needed.With such inspiration and purpose it is no wonder that Quess once again emerged as aGreat Place to Work!
Last year we coined the mantra Winning Together' for Quess in line with ourpurpose of building a leading institution that drives productivity for our clients byoutsourcing and optimizing their key business processes and being the preferred firm foremployees customers and investors alike. FY21 has given us several opportunities toexecute on this mantra.
Let's speak first of our customers for whom we feel heartfelt gratitude. Thanks tothem we are today one of the world's leading business services providers and the largestemployer in the Indian private sector. The year saw us further strengthen our franchiseadding over 700 new customers while securing new cross-sell deals worth H 2500 million ofannual contract value from our existing customers.
Even while adding business volume we have continued our tradition of driving serviceinnovation. In our Workforce Management Platform our General Staffing business has madeinroads into outcome-based contracting entering the gig economy via our investment intoTaskmo. Our IT Staffing business has strengthened its presence in high end digital skills.Our Global Technology Solutions business is rapidly expanding its presence in platform andtransaction-led services which should further strengthen our value proposition andmargins over time. Our Operating Assets Management platform has made rapid strides intodigitising workflows (e.g. 70% of our facilities team has taken training via our WorQapp our Digital Supervisor module is already being used at 10% of our security servicescustomers) and deepened vertical expertise in sectors such as manufacturing andhealthcare.
We are very excited about the strides our Emerging Businesses have taken. Despite adifficult lockdown environment Monster is showing green shoots with customer acquisitionsat a 3-year high job postings up 240% YoY and job views up 55% YoY. Our Digicarebusiness hard-hit during lockdown bounced back to record its best H2 ever while driving50% of its activities onsite rather than in-store.
Beyond this we have made promising progress in incubating a set of digital "hireto retire" assets. These include:
QJobs the country's most productive blue collar auto-hiring platform launchedin November 2020. The app currently has over half a million downloads ~1100 third-partycustomers and 186000+ jobs.
WorQ India's largest workforce management tool with over 200000 MAU. WorQ isan HRIMS and productivity tool that helps employees improve their productivity throughdigital workflow management and training.
Dash a curated employee benefits platform with exclusive offers for Quessassociates through 100+ partnerships across financial well-being products accommodationsolutions and lifestyle products. The platform is seeing encouraging traction with~170000 visits in March alone.
Speaking next of our people. Our business is built on the foundation of very highalignment between shareholder and societal value. We have direct and positive impact onIndia's vast labour force last year we hired ~230000 FTE with our activitiesextending right from training and skilling to providing secure jobs to making talentready for employment to providing social security benefits. Around 30% of the people wehired entered formal and secure employment for the first time.
If Quess were a country there would be approximately 45 nations on earth with apopulation smaller than ours. We are determined to leverage this scale to continue ourinvestments into providing our associates and employees with superior benefits furtherextending our digital abilities to upskill and train and creating real career paths foraspiring India. The Dash platform is just one step in this direction.
Going forward we will further strengthen our core employee base including deepeningour vertical and domain expertise building technology-first DNA and aligning ouremployee interests better with that of our shareholders. In that regard we are gratefulto our shareholders for approving the QSOP 2020 scheme which has already been rolled outto 73 employees across the group and will be further broad-based going forward.
Pre-COVID we communicated to our investors that our North Star as an institution isachieving and sustaining an ROE of 20% whilst growing our OCF at an ongoing CAGR of 20%.The past year has seen us take several steps towards this objective.
We are encouraged that our extensive efficiency improvement efforts (including reducingreal estate footprint rationalising IT spend driving organizational efficiencies etc.)resulted in our monthly average SG&A costs reducing by over 24% year on year. Ourrapid growth in Q3 and Q4 gives us confidence that with our leaner and more focusedexecution engine we will see rapid expansion of ROE as COVID fades.
Our razor-sharp focus on cash generation (including DSO reduction tax refundcollection better LTDS compliance tighter cash management) delivered progress in theyear with OCF improving to H 5.87 billion from H 2.35 billion the year before. Thisallowed us to transform from a net debt of H 3.54 billion in Q4'20 to a net cash positionof H 986 million in Q4 '21.
Beyond financial returns our business model continues to create sustainable societalvalue by sourcing and employing the right talent for our customers. During the year wecontinue to remain India's largest private sector domestic employer with ~363000employees. We are making steady progress in moving workers to the formal sector providingthem social security benefits and a structured path to grow. In fact in FY21 we providedfirst-time social security benefits to 106000+ associates. Our contributions to ProvidentFund ESIC and taxes were ~26% of revenues or ~12x of our normalised PAT!
In closing we would like to extend our deepest gratitude to our distinctive managementteam and to every Quessian for their resilience and focus in this difficult year. And toyou the shareholder for your continued trust and support.
K. Suraj Moraje
Managing Director & Group CEO