Conduent(US:CNDT)2021-02-19 02:02Financial Data and Key Metrics Changes - In 2020, revenue was $4.16 billion, and adjusted EBITDA was $480 million, equating to a margin of 11.5% for the year [12][28] - Q4 revenue was just over $1 billion, with an adjusted EBITDA margin of 12.6% [12] - Excluding COVID impacts, revenue would have declined 4.1% in 2020, and Q4 revenue would have declined just 0.5% compared to 2019 [12][28] - Adjusted EBITDA for the full year was down 2.6% year-over-year, while the adjusted EBITDA margin increased by 40 basis points compared to 2019 [29] Business Line Data and Key Metrics Changes - Commercial revenue declined 9.3% for the year, primarily due to COVID impacts of approximately $158 million [30] - Government business grew by 1.4%, driven by approximately $149 million of revenue related to COVID volumes [31] - Transportation segment revenue declined by 7.9%, primarily driven by a $76 million negative impact from COVID-19 [32] Market Data and Key Metrics Changes - The global business services market has seen increased activity, with clients shifting work to global providers capable of secure remote delivery [13] - TCV signings for the year reached $1.9 billion, a 94% increase compared to 2019 [14] Company Strategy and Development Direction - The company aims to achieve growth, efficiency, and quality through improvements in people, processes, and technology [19][25] - 2021 priorities will focus on continuing the improvement journey established in 2020, with an emphasis on client value and operational efficiency [24][25] Management Comments on Operating Environment and Future Outlook - Management expects COVID to have an overall negative impact on the business in 2021, similar to 2020, but anticipates improvement as the year progresses [42] - The company is optimistic about the demand environment, with a stronger pipeline compared to the previous year [44] Other Important Information - The company ended the year with $458 million in cash and strong free cash flow performance [34] - Adjusted free cash flow was $145 million for the year, an $85 million increase over 2019 [36] Q&A Session Summary Question: Impact of Fed stimulus on 1Q and full-year outlook - Management expects a negative impact from COVID on the top line again this year, with Q1 revenue expected to decline by about 3% to 4% [42] Question: Update on demand environment and pipeline by business segment - The pipeline has increased by $2 billion to $3 billion compared to last year, with more outsourcing activity across segments, particularly in healthcare [44] Question: Clarification on one-time versus recurring trends in 2021 - Adjusting for COVID impacts, the Transportation segment would have shown growth, and some one-time items in Commercial should not repeat [48] Question: Timeline for organic constant currency positive growth - Management is confident that vectors for growth are aligned for 2022, but timing remains unpredictable due to various factors [52] Question: Factors affecting revenue growth guidance - High-end revenue growth could come from increased government volumes and faster ramping of new business signings [64]